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Acorns is a micro-investing app that helps you grow your wealth with just a few cents at a time – By rounding up purchases and investing the difference.

Quick Summary:

Acorns is a micro-investing app that helps individuals invest small increments of money through round-ups. When you open an account with Acorns and opt-in for “round-ups,” debit card purchases are rounded up to the nearest dollar. They also offer retirement accounts and custodial accounts if you have a family.

Overall Rating:

Tools & Features:

Ease of Use:

Price:

PROS

• No minimum investment
• Simplicity
• Micro-investing

CONS

• Limited investment options
• High fees
• Lack of control

Price:

$3 – $9/mo

Features:

Rounds up transactions to the nearest dollar and invests the difference

1% – 3% Cashback at popular retailers

Automatic Investing

Mobile App:

Yes

Current Promotions:

None listed

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In our Acorns Review 2023, we’ll dive into the ins and outs of this beginner-friendly investing app so you can decide if it’s the right investment tool for you.

What is Acorns?

Imagine if your spare change could grow into a thriving investment account. That’s the magic of Acorns, a smartphone app that allows beginners to start investing with just a few dollars. Acorns helps users grow their wealth over time through its unique feature of rounding up transactions from your linked accounts and investing the difference. Once the rounded-up transactions reach $5, Acorns invests that amount in a portfolio and ETFs and Bonds based on your pre-selected risk tolerance.

Note: The average Acorns user rounded up $46.82 in spare change in 2022, according to Acorns research.

Acorns is designed for people who want a simple, hands-off approach to investing. The app offers the following features:

• Links your credit card and checking account
• Rounds up each transaction to the nearest dollar
• Invests the difference in a pre-selected Acorns investment portfolio

This helps you to start building your nest egg effortlessly. Acorns also offers custodial investment accounts for kids through Acorns Family, making it a great option for the whole household.

How Does Acorns Work?

Acorns is a micro-investing app that helps individuals invest small increments of money through round-ups. When you open an account with Acorns and opt-in for “round-ups,” debit card purchases are rounded up to the nearest dollar.

Once the round-ups reach five dollars, Acorns automatically invests the money on your behalf, making it a truly seamless investing process.

The investments are made based on a pre-selected portfolio based on your desired risk tolerance – from aggressive to conservative.

Round-Up Example:

1. You buy a coffee for $3.50
2. Acorns rounds up the purchase to $4.00
3. The difference: $0.50 is set aside
4. Once your round-ups reach $5, that amount is automatically invested based on your investment selection.

There are also round-up multipliers – you can adjust your round-ups to be 2x, 3x, or even 10x, the rounded amount to magnify your investing.

Once you open and select your account type ( I opened an Acorns Personal), you connect your account, choose a level of risk tolerance, and let the app do the rest. I was able to open my account in a matter of minutes.

When I opened my account, I selected an “Aggressive” account comprising 55% VOO, 30% IXUS, 10 % IJH, 5% IJR. I also set my round-ups to 3X and recurring cash deposits to $30 daily.

Who Should Use Acorns?

Best For:

Beginner Investors: If you’re unsure how to get started, Acorns makes it easy by automating the entire investment process.

Set it and forget Investors: Investors who want a way to invest without thinking too hard.

Investors with a tight budget: If you don’t have hundreds or thousands of dollars to invest, the round-up functionality of Acorns makes it easy to start investing with just a few cents at a time.

Key Features

The secret sauce behind Acorns lies in its innovative approach to investing. The app simplifies the investing process and aids in wealth creation by rounding up transactions from your linked accounts and investing the surplus, all without your active realization.

We’ll explore further how Acorns facilitates this.

Round Up Transactions

Acorns’ “round-up” feature is the heart of its micro-investing strategy. When you make a purchase with a linked debit or credit card, the app rounds up the transaction to the nearest dollar and moves the difference from your linked bank account into your investing account. Hence, without active effort, you consistently investing small amounts of money.

To boost your investments further, Acorns also offers “Round-Up Multipliers,” which allow you to multiply your round-ups by two, three, or even ten times. This means you can invest even more spare change with each transaction, accelerating your savings growth. You can turn on and off round-ups as you please.

Account Types

While Acorns’ primary feature is micro-investing, the platform also offers 3 account types with various features to suit different needs. From personal investment accounts to family plans, there’s something for everyone, including the option to have a linked account.

Whether you’re looking to save for retirement, build a college fund, or just

Acorns Personal

For just $3 per month, Acorns Personal gives you access to a comprehensive suite of financial tools. In addition to the Acorns Invest platform, this tier includes Acorns Later – a retirement account offering Traditional IRA, Roth IRA, and SEP IRA options. You’ll also get Acorns Checking, a cash management account with direct deposit, mobile check deposit, over 55,000 free ATMs, and a debit card that applies Acorns and Acorns Later investing to every purchase.

