Comparison of Robinhood and Acorns investing apps
Comparison of Robinhood and Acorns investing apps
Robinhood vs. Acorns: The Battle of Investment Apps
Investing has become more accessible and easier than ever with the rise of investment apps. Two popular options in this space are Robinhood and Acorns. In this article, we will compare the two apps and help you decide which one is right for you.
The Biggest Differences
Robinhood and Acorns both offer multiple products and account options for retail investors. However, there are some key differences that set them apart.
Robinhood:
Robinhood is the best choice for DIY traders who want exposure to a wide range of investment options, including stocks, ETFs, cryptocurrencies, American Depositary Receipts (ADRs), and options. It offers a simple web and mobile interface, making it a great choice for beginners as well. One of the biggest advantages of using Robinhood is its low fees. Unlike many other investment apps, Robinhood doesn’t charge any trading fees.
Acorns:
On the other hand, Acorns is more suitable for hands-off investors who prefer automated portfolio management. It also offers banking perks and access to IRAs and custodial accounts. Acorns does charge a monthly fee of $3 or $5, depending on the plan you choose.
Is Robinhood Right for You?
Here are the pros and cons of using Robinhood:
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Pros: – Commission-free stocks, ETFs, options, and cryptocurrencies. – Robinhood Gold offers 4.90% interest on uninvested cash. – Advanced trading features like fractional shares and margin trading. – User-friendly website with advanced charts.
Cons: – No joint accounts, education savings accounts, or mutual funds. – Some research tools are only available for Robinhood Gold members.
Robinhood caters to various types of retail traders, including active traders, day traders, options traders, and crypto traders. It offers a wide range of investment options with no commissions, making it ideal for those interested in crypto trading and hands-on trading. However, it may not be the best choice for investors looking for automated options or mutual funds.
What does Robinhood offer?
Robinhood offers a completely commission-free fee model, meaning you won’t pay any fees for trading stocks, ETFs, options, ADRs, or cryptocurrencies. You can invest in fractional shares with a minimum of $1. Robinhood Gold, the advanced trading subscription level, provides additional benefits such as larger instant deposits, margin trading, advanced market research, and higher interest rates on uninvested cash.
In terms of cryptocurrencies, Robinhood currently supports 18 different cryptocurrencies, including Bitcoin, Ether, and Dogecoin. Trading fees are also waived for these assets. Additionally, Robinhood is launching traditional IRAs and Roth IRAs, offering users access to $0 trading commissions, a 1% match on contributions, recommended portfolios, and more. Robinhood provides a digital library on investing topics, including options trading, to help beginners increase their market knowledge.
Is Acorns Right for You?
Here are the pros and cons of using Acorns:
Pros: – No account minimums and commission-free ETFs. – Acorns Round-Ups invest spare change from purchases. – ETF portfolios tailored to your risk tolerance and investment goals. – Automated custodial investment accounts for kids.
Cons: – Limited investment selection, as Acorns manages your portfolio for you. – Monthly fees are higher compared to other automated advisors.
Acorns is an automated investing account that caters to hands-off investors in search of portfolio management for IRAs and personal investment accounts. Unlike Robinhood, Acorns doesn’t offer as much flexibility in terms of investment options. It focuses on ETFs and doesn’t allow investing in specific companies.
What does Acorns offer?
Acorns offers several banking perks, including a checking account, check deposit, direct deposit, and access to over 55,000 ATMs. It also automatically invests spare change from purchases made with the Acorns Visa debit card.
Acorns provides two account options: – Acorns Personal: This account costs $3 per month and includes access to personal investment accounts, IRAs, banking features, and bonus investments. – Acorns Family: This account costs $5 per month and offers all the features of Acorns Personal, along with custodial accounts.
Both account options include automatic dividend reinvesting, portfolio rebalancing, and recurring investments. Acorns recently added a bitcoin ETF to its offerings, allowing users to allocate up to 5% of their portfolio towards this asset. Acorns also offers retirement accounts like Roth IRAs, traditional IRAs, and SEP IRAs, with portfolios tailored to your age and automatic rebalancing.
How Robinhood and Acorns Compare
To summarize the comparison between Robinhood and Acorns, we have created a table highlighting the key differences:
| Robinhood | Acorns | |
|---|---|---|
| Pros | – Commission-free stocks, ETFs, options, and cryptocurrencies. – Advanced trading features. – User-friendly interface. |
– No account minimums and commission-free ETFs. – Round-Ups feature. – Automated custodial accounts. |
| Cons | – No joint accounts, education savings accounts, or mutual funds. – Some research tools restricted to Gold members. |
– Limited investment selection. – Higher monthly fees compared to other automated advisors. |
For individuals interested in active trading and a wide range of investment options, Robinhood is the better choice. On the other hand, Acorns appeals to hands-off investors looking for automated portfolio management and banking perks.
Ultimately, the choice between Robinhood and Acorns depends on your investment style and preferences. Consider your goals, risk tolerance, and desired level of involvement before making a decision. Happy investing!
Frequently Asked Questions (FAQs)
Stay tuned for the answers to common questions about Robinhood and Acorns!
