Both of these are internet-based investing apps, that both have similarities and differences. It is important to realize that they are geared towards different types of investors.
I had Acorns for several years and I loved the platform initially, however they updated a few months ago and it became very confusing to find the information I needed. That was a major downside. Although, the pros outweighs the cons. The main benefit of Acorns is the ‘Round-up’ style of investing. This is really for individuals that do not have a large stockpile of cash and allows them to ‘micro-invest.’ Essentially your spare change is used to invest and the app invests for you. Your money is invested into 6 ETF’s that have over 7000 companies embedded into them but you were able to specify what kind of investing strategy you wanted. Depending on your strategy then the percentage into each ETF varies. This ensures that your investment is diversified and robust.
Another downside is that there is a monthly fee of $1.00, so it can take time to break-even in terms of how strong the market is and the dividends earned from the ETF’s. Also, in terms of what you receive this is not expensive.
The best part is that Acorns is the best way for a beginner to start dipping their toe into the world of investing. It is easy to manage and it can be set up and forgotten about. You can have daily, weekly, or monthly deposits as well as the round-ups and it can grow quickly like an Acorn.
Investing style: Hands-off
Cost: The first level is $1.00 and any subsequent tiers or account type are more expensive.
Robinhood is geared towards investors that want to invest in particular stocks or ETFs. This is a ‘create-your-own’ approach, where you create your own portfolio. This means that there is an expectation of research on your part before purchasing shares of a stocks. This also means that you can lose money, but also earn more money depending on your investing style. This route is free which is a plus. However, there is no micro-investing, meaning the entirety of the share price needs to be purchased. For individuals who are just starting to invest and do not have a lot of knowledge of the market or cash, then starting with Acorns might be best.
Click here for more info: Robinhood, get a free stock
Investing style: Hands-on
Cost: Free, unless you decide to go for Robinhood Gold. This costs about $5.00 a month.
All in all, it really depends on where you are in the investing game. I, personally, started off with Acorns since it gave me a grounded understanding of the market and what to expect. I am primarily using Robinhood at the moment because I like that it is free and gives me a chance of a hands-on approach.