Acorns Personal Plus

• Investing
• Personal, diversified investment account
• Round up your spare change
• Retirement account with tax advantages
• Investment accounts for kids
• Add stocks to your diversified portfolio

Acorns Premium

For $9 per month, Acorns Premium provides access to a full suite of investing tools for you and your family. When you open a premium account, you can invest in individual stocks – a feature unavailable at the Personal and Personal Plus levels.

• Investing
• Personal, diversified investment account
• Round up your spare change
• Retirement account with tax advantages
• Investment accounts for kids
• Add stocks to your diversified portfolio

Banking

• All digital banking with no hidden fees
• Debit card that invests with every swipe
• Auto-invest a piece of each paycheck
• Save with an Emergency Fund

Education

• Basic courses to get you started
• Live Q&A with financial experts
• Regular market reports to stay in the know
• Live onboarding guidance

Earning

• Earn bonus investments at 15K+ stores
• Up to 30% invested while you shop
• Shop with our Chrome & Safari extension
• Extra bonus investments on qualifying rewards

Benefits

• GoHenry debit card and learning app for kids
• Complimentary will, valued at $259
• $10,000 life insurance policy for eligible customers

Investment Options

When you invest through Acorns, you must select a “theme” – either core portfolios – which gives exposure to a wide range of ETFs and bonds, depending on your risk tolerance. The other theme is “ESG” portfolios. These portfolios provide returns similar to traditional investments, with the added benefit of exposure to socially responsible companies. You can invest in bitcoin ETFs through the ESG portfolios.

1. Select a Theme – Core Portfolios or ESG Portfolios
2. Select a level of Aggressiveness Ranging from Aggressive to Conservative.
3. Once you select your level of aggressiveness, Acorns will automatically invest in stocks and ETFs that fit the risk profile.

To provide context, an aggressive portfolio is comprised of primarily large cap stocks, while a conservative portfolio is comprised of short term government and corporate bonds.

In my opinion, the “aggressive” portfolio isn’t that aggressive because 55% of it invests in VOO, which is simply an S&P 500 index fund, but perhaps this is intentional because Acorns is targeted toward beginner investors.

User Experience

Acorns is available for desktop and mobile devices, and both offer a sleek design and easy-to-use interface.

Desktop

When you log in to the Acorns website, your accounts are neatly organized, and it shows the available balances in each account.

I did find it slightly annoying that despite only opening a “Personal Account,” the homepage showed the option to set up a “Later” account and an “Early” account instead of hiding them from view.

You can also see “bonus” amounts earned from places you can shop at. Although I find it somewhat odd that they advertise Acorns as an investing and savings app, but, in my view it encourages you to spend by showing you what stores you can earn cash back at.

Mobile

Most Acorns users, including myself, use the mobile app more frequently than the desktop app.

The mobile app is nicely designed and has a similar feel compared to the desktop. I could log in to my Acorns account using facial recognition to avoid fumbling with long passwords.

Like the desktop, I did find it slightly annoying that despite only opening a “Personal Account,” the homepage showed the option to set up a “Later” account and an “Early” account instead of hiding them from view.

PROs and CONs Explained

PROS

Low Minimum Investment: You can start investing once your round-ups reach just $5, meaning you don’t need hundreds of dollars to buy just 1 stock.

Simplicity: The beauty of Acorns is its simplicity. Many users like the “set-it-and-forget” approach to investing and are often overwhelmed by constantly having to make investment choices.

Micro Investing: For those who don’t have the financial means to invest large amounts of money or don’t want to invest right away, Acorns’s micro-investing strategy is a great way to get started.

CONS

Limited investment options: The investment options available through Acorns are limited to a pre-selected set of ETFs, which may not be the best fit for everyone’s risk tolerance and investment goals.

Lack of control: With Acorns, you do not have the option to choose which specific stocks or bonds you want to invest in. You also can’t control your risk by adjusting your allocation or by choosing different funds.

High fees: The fees associated with using Acorns can be relatively high, especially when compared to other investment options. The app charges a monthly fee of $3, $5, or $9, depending on the plan, which can eat into your returns over time.

Pricing and Fees

While Acorns’ unique investing approach is undoubtedly attractive, it’s equally important to reflect on the platform’s fees and its competitiveness in the market.

Acorns offers three subscription tiers: Personal for $3/month, Family for $5/month, and Premium for $9/month. Each tier provides a range of features, with the higher-priced options offering more extensive benefits such as access to Acorns Early and Acorns Grow.

Acorns doesn’t charge any other management fees or commissions. However, you will have to pay any fees that are charged by ETFs you have invested in. In addition, there is a monthly fee depending on which subscription tier you have:

• Personal: $3 month
• Family: $5 month
• Premium: $9 month
• Management Fees: Varies depending on the funds you are invested in.
• Withdrawal Fees: None for investing accounts. Fees may apply for retirement accounts.

