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Stash vs Acorns Apps: The Pros and Cons

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Key Highlights

  • Acorns and Stash are micro-investing apps that allow users to invest small amounts of money.
  • Acorns is known for its “round-up” feature, which invests the spare change from your purchases.
  • Stash lets you choose individual stocks and ETFs, while Acorns offers curated portfolios.
  • Both apps offer retirement accounts (including IRAs) and checking accounts, simplifying personal finance management.
  • Stash’s banking features are more extensive, while Acorns’ strength lies in automated micro-investing.
  • Choosing between Acorns and Stash depends on individual investing goals and preferred level of control over investments.

Introduction

In today’s world, micro-investing apps have changed how we manage our money. They make it simple to start creating a smart portfolio. Two well-known apps used for this are Stash and Acorns. Both of these want to help you invest easily and in a fun way. But which one is better? This blog post will look closely at Stash vs. Acorns. It will cover their main features, advantages, disadvantages, and help you find the right app for your financial goals.

Overview of Micro-Investing Apps

Traditional investing used to seem hard for many people. It needed a lot of money and a good understanding of the stock market. But now, micro-investing apps have changed this. These apps give people access to investment products. They let users invest small amounts of money often. Many times, this is by rounding up everyday purchases and using the spare change.

This way makes investing easier, especially for beginners. You do not need a big amount of money to start. Micro-investing lets people begin with what they can afford. This helps them build a habit of saving and investing, leading to good financial growth in the long run.

Rise of Micro-Investing in the United States

The rise of micro-investing in the United States is happening for a few reasons. First, the chance to buy fractional shares makes it easier to invest. This means people can own parts of expensive stock even if they do not have a lot of money.

Second, using round ups with everyday spending makes investing simple and easy to fit into daily life. This method lets people invest without even thinking about it, which is great for those who find it hard to invest regularly.

Lastly, the ease of using mobile apps to manage both investments and bank accounts attracts a younger generation. These apps are designed for digital use, which is what many people expect today.

Importance of Choosing the Right Platform

The idea of micro-investing makes it easy to start investing. However, picking the right platform is very important. This choice can help you get the most returns and reach your personal finance goals. Not all micro-investing apps are the same. It’s important to know the details of each one.

Key things to think about are fees, what you can invest in, and how the platform handles investing overall. You should look at your financial goals, how much risk you can handle, and how much you want to manage your investments. This can help you find the best option for you.

Choosing wisely will help ensure the platform fits your financial needs. It will also support your journey toward long-term financial well-being.

Key Features Comparison

Both Stash and Acorns aim to give users a simple experience and have many features that go beyond just investing. They both allow you to access retirement accounts, checking accounts, and helpful learning tools.

Still, some important differences in what they offer may make one service better for you than the other. Let’s look at these differences by comparing their main features and functions.

Investment Options Available

Stash and Acorns have different ways to invest. Stash lets users choose their own individual stocks and ETFs. Users can also go for their Smart Portfolios that are prepared by Stash. This choice is good for both hands-on and hands-off investors.

On the other hand, Acorns uses a robo-advisor system. Here, users answer some questions to find out their risk level and financial goals. After this, Acorns sets up and handles a mixed portfolio of ETFs for them.

Here is a summary:

  • Stash: Individual stocks, ETFs, Smart Portfolios.
  • Acorns: Pre-selected ETF portfolios based on risk tolerance.

Stash gives more control and options, while Acorns makes investing easier and more automatic.

Ease of Use and Interface Design

Both platforms have simple and easy-to-use designs. They both offer user-friendly mobile apps. This makes it easy to use the app, manage investments, and check performance, even for beginners. Stash and Acorns focus on creating a smooth mobile experience, which is important for attracting and keeping today’s mobile users.

Still, user reviews show that people prefer the Acorns app a bit more for its user experience. Many say Acorns has a simple design and is easy to use, especially for setting up features like Round-Ups.

In general, both platforms are great at providing easy-to-use experiences. This helps them become popular with younger people and new investors.



Analyzing Stash: Pros and Cons

Stash, which works under Stash Investments LLC, has found its place in micro-investing. It offers more investment choices than many of its rivals.

Still, it is important to think about its benefits and drawbacks. You should see if it fits well with your investment style and financial goals.

Unique Selling Points of Stash

Stash stands out because it offers flexible investment options. One key feature is buying fractional shares and individual stocks. This lets users invest small amounts in companies that usually have high share prices. This choice opens up more investment possibilities.

Another benefit is Stash’s commitment to financial education. Their platform, Stash Learn, gives users helpful articles, tips, and resources. This helps them learn about investing and make smarter personal finance choices.

Stash also has a Stock-Back debit card. This card rewards users with fractional shares of stock on some purchases. This makes investing more fun and keeps users engaged with the platform.

