A pair of micro-investment applications have hit the investment universe in the past couple of years. Acorns and Stash Invest are smartphone-based investment apps that enable you to save and invest very small amounts of money. They then offer professional investment management to help you invest and grow your portfolio.
Acorns bills itself as the first mobile investment application that lets you open an account on your smartphone. Acorns will literally allow you to invest your “spare change.” You do this by connecting your mobile phone to your bank accounts and credit cards, and the application will automatically invest your change. There is no limit to the number of accounts and credit cards you can link.
That change is small amounts of money, often less than a dollar, that are adding to your Acorns investment account each time you make a purchase. For example, let’s say you purchase a latte at Starbucks for $4.25. The purchase will be rounded up to $5, and 75¢ of that will automatically go into your investment account. In that way, small amounts will be invested for each purchase, enabling you to save money without even noticing it’s happening.
Acorns refer to this as Round-Ups, because the amount of your purchases is rounded up to the next increment. You can round up to the nearest dollar or choose a higher amount so your investment growth will happen even faster. You can also set scheduled investment deposits, occur daily, weekly or monthly.
About Stash Invest
Stash Invest is an automated investment app. You can invest with as little as $5, which makes it a micro-savings application. Unlike Acorns, which actually does the investing for you, Stash Invest simply makes investment recommendations, leaving it up to you to do the actual investing.
Your investment portfolio can be a combination of investment themes, which are comprised of exchange traded funds (ETFs) set in an asset allocation that is consistent with the chosen theme. They give those themes creative names such as “Defending America” and “Delicious Dividends.”
Stash Invest is available for iOS and Android and can be downloaded in minutes. You will link the app to your bank account, enabling you to move money back and forth between the app and the bank account. You can link only a single bank account to the app. You can now also access Stash on the web using your desktop or laptop computer.
Jump down to the respective section to get the information you need.
- Both Acorns and Stash Offer
- Features Unique to Acorns
- Features Unique to Stash
- Feature Comparison
- Annual Fees
- Minimum Deposit
- Which Is Better?
Features Both Acorns and Stash Offer
Both applications enable you to invest very small amounts of money. In doing so, you can accumulate an investment portfolio without even knowing you’re doing it. Both also enable you to invest additional amounts, so you can fast-forward your investment progress.
Both are also available as mobile apps, which means you can invest on the go. Both offer investment management, though Stash Invest is more democratic in this regard. And of course, they have identical fee structures.
Features Unique to Acorns
- Web Access — With Acorns you can not only access via an app on your mobile device, but via their website as well.
- No Minimum Deposit — You can open an account with Acorns with no money.
- Found Money — Save money on items you purchase. Acorns is currently beta testing partnering with certain brands, including 1-800 Flowers and Dollar Shave Club, with more on the way, in which the merchants will also invest in your Acorns account.
Features Unique to Stash
- More Flexibility Investing — In addition to accepting investment recommendations from Stash Invest, you can supplement your portfolio with your own investment choices. This will provide you with more investment options.
- Auto-Stash – Put your investments on auto-pilot and automatically invest in the things you like every week or month.
- Stash Learn – Through the app and the website, Stash provides financial education to help teach new investors the basics so they can do it themselves.
|Investor Junkie Rating|
|Promotions||None||Get $5 When Joining|
|Minimum Deposit||$0; $5 to start investing||$5|
|Account Fees||$1-2/month under $1 million; 0.25%/year over $1 million; FREE for under 24 and in college||First month FREE; $1/month under $5k; 0.25%/year over $5k|
|Mobile App||Apple iOS and Google Android||Apple iOS and Google Android|
|Web Site Access||Yes||Yes|
When you open up your Acorns account, you will be asked to provide personal financial information. This information will be used as the basis to create a recommended portfolio for you.
The platform allows you to choose different investing goals, including long-term investments, short-term investments, a major purchase, children or general. Based on those goals and your financial information, your portfolio will be constructed around your risk tolerance, as follows:
- Moderate Conservative
- Moderately Aggressive
You can then choose the asset class you want to invest in, which will be represented by a corresponding exchange traded fund. Your Acorns portfolio is constructed from just six ETFs that represent most of the global investment universe.
This is what is known as modern portfolio theory, or MPT. This theory holds that asset allocation is more important to investment success than individual security selection. Since your portfolio will include the six most important asset classes, the related ETF, being based on an asset class index, represents a broad diversification into stocks and securities in each class.
ETFs available through Acorns include:
- Large Company Stocks — Vanguard S&P 500 ETF (VOO)
- Small Company Stocks — Vanguard Small-Cap ETF (VB)
- Emerging Markets — Vanguard FTSE Emerging Markets ETF (VWO)
- Real Estate — Vanguard REIT ETF (VNQ)
- Corporate Bonds — iShares iBoxx$ Investment Grade Corporate Bond ETF (LQD)
- Government Bonds — iShares 1-3 Year Treasury Bond ETF (SHY)
As with Acorns, you complete a risk tolerance questionnaire for Stash Invest. From there, they give you a list of investment options to choose from. The advantage here is you also have the option to add investments of your own choice to the mix. This is a departure from most robo-advisors, including Acorns.
Your risk tolerance is determined based on your age, your investment goals and your time horizon. You will be evaluated as conservative, moderate or aggressive, and investment recommendations will be consistent with that risk tolerance level. You will be given a choice of 30+ investment themes that match your risk level.
Where Acorns limits investments to just six ETFs, Stash Invest takes advantage of over 30 ETFs. Stash Invest has much more flexibility. Te app also lets you invest in more than 70 single stocks, as well.
Acorns charges $1 per month for accounts under $1 million and 0.25% for account balances over $1 million. However, if you are under age 24 or attending college, the service is free to use. There are no commissions when you purchase shares in ETFs. If you wish to partake in Acorns’ new retirement savings program, Acorns Later, you will be charged another $1 per month until you have invested $1 million through the app.
Stash Invest is currently offering the service free for the first month. After that, the fee is $1 per month for account balances under $5,000. Balances of $5,000 or more are subject to a annual fee of 0.25% of your balance.Acorns is a better deal when it comes to accounts with less than $1 million.
Both apps are available for iOS and Android smartphones, so you can access your account wherever you have connectivity. Both apps began as mobile-only products. However, they both now offer web access. This means you also have the full functionality of the apps on your desktop or laptop computer.
Acorns does not have a minimum deposit. You can open an account today, link up your credit card and start immediately.
Stash Invest, on the other hand, has a $5 minimum deposit.
Granted, $5 is not much, but of course Acorns has a slight edge with their minimum deposit.
Which Is Better?
It is a close race between the two, but Acorns has a slight edge.
While Stash Invest has some neat features individuals might prefer, we recommend Acorns for its simplicity and ease of use for beginning investors.
If you are somewhat more down the path of investing and want more flexibility, then choose Stash Invest.
But you won’t go wrong with either service if you are just starting to invest and want to get on the path of saving for future goals.
Our best guess is that if you are a new investor, it wouldn’t be a mistake to go with either of these apps. Though there are robo-advisors with cheaper annual fees available.