Fee Comparison

On an absolute basis, Acorns fees aren’t high $3 – $9 per month is nothing to most people.

Compared to other robo-advisors, Acorns’ fees can be relatively high for users with small investment balances. For example, a $36 annual management fee on a $1,000 balance equates to a 3.6% fee. This is considerably higher than the standard management fee of 0.50% charged by many robo-advisors, according to Investopedia.

However, as your investment balance grows, Acorns’ fees become more competitive. At a $10,000 balance, you’d be paying a more reasonable 0.36% fee per year. Reflecting on your investment balance and comparing fees is crucial to ascertain whether Acorns aligns with your financial needs.

Acorns Earn: Boost Your Investments

In addition to its core investment features, Acorns also offers a unique rewards program called Acorns Earn. This program helps you boost your investments by earning extra cash through cashback partnerships and a browser extension.

Because credit card points can be so lucrative days with many top cards offering up to 3% cashback, by offering a cashback program Acorns aims to attract users who might be otherwise turned off by losing credit card points.

Cash Back Partnerships

Through Acorns Earn, you can shop with over 12,000 brands, including:

• Airbnb
• Blue Apron
• Macy’s
• Warby Parker

And receive cashback rewards directly into your Acorns account. This means you can grow your investments simply by shopping with participating brands.

To make the most of these cashback rewards, follow these steps:

1. Shop through the Acorns app or website.
2. Use your linked payment method to make your purchases.
3. Acorns will automatically invest cashback rewards into your account, helping you grow your wealth even faster.

Best Alternatives

Acorns faces competition from other micro-investing apps and robo-advisors, each with its own unique features and pricing structures.

For those seeking a more comprehensive investment platform or wanting access to human financial advisors, alternatives like Betterment or Stash may be more suitable.

Stash

Both Acorns and Stash offer micro-investing features, but there are some key differences between the two platforms. While Acorns focuses on rounding up transactions and investing the difference in a pre-selected portfolio, Stash allows users to invest in individual stocks and choose from a broader range of investment options.

In terms of fees, both platforms charge a monthly fee, with Acorns’ fees ranging from $3 to $9 and Stash’s fees starting at $1 for its most basic plan. However, Stash may offer more flexibility and control over investments for users looking for a more hands-on approach to micro-investing. At the same time, Acorns is better suited for individuals who want a more hands-off approach.

Betterment

Acorns and Betterment are both robo-advisory platforms that offer automated investment management services. However, Betterment provides a more comprehensive range of investment options and lower fees for larger account balances.

Betterment’s annual fee is 0.25%, which is lower than Acorns’ fees for small balances.

For example, you would need more than $10,000 invested with Acorns for a comparable fee rate. For users with larger investment balances, Betterment may be a more cost-effective option, offering more extensive investment options and lower fees.

The Bottom Line

Acorns offers a unique approach to investing, making it an attractive option for beginners and those looking to build a savings habit without too much leg work.

With its innovative rounding-up feature, Acorns makes it easy to grow your wealth without even realizing it. That said, if your employer offers a tax-deferred retirement account like a 401K or a 403B, you may be better off investing through that account as years of tax-free growth can add up.

Lastly, I would not consider myself a beginner investor and don’t find the app’s novelty particularly useful. I can see how some users like the idea of investing micro amounts of money under the veil of not realizing those round-ups are being invested, so there is a specific time and place for this app.

Overall, that app isn’t a bad idea for pure beginner investors, but more experienced investors are likely better off investing independently.

Frequently Asked Questions

Is Acorns worth using?

Acorns offers a convenient way to invest money and save for retirement, making it an attractive option for beginners. Its user-friendly app has high ratings, micro-investing feature, and diversified funds that help make investing safe and secure. Whether Acorns is worth using depends on your investment goals and whether the fees are worth it.

What is the downside to Acorns?

Acorns’ fees can be expensive, especially on small balances, and there is no tax strategy available. Additionally, you won’t have access to more advanced features like other robo-advisors offer. All this makes it hard to justify Acorns for those starting with lower sums to invest.

Is Acorns legit and safe?

Acorns is a legitimate and safe app, employing 256-bit encryption, two-factor authentication, and securities protected up to $500,000 with the Securities Investor Protection Corporation (SIPC). All of this makes it an excellent choice for securely managing your finances.

Is Robinhood or Acorns better?

It depends on the investor’s personal preferences: for hands-on investment, Robinhood is the better option for trading individual stocks, ETFs, and Cryptocurrencies. Meanwhile, Acorns offers more features for hands-off investing, such as impact investing and custodial accounts. Ultimately, by comparing Robinhood vs. Acorns, you can choose the platform that best suits your needs.

Read our complete Acorns vs Robinhood Review.

I tried some of the most popular stock-picking services – here’s what I discovered.

