Robinhood vs Acorns? The market has suddenly become crowded with the introduction of online trading brokerages. In the past, all we had were trading brokerages attached to big banks, but today, there is a long list of discount brokerage sites offering the same services. Many of these platforms are completely digital, removing the need for brick-and-mortar locations. Lower business costs for the company usually mean lower fees for users. These digital platforms have appealed to the younger generation of investors, who are generally tech-savvy and have less of an allegiance to big banks.
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In this article, we look at two online finance tools with two different approaches to investing.
Robinhood vs Acorns has the same goal: to help simplify investing, especially for new investors.
While the two sites are not direct competitors, a review can compare two investing styles. In this case, you don’t have to pick the better choice, but you can find an investing strategy that works for you.
I’ll look at both sites and compare fees, investment options, account types, and more. First, let’s look closely at Robinhood and Acorns and determine which site is better for you!
What Is Robinhood?
Robinhood vs Acorns? Robinhood is an online-based trading and investment platform that was established in 2013.
The company was founded in the heart of Silicon Valley in Menlo Park, California, by Vladamir Tenev and Baiju Bhatt.
You’ve likely heard of Tenev before as a key figure in the Reddit short squeeze event featuring GameStop (NYSE: GME) and AMC (NYSE: AMC). Indeed, Robinhood has a controversial history and a checkered past with retail investors.
Robinhood’s trading brokerage revolves around a mobile and desktop app. It made zero-commission trading the norm, which appealed to millennials. But Robinhood also operates under the Payment for Order Flow system.
This means the trades its users make are sent to institutions that pay for this data and receive it seconds before the trade is executed.
Robinhood went public on the NASDAQ exchange in July of 2021 under the ticker symbol NASDAQ: HOOD. Since its IPO, the stock has lost more than 70% of its value during the recent market correction.
What Is Acorns?
Acorns is an American fintech company launched in 2012 that provides incremental and passive investing strategies.
Walter Crittenden III and Jeffrey James Cruttenden, a father and son duo founded the company.
While Robinhood is a trading brokerage, Acorns is a robo-investor. This means that Acorns will do most of the passive investing for the user after adding money to the account.
Acorns is a private company as of 2022. It had plans to go public via a SPAC merger, but the ongoing market weakness caused Acorns to reconsider. The company has over 9 million active users and over $3 billion in total assets under management. In addition, Acorns has some serious investors with skin in the game. This list includes Blackrock, PayPal, Rakuten, and celebrities like Dwayne Johnson, Kevin Durant, and Ashton Kutcher. So, Robinhood vs Acorns?
Robinhood vs Acorns Fees
Robinhood is one of the more reasonably priced trading platforms on the internet. However, comparing prices between the two apps is difficult since they have different investing styles.
Robinhood has zero-commission trading, meaning transaction fees are a thing of the past. However, Robinhood Gold has a monthly premium subscription cost of about $5.00.
The Gold membership allows users to access margin trading, Level II market data from NASDAQ, and bigger deposits. Robinhood only has an account transfer fee of $75.00 if you choose to leave the platform. Let’s look at Acorns’ fees in the Robinhood vs Acorns debate.
Since Acorns does a lot of the heavy lifting for you, it is understandable why it has higher user fees. Acorns charges account management fees of $3.00 per month for individuals and $5.00 for families.
Other than that, Acorns’ only other fee is the transfer fee, which is $50.00. There is no charge to close your account and liquidate it. So, for passive investors, Acorns provides a lot of bang for your buck.
COURSE |  |  |  |
|---|---|---|---|
| DESCRIPTION | Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action | Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading | How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading |
| INCLUDED | Daily watch lists • Trade rooms • Trading scanners • Discord • Live streaming Day Trading > | Daily watch lists • Trade rooms • Options scanners • Discord • Live streaming Options > | Futures target levels • Trade rooms • Real time teaching • Discord • Live streaming Futures > |
Robinhood Investment Options
Between Robinhood vs Acorns, there is no contest regarding investment options. Robinhood is a full-on trading platform, allowing its users to control their investments.
Users can buy individual stocks, ETFs, and even trade options contracts if approved. Robinhood became popular with younger investors because of its no-fee options trading.
Most other brokerages charge a fee per options contract traded. Robinhood even allows users to buy fractional shares of companies. This is handy for smaller accounts that wish to invest in expensive stocks like Amazon or Tesla.
Robinhood even allows users to invest in cryptocurrencies directly through its app. In addition, the Robinhood Crypto wallet also offers 0% trading fees for crypto transactions.
Its platform offers popular cryptos like Bitcoin, Ethereum, and DogeCoin. In addition, Robinhood Crypto offers industry-leading security and holds all crypto investments in cold storage. This helps to protect the site from crypto hackers and other malicious attacks.
Acorns Investment Options
Acorns has a more structured way of investing for its users. It has a portfolio of pre-built funds that are created by risk tolerance. These are groups of different ETFs that help investors passively diversify their investments.
This is what is referred to as a robo-investor. This helps out people who don’t follow individual stocks and want exposure to the market. However, Acorns does not allow users to buy individual stocks, fractional shares, or trade options.
Acorns has recently added crypto investing to its platform. The site now offers the Bitcoin ETF, where you can allocate up to 5% of your savings. The program is called Bits of Bitcoin and tracks the ProShares Bitcoin Strategy ETF. This provides exposure to Bitcoin futures and not the actual token itself. So, Robinhood vs Acorns? Let’s keep reading.
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Robinhood vs Acorns Account Types
The different account types that are offered by either platform are indicative of their investing styles. Robinhood offers taxable brokerage trading accounts, as well as margin trading. There are no retirement savings or investing accounts on Robinhood as of right now. This shows how much Robinhood is geared towards young traders, not long-term investors. It is also something Robinhood has been criticized about in the past. Many believe the site is gamifying the stock market and forcing younger investors into riskier trading styles.
Acorns is a platform that is geared toward long-term investing. It offers traditional IRA accounts as well as its standard robo-advisor accounts. It also offers custodial and checking accounts but does not have margin trading or taxable investing accounts.
Robinhood App Review
As much criticism as Robinhood takes, it is difficult to argue with its app’s clean and simple design. It makes investing simple and refreshing, especially compared to the big-name brokerages on Robinhood’s 4.2 Star rating on the iOS App Store, and it is widely known as one of the easiest to trade on. When using the Robinhood app, it is easy to see how the platform is geared towards trading.
Everything is smooth and fast and does feel like trading from a video game. That said, it is still one of the most intuitive and easy-to-use trading apps on the market.
Acorns App Review
The same can be said for Acorns minus the active trading strategies. Acorns has a fast and simple-to-use app with a 4.7-star rating on the iOS App Store. While Robinhood zooms out and focuses on the broader markets and trading individual stocks, Acorns zooms in on your financial situation. Since much of the investing is done for you by the Acorns platform, the app mostly looks at a real-time view of your investment progress.
Final Thoughts
Robinhood vs Acorns? As you can see, both investing platforms have the same goal but offer many different ways of getting there. Robinhood is likely your choice if you are looking for a more dynamic trading experience.
With Robinhood, you can actively trade individual stocks, options, and cryptos in a traditional brokerage environment. Its no-fee trading is extremely attractive to younger investors or those with smaller accounts. At the same time, the app is simple and clean but also designed for riskier trading strategies.
Acorns is the choice for passive investors who want to leave their money in someone else’s hands. With the robo-investor service, investors can designate money to be transferred to Acorns.
Depending on your risk tolerance, the service will allocate these funds across different ETFs. As a result, acorns are an excellent choice for investors looking for long-term capital growth with minimal effort.
