Acorns vs. Stash: Which Microsavings Tool is Right for You?

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By now, everyone knows they should be saving more money, but between housing, healthcare costs and every other demand fighting for our dollar, being disciplined enough to actually put money away can be a challenge. That’s where microsavings accounts come in. These tools make saving money so easy that anyone can do it. You don’t need a ton of money or a lot of discipline. You just save small amounts on a consistent basis and watch your balance grow steadily over time. Acorns and Stash are two microsavings tools allow beginning investors to start small. Here is a breakdown of each service and how they stack up against each other.

  • Review of: Acorns vs. Stash
  • Reviewed by: Janet Berry-Johnson, CPA (Forbes.com Contributor)
  • Published on: January 13th, 2017
  • Last modified: January 13th, 2017

Acorns vs. Stash overview

Acorns “rounds up” your spending to the nearest dollar and invests that difference. You just link a credit or debit card, then Acorns does the rest. It makes saving painless because you invest just pennies at a time.

Stash is a microsavings tool that lets you start investing with as little as $5. You can open an account with a $5 minimum initial deposit, and set up monthly transfers from a linked bank account.

Fees

The most important question for any investment tool is what it will cost. Both Acorns and Stash charge $1 per month for beginner accounts. For accounts of $5,000 or more, investors using either tool pay 0.25% of your account balance per year.

Acorns offers a special deal for college students looking to get into investing. College students with a valid .edu address can use Acorns for free for up to four years from the date of registration.

Investment options

Part of the Acorns enrollment process includes answering questions about your net worth, annual income, and reasons for investing. They offer five different reasons for investing: long term, short term, major purchase, children, or general. These questions help Acorns create a recommended portfolio, either conservative, moderately conservative, moderate, moderately aggressive, or aggressive. You do not have to stick with the recommended portfolio. If you don’t like Acorns’ recommendation, just choose another portfolio that is a better fit. Within your investment portfolio, Acorns gives six options for basic index funds offered through BlackRock and Vanguard:

  • Large company stocks – Vanguard 500 Index Fund ETF (VOO)
  • Small company stocks – Vanguard Small-Cap Index Fund ETF (VB)
  • Emerging markets – Vanguard Emerging Markets Stock Index Fund ETF (VWO)
  • Real estate – Vanguard REIT Index Fund ETF (VNQ)
  • Corporate bonds – iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
  • Government bonds – iShares 1-3 Year Treasury Bond ETF (SHY)

The Stash enrollment process also includes a questionnaire to determine your investment risk level, which can be conservative, moderate, or aggressive. From there, Stash offers a lot more investment options than the competition. You are able to choose from about 30 individual investments that they selected from among thousands of ETFs and even some individual stock recommendations.

The bottom line

While Stash offers more investment choices and flexibility than Acorns, the appeal of microsavings lies in its simplicity. With Acorns, a beginning investor can dip a toe into micro-investing by setting up an account and literally forgetting about it. So while both tools are perfect for newbie investors, Acorns has a slight edge when it comes to ease of use

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