5 Best Stock Picking Services

• Best Overall: Alpha Picks by Seeking Alpha
• Best for Buy and Hold: Motley Fool Stock Advisor
• Best for Momentum Trading: CNBC Investing Club
• Best for Swing Trading: Mindful Trader
• Best for Short Term Trading: Action Alerts Plus

1. Best Overall: Alpha Picks by Seeking Alpha

• Best For: Buy and Hold investors
• Overview: Alpha Picks is Seeking Alpha’s in-house investing group. Alpha Picks subscribers get 2 monthly stock picks selected by their in-house investment team run by Steven Cress, a former Hedge Fund manager
• Returns: Alpha Picks has returned 159%, vs. 55%, outperforming the S&P 500 three-fold since inception in 2022(returns as of January 2nd 2025).
• Price: $41/mo ($449/year)
• Current Promotions: $50 off full price of $499
• Pros: Stock market outperformance, investing community engagement
• Cons: Limited track record, requires familiarity with the Seeking Alpha Rating system, No skin in the game

Note: Alpha Picks is a stand-alone investing service from Seeking Alpha. You do not get a Seeking Alpha subscription with an Alpha Picks subscription – they are two different services.

TRY ALPHA PICKS

When I signed up for Alpha Picks, I was a bit skeptical, given its limited track record. However, the service has continued to outperform the market, so I can’t complain.

or read our complete Alpha Picks Review.

2. Best for Buy and Hold: Motley Fool Stock Advisor

• Best For: Long-term investors
• Overview: Stock Advisor offers monthly stock picks from the company’s co-founders, Tom and David Gardner, who each manage separate teams of analysts. The service recommends stocks from established companies with proven track records and strong growth potential. Stock Advisor also recommends when to sell, a feature differentiating it from many other stock-picking services.
• Pros: 2 stock picks per month, High long-term returns, stock research reports
• Cons: Constant upselling, limited portfolio analysis
• Price: $99/year
• Current Promotions: 50% Off Full Price ($199/year)

TRY MOTLEY FOOL

At $99/year, it’s hard to beat the pricing. I’ve used Motley Fool for a while, and while none of their recent investments have been home runs, it’s a good subscription to keep in your investing stack.

*$99 is an introductory price for new members only. 50% discount based on current list price of Stock
Advisor of $199/year. Membership will renew annually at the then-current list price.

or read our complete Motley Fool Review.

3. Best for Momentum-Oriented Investors: CNBC Investing Club with Jim Cramer

• Best For: Active investors, momentum-oriented investors
• Overview: The CNBC Investing Club is a subscription-based investing service that provides stock picks, portfolio analysis, and market news from Jim Cramer and his team. Jim created the Investing Club to help all investors build long-term wealth in the stock market, and the CNBC Investing Club is now the official home of Jim Cramer’s Charitable Trust. The investing club is the only place to view the charitable Trust’s stock picks. It’s not available on Mad Money or any other investing platform related to CNBC.
• Returns: 17.06% over the past 5 years (Since 2019).
• Price: $49.99/mo
• Current Promotions: 20% off Yearly Subscription

The investing club’s performance is largely on par with the S&P500’s returns over the same period. While this isn’t necessarily bad, I wouldn’t expect to see any really unique picks.

or read our complete CNBC Investing Club Review.

4. Best for Swing Trading: Mindful Trader

• Best For: Swing traders
• Overview: Mindful Trader is a stock and option-picking alert service focusing on swing trading. Swing trading is a trading style that generates profits from small to medium price movement over a short period – typically a week or less. Mindful Trader was built on the premise that using rigorously back-tested statistical strategies can generate wealth through stocks, options, and futures trading. The platform was founded and built in 2020 by Eric Ferguson, who has over 20 years of stock trading experience. He spent over 4 years and $200,000 of his own money developing the statistical tools used by Mindful Trader. He has a degree in Economics from Stanford University – his pedigree is legit.
• Returns: Varies depending on investment strategy
• Price: $49.99/month, no long-term commitment

I used Mindful Trader for a very short time frame and found the constant trading somewhat difficult to follow and the website cumbersome. I’m more of a buy-and-hold investor, not a swing trader.

Read our complete Mindful Trader Review.

5. Best for Short Term Trading: Action Alerts Plus

• Best For: Short-term traders
• Overview: Action Alerts PLUS is a subscription-based stock-picking service offered by TheStreet.com. This service was founded by financial analyst and commentator Jim Cramer, known for his work on CNBC’s “Mad Money,” along with a team of research analysts.
• Price: $12.50 – $29.99/mo

Read our complete Action Alerts Plus Review.

What are Stock Picking Services?

Stock picking services are platforms that offer recommendations on which stocks to buy and sell. They’re designed for investors who may not have the time or expertise to conduct thorough stock research on their own.

What to Look for in Stock Picking Services

When evaluating stock-picking services, it’s important to consider several key factors to ensure you choose a service that aligns with your investment goals and style.

