Saving for a rainy day

Have long wished for a simple tool that could be used by anybody with a few dollars to invest. A tool that makes investment an automatic process, placing money in share-based investments without the hassle of going through a broker.

Such a tool now exists, in the form of Acorns. Acorns has been operating successfully in the United States since 2012 but was only launched in Australia in 2016, where it already has more than 250,000 users.

Acorns is designed to be an entry-level product for anybody who wants to dip their toes into the investment water. It offers low fees, no minimum balances and the ability to deposit and withdraw any time.

Investments can be made using lump sums or recurring deposits, but a feature I love is Round-Ups, which helps people save and invest their small change. For example, if you bought a cup of coffee for $3.50 on your credit or debit card, Acorns would round that up to four dollars and invest the surplus fifty cents into your Acorns account.

When I first heard about Acorns in early 2016, I decided to ‘test drive’ it by making an initial deposit of $1000 and linking the Round-Ups feature to a debit card I use for small transactions. When I made the first deposit, I was asked which investor category I would place myself in – I started with ‘moderately conservative’ but have recently changed it to ‘aggressive’, just to experience how the program works. The sum you invest is then automatically spread across an asset allocation in line with the risk level you have chosen.

I am amazed at how the money has grown.

The total deposits from the Round-Ups program have been $601, and in addition I have received $51.90 in dividends from the ETFs (exchange traded funds) in which my money is invested. The portfolio is currently worth $1803.74, so in just 16 months I have received $51.90 of dividends and $150.84 of capital growth. That’s equal to 11.17% per annum before fees.

Acorns is far more than just a method of investing small sums – it is also a brilliant educational tool. You can roam about the fi ve investment categories and look at how the portfolio changes as you change your risk level. If you decide to use the program as a saving tool, it will give you a projected balance at any date in the future you choose.

The Acorns app is free to download and no fees are charged if you don’t invest. Once you’ve invested, $1.25 will be charged per month for accounts with a balance under $5000. For balances greater than $5000 there is an additional management fee of 0.275% per year (charged monthly, computed daily). There are no exit fees and no withdrawal fees.

My advice is to go to and have a look for yourself.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: