New app, Acorns, invests your small change in totally infallible stock market

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Will you end up like this guy? (SPOILER ALERT: No)

The stock market: America’s ever-expanding and completely infallible engine of wealth. You might think that it’s exclusively the province of rich guys in suits, but like art, that’s apparently not the case. A new app, Acorns, is offering to round up every debit card purchase you make to the nearest dollar and invest this “change” in the stock market. Our strategy is saving all of our change and spending it on the year’s Glug harvest, but hey, if you want to get poor another way, have at it!

BusinessWeek points out that this is basically the same thing that Bank of America does with their Keep the Change program, where they round up your purchase to the next dollar and takes the money from your checking account and puts it in your savings account. Except now, instead of putting it in a safe place like a savings account, which is run by criminals but at least is insured, Acorns puts your money into the stock market, which is run by criminals and doesn’t have insurance. Fun!

Fortunately, the investing portfolios that Acorns is looking to steer your money into are allegedly safe, passive funds, that are supposed to at least provide better returns than the low interest rates of a savings account. And really, unless you’re using your debit card for literally every purchase, you probably won’t bleed yourself dry with little dribs and drabs of change that get “invested” in some Goldman bro’s powder portfolio. Still, we’re mostly distrustful of the entire stock market apparatus, so we’re just gonna keep taking out change to the TD Bank change machine. You get a free piggy bank if you guess how much change you pour in it!

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  1. What is safe or smart about a savings account? Sure it’s FDIC insured which is great for large amounts of money for anything outside of a total economic collapse – which is highly likely. The problem with savings accounts is you aren’t saving anything. Every dollar you save is losing money every day. You aren’t keeping up with inflation. The interest paid is pathetic. Acorns isn’t a substitute for a savings account and it gives you a chance to maybe do better then the sub 1% interest rates of a savings account. It’s about balance. Don’t ever put all your eggs in one basket, but also don’t trash other kinds of baskets. For spare change its a lot better than a piggy bank or savings account any day. At least be honest and compare apples and oranges.

  2. All securities, such as Acorns’, are definitely insured. SIPC insures 500k worth of your investment. It also gets you into Vanguard, which is usually incredibly not possible to enter without very large sums of money because it’s not a terrible mutual fund and actually gives solid returns.

    Dope industry research, author.

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