1. Track Record: Check the service’s historical performance. A consistent record of successful stock picks is a good indicator of reliability.
2. Investment Philosophy: Ensure their approach matches your investment strategy, whether it’s long-term growth, value investing, or short-term trading.
3. Transparency: A reputable service should be transparent about their successes and failures, providing detailed analysis to support their picks.
4. Cost vs. Value: Assess the subscription cost relative to the value you receive. High fees do not always equate to high returns.
5. Quality of Analysis: Look for services that provide in-depth research and analysis rather than just stock tips. Understanding the ‘why’ behind a pick is crucial.
6. Diversity of Picks: A good service should offer a range of picks across various sectors and industries to help diversify your portfolio.
7. Educational Resources: Especially beneficial for new investors, educational content can enhance your understanding of the market.
8. Frequency of Picks: Ensure the frequency of stock recommendations aligns with your desired level of market activity.

Even the best stock picking services don’t guarantee profits, and investing always involves risk. It’s important to use these services as one of many tools in your investment strategy and not rely solely on them for decision-making.

Conducting your own research and due diligence is always crucial in investing.

Stock Picking Strategies

1. Value Investing: This strategy involves looking for undervalued stocks that are priced below their intrinsic value. Investors using this strategy believe the market will eventually recognize and correct the undervaluation.
2. Growth Investing: Growth investors seek companies with strong potential for future growth. These stocks may not pay dividends but are expected to grow at an above-average rate compared to other companies in the market.
3. Income Investing: Focused on generating steady income, this strategy involves buying stocks with high dividend yields. It’s popular among retirees and those seeking regular income.
4. Momentum Investing: Momentum investors look for stocks that are experiencing an upward price trend. They buy these stocks and hold them until the trend begins to reverse.
5. Index Investing: While not strictly stock picking, index investing involves buying index funds that track a market index, offering diversification and reflecting the market’s performance.
6. Technical Analysis: This strategy uses statistical trends gathered from trading activity, such as price movement and volume

Read more: How to Research Stocks.

Benefits of Stock Picking Services

Stock-picking services offer several benefits, particularly for individual investors who may not have the time or resources to conduct extensive market research.

1. Expert Analysis: Stockpicking services often have experienced analysts who provide expert insights, making it easier for investors to make informed decisions.
2. Time-Saving: Doing thorough stock research can be time-consuming. These services save time by providing ready-to-use investment suggestions.
3. Educational Resources: Many services offer educational content that can help investors learn more about the stock market, investment strategies, and financial analysis.
4. Diversification: Good stock picking services offer recommendations across various sectors and industries, helping investors diversify their portfolios.
5. Access to Specialized Knowledge: These services often have access to sophisticated tools and data that individual investors may not have, providing an edge in the market.
6. Risk Management: Some services provide guidance on managing risk, including how to diversify and when to exit positions.
7. Performance Tracking: Many stock picking services offer tools to track the performance of their recommendations, making it easier for investors to evaluate their investment choices.
8. Community and Support: Some services create a community of investors where ideas and strategies can be shared, offering support and a sense of belonging.

Our Review Methodology

Investing in the right financial products is crucial for achieving your financial goals. That’s why our review methodology is designed to give you a comprehensive understanding of various investing platforms and tools. Here’s a breakdown of what we focus on:

Tools and Features

We dig deep into the suite of tools that each platform offers. Whether it’s automated investment features, tax optimization, or specialized charting tools, we evaluate how these features contribute to smarter investing decisions. We ask questions like:

• What is its main offering, and how does it compare to its peers?
• How effective are the risk assessment tools?
• Are there any value-added services like educational content?

Price and Value

Price matters, especially when it comes to investing, where every penny counts. We analyze:

• Subscription fees
• Hidden Charges
• Price compared to the overall value received

We’ll let you know if the platform gives you the most bang for your buck.

Ease of Use

User experience can make or break an investment platform. We assess:

• Interface Design – Is it intuitive and easy to use?
• Mobile app availability and functionality
• Customer Support – where applicable.

Nobody wants to navigate a clunky interface when dealing with their hard-earned money.

Stock Breakdown

Good investing is rooted in great research. We examine:

• The quality of stock analysis tools
• Returns on an absolute and comparative basis
• Availability of real-time data
• Depth of research

We check if the platform provides actionable insights to make informed decisions.

How We Do It

1. Hands-On Testing: I signed up for Mindful Trader to provide real insight. This is how I give my unique perspective. We’re unlike some other sites where they simply rehash marketing materials.
2. Customer Reviews: What are other users saying? We look at reviews and customer feedback to gauge public opinion.
3. Comparative Analysis: Finally, we compare each platform against competitors regarding features, pricing, and user experience.

In this UNest review, we’ll dive into the platform’s offerings, costs, and usability to help you determine if this investment service for your child’s financial future.