Where Stash Falls Short

Stash has some good features, but it also has some drawbacks. One issue is its monthly subscription fee. The fee is $3 or $9, based on the plan you choose. While this is not high, it may discourage new users or those who trade rarely. These fees could reduce returns, especially for people with small account balances.

Also, Stash has retirement accounts, but it doesn’t offer a SEP IRA. This type of account is for self-employed persons and small business owners. The investment advice Stash gives is useful for beginners, but it might not be enough for experienced investors who want more personal help. If you want complete financial planning, you may need to find other resources.

Analyzing Acorns: Pros and Cons

Acorns is a well-known name in micro-investing. It has become popular for making it easy for people to grow their money. The “round-up” feature is very popular and is often linked to micro-investing.

However, like any platform, it has its pros and cons. Let’s take a closer look at these to find out if Acorns is right for you.

Highlights of Acorns’ Offerings

Acorns stands out because it is simple to use and automates investing. Its “round-up” feature takes the extra change from your purchases and invests it. This makes it easy for people to invest regularly without much effort. This way of investing is great for beginners or anyone who wants a low-maintenance option.

Acorns has various investment choices with its ETF portfolios. Users don’t pick individual stocks, but they can choose a portfolio that fits their risk level and financial goals. Acorns takes care of rebalancing the portfolios, keeping them in line with the user’s investment plan.

They also have a metal debit card and a program called “Found Money”. This program gives cash back rewards from partner retailers, making it even more attractive to use Acorns for managing money.

Limitations of Acorns

One of the main downsides of Acorns is that users have little control over their investment choices. Acorns takes care of managing the portfolios, but users cannot choose individual stocks or change their investment plans much. They can only select a pre-set risk level. This limited control could turn away active investors who want to pick their own investments.

Acorns is strong because it offers a simple experience, but this may not give all users the investment features and learning resources they want. Also, Acorns does not allow day trading or other advanced trading methods. It mostly suits long-term investors.

The fee structure of Acorns is competitive, but it may be a drawback for users with larger balances. Acorns charges a flat monthly fee instead of a percentage of the assets managed.

Fees Structure and Costs

Understanding the fees for Stash and Acorns is important. It helps you see how much they will cost you over time and how this affects your returns. Knowing the fees clearly can show you which platform gives you more value, especially if you are investing small amounts.

This part will compare their prices and how they might change your investment growth.

Comparison of Fee Strategies

Stash and Acorns adopt a flat monthly subscription fee model, eliminating commissions on trades. However, the specific fee varies depending on the chosen plan and its included features.

Feature

Stash

Acorns

Monthly Fee (Basic)

$3

$3

Monthly Fee (Premium)

$9

$5 (Family)

Investment Options

Individual stocks, ETFs

ETFs only

Checking Account

Available

Available

Retirement Accounts

Available

Available

As evident, Stash’s premium tier offers more features for a lower cost than Acorns’ equivalent Family plan, which includes custodial accounts. However, Acorns’ focus on simplicity might suit users seeking a streamlined experience.

Understanding the Impact on Investments

While the monthly fees of both platforms seem low, they can greatly impact users with small account balances. It’s important to see how these fees affect your investment percentage, as high fees can take away a large part of your returns over time.

Also, think about possible hidden fees linked to certain financial products or services on each platform. These might be inactivity fees, transfer fees, or extra charges for special features.

Keep in mind that it’s very important to understand the fee structure when picking a micro-investing platform. Look closely at the terms and conditions to make sure the costs fit with your investment goals and how much risk you can handle.

Conclusion

In conclusion, both Stash and Acorns have special features for different types of investors. Stash is great for its educational tools and custom portfolios. Acorns does well with its automatic round-up investments. Deciding between them depends on your goals and how you feel about fees. Make sure to look at the good and bad points before you pick. Happy investing!

Frequently Asked Questions

Which app is better for beginners, Stash or Acorns?

Acorns is simple to use and has automated features. This makes it a better fit for most beginners. If you want to learn more about investing and pick individual stocks, Stash offers more guidance and investment advice.

Can you make significant earnings with micro-investing apps?

Micro-investing might not make you rich fast, but it helps you grow your investment account slowly. When you regularly put in small amounts of money, you use compounding to your advantage. This could help you reach your financial goals over time.

How do Stash and Acorns handle security and data privacy?

Both Stash and Acorns focus on safety and protecting your data. They use bank-level encryption and make secure transactions. Their checking accounts are FDIC insured. This keeps your financial details and money safe.


Reviewed and edited by Albert Fang.

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Article Title: Stash vs Acorns Apps: The Pros and Cons

https://fangwallet.com/2024/10/16/stash-vs-acorns-apps/


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