Stash and Acorns are money management apps that offer investors the opportunity to automate investment and savings. But which one is best? With all of the different features, fees and investment options available, picking the right one for your needs is difficult.. Here are the similarities and differences.
Stash vs Acorns: Management Fees
Management fees are an important factor when selecting an investment tool or resource. If you’ need assistance from an individual or online platform, you want to make sure you fully understand the associated costs. After all, it’s of no benefit to you if you’re paying more for a service than you’re making or saving. Both Acorns and Stash have associated costs for specific services.
Stash has three different plans to help you grow your money. The first costs $1 per month and can help you learn the basics of money management. With this plan, you receive a personal investment account and debt account access with stock back rewards. Stock-back rewards are fractional share rewards instead of cash-back rewards. As a result, you can think of them as freebies.
The final plan is $9 a month. At this price, you’ll receive all of the above benefits, plus two custodial investment accounts. You’ll also have access to a higher-value rewards program. Additionally, with all of the plans, Stash gives investors some basic information about the set funds they offer.
Investors often choose Stash because of its creative fund names that offer insight into each fund investment. For example, if an investor is passionate about the environment they may choose the Clean and Green fund. This option invests in clean energy like solar and wind power. Stash also offers roughly 150 stocks.
While Stash has a wide variety of stock and ETFs, they don’t offer much guidance in the sense of portfolio management. This may be critical if you’re not as knowledgeable in the field and require additional assistance with your portfolio management.
Acorns also offers three plans. The first costs users $1 per month. It offers access to an Acorns Core Taxable investment account. The second plan, an Acorns Later account, provides users access to an IRA account for $2 a month. Finally, there is the Acorns Spend account. For $3 a month you get bank accounts, debit cards, and investment accounts.
Unlike Stash, Acorns offers users a little bit more investment management. It allows you to match your investment strategy with your personal time horizon, risk tolerance, financial goals and income. Then Acorns allocates your funds with consideration of these factors. Additionally, this platform will rebalance your funds if your portfolio grows beyond your predetermined asset allocation.
However, if you’re just starting to build wealth, flat fee investment structures might not be the best option. For example, if you have $500 in an investment account with Stash, your management fee percentage would be 7.2% per year in the $3 per month account. Also, keep in mind, this may not account for fund fees. These are fees that calculate based on the investments you select.
Stash vs Acorns: Key Features
Consistently contributing to your retirement and investment funds is a key component to building wealth. That said, one of the biggest advantages of using either app is that both platforms help investors automatically invest. Based on your financial goals, time horizon and risk tolerance you can set up automatic contributions to your investment accounts (IRAs or taxable accounts). However, each platform also has a different strategy for helping investors build wealth.
Stash Key Features
With Stash, your purchases round up to the nearest dollar. Then, once your round-ups reach $5, Stash will send the money to your investment accounts. Additionally, Stash offers a stock-back program. This feature allows you to earn fractional shares of stocks or ETFs when you use your Stash debit card. The app also tracks your purchases and provides helpful insight into your spending habits.
Acorns Key Features
Acorns lets investor set up automatic daily, weekly and monthly investments. Every purchase you make can become an investment contribution with Acorn’s round-up tool. Also, Acorns has several “Found Money” partners that let you automatically invest your cash-back rewards into your core accounts. You can shop with over 350 Found Money partners, including AirBnb, Expedia and Direct TV, to earn bonuses that can go toward your investments.
While these platforms may not be the key to helping you retire a billionaire, they will encourage positive spending and saving habits that can help you build wealth over time.
Fund and Investment Costs
Not only do investors typically have to pay management fees, but they may also have to pay for investment expenses that are within the funds themselves. Both Stash and Acorns have different offerings with different associated costs.
Stash Fund and Investment costs
With Stash, you can invest in a wide variety of ETFs. But, depending on which ETFs you choose, they may come at a higher cost. Some of Stash’s ETFs have annual fees, which can go up to 0.95%. This is higher than the annual ETF fees of other robo-advisors, which usually aren’t much higher than 0.25%.
Acorns Fund and Investment Costs
With Acorns, users can invest in low-cost ETFs whose composition is of a variety of stocks and bonds. The fees on these low-cost funds average about 0.10%, which is extremely affordable.
Who Stash is Good For
If you want a hands-on investing experience, Stash might be a good option. Often, robo-advisors pride themselves on creating a hands-off experience for users. This is because they tend to do all of the investing and trading. But with Stash, you make the trading and investing decisions.
The company provides some help and guidance for first-time investors. If you want to start investing but don’t know where to start, Stash teaches you how to select suitable investments, manage your portfolio and offers insight on good trading tactics.
Stash may also be useful for long-term investors since it teaches you how to watch and be patient with your investments. By using this strategy, it may help you build wealth over the long-term.
Who Acorns is Good For
Acorns is typically geared toward young and new investors. Particularly, college students who can benefit and might qualify for fee-free management for up to four years. For investors who are just getting started, you may want to consider opening an Acorns account.
Also, if you struggle with saving and consistently contributing to your investment accounts, you may find Acorns’ round-up tool is useful. This feature automates your contributions so you don’t have to worry about forgetting to make them. It’s also an affordable option if you don’t have much to put toward investing.
StashAcorns Management fees $1-$9 $1-$3 Account minimum $0 $0 to open, $5 to start investing Automatic investing Yes Yes The Bottom Line
Overall, investors may expect to pay less with the Acorns platform in comparison to Stash. Low-cost funds and minimal management fees can help you grow your money at a faster pace since all fees can dip into your returns over time. But, if you want to invest in a wider pool of ETFs and access individuals stocks you may be better off with Stash.
However, it’s important you select the right investment platform for your needs. If you’re unsure of what may work for you, be sure to shop around and compare. Make sure you consider each option’s management fee, fund fees, investment strategies and objectives, professional guidance and accessibility. From there you should be able to formulate a clear picture of the best way forward. Also, you may see how you can most effectively manage your investment strategy.
Financial Advisor Tips
- Neither Acorns nor Stash provide features for investors who have a more complex financial situation. If you have multiple types of investments, you may want to talk to a financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
- The rise of robo-advisors has coincided with a bull market. But what do the algorithm-driven advisors do when there’s a major downturn? The general wisdom is not to panic when things head south, but an automated system of rebalancing may sell when prices are low. Before you sign up with any advisor – robo or human – make sure you know and like what they will do should stock prices fall.
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