Quick Summary:

Unest is a user-friendly investing platform designed to make it easy for parents to save and invest for their child’s future. Using the app, parents can set up a Uniform Gift to Minors Act (UGMA) account and select from various curated portfolios based on their risk tolerance and investment horizon.

Overall Rating:

Investment Options:

Ease-of-Use:

Tools & Features:

Price:

PROS

• Gifting feature
• Flexible use of funds
• Easy-to-use app

CONS

• Limited tax benefits
• Monthly Fees
• May impact future financial aid

Navigating the realm of investing can be a complex endeavor, particularly when considering long-term goals such as funding your child’s future. That’s where Unest comes in.

What is UNest?

Unest is a user-friendly app designed to help parents invest in their children’s future.

The platform aims to simplify the often complicated world of finance and make saving for your child’s education or other future expenses an accessible and straightforward process. Unest does this by offering a tax-advantaged investment account for kids, known as a Uniform Gift to Minors Act (UGMA) account.

What Are UTMA Accounts?

UTMA funds refer to money saved or invested within an account established under the Uniform Transfers to Minors Act (UTMA). The UTMA is a law that allows minors to own property such as securities.

When you open a UTMA account, you’re essentially creating a trust fund for a minor where the assets will be managed by a custodian until the minor reaches the age of majority (usually 18 or 21, depending on the state). The assets in a UTMA account can include cash, stocks, bonds, mutual funds, and other types of property.

One of the key aspects of UTMA accounts is that the funds can be used for anything that benefits the child – not just educational expenses. This could be anything from college tuition to buying a car or funding a wedding.

However, once the child reaches the age of majority, they gain full control over the assets in the account. It’s also worth noting that while UTMA accounts do offer some tax benefits, they may not offer the same level of tax advantages as other types of accounts, such as 529 plans, which are specifically designed for education-related expenses.

How Does UNest Work?

UNest makes it easy for parents to set up a saving and investment plan for their children. UNest saving and investment accounts are UTMA/UGMA (The Uniform Transfers to Minors Act) custodial accounts. These offer parents the flexibility to use the money they save and invest for all the life stages their child goes through including college savings.

The money saved and invested in a UNest account can be used for education and other important life stages. UNest also includes a simple gifting feature that makes it easy for family and friends to contribute to a child’s UNest account. Parents can also add valuable rewards to their child’s account when they shop with over 150 UNest brand partners.

Opening a UNest account is simple, secure, and takes less than five minutes. You can download the UNest app in the Apple and Google Play Store

Key Features

Unest provides several key features to simplify the process of investing for your child’s future. Here’s a closer look at these features:

UGMA Investment Account

Unest helps you set up a Uniform Gift to Minors Act (UGMA) account for your child. This type of account allows you to invest in a wide variety of assets on behalf of your child, providing more flexibility than other types of child-specific accounts, like 529 Plans which are specifically for education-related expenses.

Automated Tax Advantaged Investing

You can set up automatic monthly contributions to your child’s account. You have the flexibility to choose the amount and can change it at any time.

Gifting

Unest offers a gifting feature where friends and family can contribute to your child’s account. You can share a link with family and friends who want to gift money, which can be particularly useful during birthdays, holidays, or other celebrations.

Once a UNest gift link is received, it can be used anytime to send gift funds  by credit/debit card or ACH. Gifts are sent directly into a child’s UNest account.

User-Friendly Mobile App

Unest provides a user-friendly mobile app that allows you to manage your child’s account, adjust contributions, and monitor investment growth from anywhere.

Cash Back Rewards

Unest partners with brands to offer cash rewards back into your child’s account when you shop.

Investment Options

UNest has multiple 8 investment options for all kinds of investors. Its investment options are based on Vanguard ETFs, and some of the portfolio options include a portion of FDIC-insured cash holdings. Through UNest you can change your asset allocation at any time, but be aware that there may be tax implications.

Conservative Portfolio

Invests in Fixed Income and bond ETFs.

Agressive Portfolio

Invest in 100% Equities through Vanguard Equity Index ETFs.

Aged-based Options

[Conservative, Moderate, Aggressive]

Each of these portfolios includes a mix of fixed income and equity investments which shift the investment mix (what’s called rebalancing) from more aggressive to more conservative investments as the child gets older. The goal is to maximize growth at a young age and gradually reduce risk of volatility in the account as they get closer to the time they gain access to the funds.

Socially Responsible Aged Based Options

[Conservative, Moderate, Aggressive]

Three socially responsible age-based options (conservative, moderate, aggressive). Each of these portfolios includes a mix of fixed income and equity investments which shift the investment mix (what’s called rebalancing) from more aggressive to more conservative investments as the child gets older.

The goal is to maximize growth at a young age and gradually reduce risk of volatility in the account as they get closer to the time they gain access to the funds.

UNest Cost

For its services, Unest charges a flat monthly fee of $4.99 per account, or $39.99/year with an annual subscription – a 33% discount.

plus any While there are no additional trading costs or penalties for withdrawals, keep in mind that the money in the UGMA account does need to be used for the benefit of the child, and any earnings may impact the child’s financial aid eligibility when it comes time for college applications.

Who Should use UNest?

PROs and CONs Explained

Unest, like any investment platform, has its strengths and areas that may not suit everyone. Here are some pros and cons to consider:

Alternatives to UNest

If you’re looking for alternatives to Unest for saving and investing for your child’s future, you have several options.

Below are some popular alternatives:

EarlyBird

Overall Rating:

EarlyBird is a mobile app that allows parents, family, and friends to invest in a child’s future through a UGMA account, similar to Unest. The app also has a feature where gift-givers can record a video message for the child.

• Account Type: UGMA
• Minimum Investment: $5
• Monthly Cost: $2.95/mo for one child
  $4.95/mo for multiple children
• Processing Fee: 2% per gift (charged to the giver)

Backer

Overall Rating:

Backer is a platform that allows you to create a 529 college savings plan, and then provide a unique link to family and friends where they can contribute easily. 

• Account Type: 529 College Savings Plan
• Minimum Investment: $5
• Monthly Cost: $5/mo,
• Processing Fee: $1.99 (charged to the giver)

Is UNest Worth It?

The value of Unest largely depends on your specific needs and financial goals. If you’re looking for a simple, easy-to-understand platform that enables you to regularly set aside money for your child’s future, Unest offers a straightforward and user-friendly solution. The ability to involve friends and family through the gifting feature also adds a unique element that can help accelerate your savings goals.

However, it’s worth noting that Unest is not the only option for child-specific investment accounts. There are also 529 plans, which are specifically designed for education expenses and offer their own set of tax advantages. Additionally, while Unest’s flat fee structure is simple, it may be more expensive than percentage-based fees for those investing smaller amounts.

Frequently Asked Questions

What is the difference between a 529 and a UTMA?

529 plans and UTMA accounts both serve to invest for a child’s future, but they differ significantly. 529 plans are specifically for education expenses, remain under the control of the custodian even after the child reaches adulthood, and offer tax-free growth and withdrawals for education expenses.

On the other hand, UTMA accounts can be used for any expense benefiting the child, control transfers to the child at the age of majority, and while they offer some tax advantages, they don’t have the same tax-free benefits as 529 plans.

Unlock your financial future with income-generating assets that work for you, even while you sleep.

Investing in income-generating assets can help you build wealth over time. These assets provide consistent income while also potentially appreciating in value.

Below we explore 5 Income Generating Assets you may want to consider.

What Are Income Generating Assets?

Income-generating assets are investments that produce a steady stream of income, typically through interest, dividends, or rental payments. These include stocks that pay dividends, bonds, REITS, music royalties, and real estate.

As the name implies, income-generating assets focus on generating cash flow as opposed to capital appreciation. While capital appreciation can also occur, it’s not the primary objective of investing in these types of investments.

1. Dividend Stocks

Dividend stocks are shares of companies that regularly distribute a portion of their earnings to shareholders as dividends.

These stocks are a popular type of income-generating asset because they provide a steady stream of income, typically on a quarterly basis.

Investors favor dividend stocks not only for the regular income they provide but also for their potential for capital appreciation. Companies with a history of consistent and growing dividends are often well-established and financially stable, making dividend stocks a key component in many income-focused investment portfolios.

PROS

• Steady Income Stream: Dividend stocks provide regular income, making them ideal for passive income seekers.
• Lower Volatility: Companies that pay dividends are often more stable and less volatile than growth stocks.
• Compounding Returns: Reinvesting dividends can lead to significant compound growth over time.

CONS

• Dividend Cuts: Companies can reduce or eliminate dividends, impacting income and potentially the stock price.
• Market Risks: Dividend stocks are still subject to market risks and can lose value during economic downturns.

2. Bonds

Bonds are a type of income-generating asset where investors lend money to an entity (such as a corporation, municipality, or government) in exchange for periodic interest payments and the return of the bond’s face value at maturity.

They are considered relatively safe investments, particularly government and high-quality corporate bonds, making them attractive for conservative investors seeking stable income.

PROS

• Stable Income: Bonds provide regular and predictable interest payments
• Lower Risk: Generally less volatile than stocks, making them a safer investment option
• Diversification: Adding bonds to a portfolio can help reduce overall risk

CONS

• Lower Returns: Typically offer lower returns compared to stocks, particularly for high-quality bonds.
• Interest Rate Risk: Bond prices can fall if interest rates rise, as newer bonds may offer higher yields.

3. REITS

REITs must distribute at least 90% of their taxable income to shareholders as dividends making them attractive to income-focused investors. The income-generating properties and rental income streams provide relatively stable and predictable cash flow. While primarily income-focused, REITs also have the potential for capital appreciation, adding another layer of returns.

You can invest in publicly-traded REITs like you would a traditional equity. You can also invest in non-traded REITs through a real estate crowdfunding platform like Fundrise or Groundfloor.

REITs can be a valuable addition to an income-generating investment strategy. They offer high dividend yields, potential for diversification, and liquidity. However, like any investment, they come with risks that need to be carefully considered.

PROS:

• Diversification: REITs provide exposure to real estate, which can diversify an investment portfolio and reduce overall risk.
• Liquidity: Unlike direct real estate investments, REITs are traded on major stock exchanges, making them easy to buy and sell.
• Professional Management: Investors benefit from the expertise of professional management teams who handle the property management and acquisition strategies.

CONS

• Lack of control. As an investor in a REIT, you have limited control over the specific properties in the portfolio and how they are managed.
• Interest rate sensitivity. REITs may be more sensitive to changes in interest rates, as higher interest rates can make it more expensive for REITs to borrow money and may reduce the value of existing fixed-income investments held by the REIT.
• Dividend risk. REITs are required to distribute at least 90% of their taxable income to shareholders in the form of dividends, but there is no guarantee that dividends will be paid or that they will be sustained at current levels.

You might also be interested in: Ultimate Beginner’s Guide to REIT Investing.

4. Music Royalties

Music royalties are a type of alternative investment where payments are made to music creators and rights holders for their music. They are a form of compensation for using intellectual property, in this case, the music itself.

Music royalties can provide a reliable and steady income stream for investors, with returns ranging from a few percentage points to double-digit returns.

The returns from investing in music royalties can vary widely and depend on several factors, including:

• Popularity of the music
• Type of royalty
• Length of the royalty agreement

For example, mechanical royalties from physical and digital music sales may offer a fixed rate of return of around 9.1 cents per song per copy sold. In contrast, performance royalties may offer a variable rate based on the number of plays or performances.

In some cases, investors may be able to negotiate a higher rate of return by acquiring a music catalog or song that is particularly popular or has a proven track record of generating royalties.

Read more: The Ultimate Guide to Investing in Music Royalties.

PROS

•  Steady Income Stream: Music royalties can provide a steady income stream as long as the music continues to be used and generate revenue. This makes them an attractive investment for investors seeking consistent returns.
•  Low Correlation with Other Asset Classes: Music royalties have a low correlation with traditional asset classes such as stocks and bonds, making them a valuable diversification tool for an investor’s portfolio.
• Predictable Income: Royalties from well-known songs with a proven track record of revenue generation can provide predictable income and a measure of security for investors.

CONS

•  Lack of Transparency: The music industry can lack transparency, making it difficult for investors to determine the value of music royalties.
•  Difficulty in Valuing Music Royalties: Music royalties have no standardized valuation methods unlike other assets, such as stocks or real estate. This can make determining their value for capital gains or tax purposes difficult.

5. Real Estate Crowdfunding

Real estate crowdfunding is when investors pool their money together through a crowdfunding platform to fund some or all of a real estate project.

The types of crowdfunded real estate projects can vary from individual properties to large multi-family apartment complexes and retail spaces.

Crowdfunded deals generally have a long investment horizon of at least 3 years. However, some platforms specialize in deals that can be as short as 6 months.

Crowdfunded real estate investments are private investments. They do not trade on an exchange like the NYSE. Instead, the investments are structured as a private REIT, an LLC, or a debt note, like a Limited Recourse Obligation.

Read more: Ultimate Guide to Real Estate Crowdfunding

PROS

• No Property Management: When you invest in real estate crowdfunding, you get the benefits of investing in real estate without the stress of property maintenance, tenant management, and insurance, to name a few.
• Non-Correlated Returns to the Stock Market: Private real estate has a correlation of 0.14 and -0.12 with publicly traded stocks and bonds, as noted in a TIAA study on private real estate investing.

CONS

•  No Independent or Public Source of Performance Data: Because real estate crowdfunding offerings are private investments, they do not provide the same level of information as you commonly see for publicly traded REITs.
•  High Fees: Private real estate investments tend to have higher fees compared publicly traded REITs. Most crowdfunding platforms have a 1% asset management fee, while the average publicly-traded REIT ETF has an expense ratio of 0.41%. In comparison, REIT mutual funds have an average expense ratio of 0.85%, according to the Motley Fool.

How To Buy Income Generating Assets

There are several avenues available to you if you are interested in buying income-generating assets.

• Dividend Stocks and Bonds: You can use traditional brokerages like Charles Schwab and Fidelity
• REITS: Publicly traded REITs can also be purchased through traditional brokerages
• Music Royalties: Royalty Exchange
• Real Estate Crowdfunding: Groundfloor or Fundrise