Micro investing apps are all the rage right now. They are helping brand new investors get their feet wet and build investing habits, all while automating the experience and investing spare change. Acorns and Stash are two of the most popular options with a few subtle differences.
Each of these micro investing apps is a little different from how they automate your investing to what types of investments you can make. To help you decide between Acorns vs. Stash, I’m going to explain the details of each app. At the end of this article, you can read about my personal experience with both.
First, what is micro investing?
For anyone who hasn’t started investing, there are a few things that are probably holding you back. That could be a lack of funds or a lack of knowledge. Micro investing apps seek to break down those two barriers. Stash and Acorns are just a couple of options, others being Twine, Robinhood, or even Qapital.
Micro investing apps offer new investors:
- The ability to invest your spare change. Helps you feel like you can afford to invest.
- An automated investment process. The apps do the “work” for you.
- A diversified portfolio. The apps assess your risk and help you make informed investment decisions.
Micro investing isn’t entirely mindless, but it does mostly happen in the background. You can go about your day spending as you normally would, with apps like Acorns and Stash pulling money from your bank account and putting it into an investment account for you.
Investing with micro investing apps means you are buying micro shares of ETFs. You don’t own full shares until you’ve invested a certain amount; even then, you might own 1.05 shares of an ETF.
What’s an ETF?
ETFs are exchange-traded funds. These are inherently diverse because they are a collection or basket of securities, instead of putting your money behind one asset. Depending on the ETF, the assets could be stocks, bonds, commodities, etc.
And because ETFs work by tracking the index of the underlying assets, you pay much less because they have lower management fees.
So, buying micro shares of ETFs are less costly and diversify your investments.
Acorns vs. Stash – What each micro investing app offers
Stash was founded in 2015 and offers investors a diverse set of curated portfolios that allow you to invest in your interests. They offer several different types of accounts, which include:
- A dedicated investment account
- Traditional and Roth IRAs
- Custodial accounts
Stash currently has over 2 million users. The app is available for both iOS and Android, and you can also use it on your desktop.
There are three different plans to choose from:
- Beginner $1/mo. Comes with a personal account
- Growth $3/mo. Both personal and tax benefits for retirement investing
- Stash+ $9/mo. Everything above plus investing accounts for two kids, a debit card with 2x stock back, and monthly market insight reports.
As of July 2019, Stash changed their plans to offer more transparent pricing. The above plans are current. One of the major changes is that fees for the Beginner plan (used to be Starter) don’t rise to 0.25%/year of what’s held in each account after your balance hits $5,000.
All of these plans also come with unlimited trades, unlimited education, and light financial coaching.
Learn more about Stash at Stash Review 2020: Worthwhile Investing App or Waste of Time.
Investing with Stash
There are three big things to know about Stash when deciding between Acorns vs. Stash.
Stash offers single stock investing. This is fairly new, and rather than just buying micro shares of ETFs, you can also purchase micro shares of nearly 200 different stocks.
You are responsible for picking each investment. Stash wants to make your investment experience personal and flexible. You can use your money to back things you’re passionate about or, at the very least are interested in. You can also make your decisions based on performance because Stash does provide historical performance data. You can learn more about each ETF and stock by visiting the fund’s website, which Stash links for you.
You have to do the investing. If your account is set up for scheduled deposits into your Stash cash account, every time money hits that account, you are responsible for adding new investments to your portfolio. This is how my account is set up and I have to remind myself that I have money ready to invest, although Stash does send me notifications about this. You can schedule the purchase of specific shares too if you’d like.
Stash’s automated investment options
To start investing with Stash, you will need to set up your account and deposit your first $5 to invest. Then you have some options for how you continue to add funds:
- Scheduled deposits. You can transfer as little as $5 (up to $10,000) every week, two weeks, or a month from your bank account into your Stash account.
- Round-Ups. Stash can save and invest your spare change for every purchase you make from a linked account. Once you have $5 in round-ups, that money will be transferred from your bank to your Stash portfolio. Stash has multipliers too.
- Smart-Stash. From studying the spending patterns on your linked account, Stash learns a safe amount to transfer into your investment account. You can set a maximum amount to transfer.
You can turn these on or pause them in the app. All three of these automated options are available in each Stash plan.
Your Stash portfolio
When you are browsing through Stash’s collection of over 40 different themed ETFs, you’ll notice that they all have catchy names. Those aren’t the real names – Stash has renamed each to give you an idea of what’s in each ETF. When you click on an ETF in the app or desktop, you do get the real name plus a ticker symbol.
Here are a few of Stash’s themed ETFs:
- Consumer Comforts or Consumer Discretionary Select Sector SPDR Fund, Ticker: XLY. Top holdings are McDonald's, Home Depot, Amazon, Nike, and Starbucks.
- Delicious Dividends or Schwab US Dividend Equity ETF, Ticker: SCHD. Top holdings are Pepsico, Home Depot, Coca Cola, P&G, and Pfizer.
- Global Stability or iShares Edge MSCI Min Vol EAFE ETF, Ticker: EFAV. Top holdings are Blk Cash Fund Treasury, Roche Holding, Nestle, Novartis, and Hong Kong & China Gas.
- Real Estate Tycoon or Vanguard Real Estate ETF, Ticker: VNQ. Top holdings are Vanguard Real Estate Ii Index Fund Institutional Plus Shares, American Tower Corp, Crown Castle Intl, Simon Property Group, and Prologis
Stash will suggest investments for you based on the level of risk you’re comfortable with, but you can choose whichever you’d like. On the page for each stock and ETF, you can see the risk level and performance.
Like Stash, Acorns is a micro investing app, but the Acorns offers more of a robo advisor experience. What that means for you is that Acorns takes care of picking your investments and investing your money.
Acorns launched in 2012, and now has nearly 4 million investors. There is a mobile app available on iOS and Android, and you can also use it on your desktop.
Acorns have three different plans to choose from:
- Acorns Core $1/mo. Free for college students. Personal investment account.
- Acorns Core + Acorns Later $2/mo. A personal investment account and IRA.
- Acorns Core + Acorns Later + Acorns Spend $3/mo. This adds an Acorns checking account.
These prices are good for accounts that have less than $1 million. Each of these plans gives you access to Acorns learning center, which is mostly short articles about a variety of financial topics.
Investing with Acorns
Acorns is incredibly simple to start investing with. You create an account, answer a short questionnaire that sets your risk tolerance (you can change this and I’ll tell you about each portfolio in the next section), and link a bank account.
Acorns literally takes care of everything else for you. It’s a set it and forget it model that you really don’t notice.
Acorn’s automated investment options
Acorns and Stash are really similar in the way they automate your investments, although they each have something that sets them apart. Stash has Smart Stash, and Acorns has Found Money.
Automated options available with Acorns:
- Round-Ups. Save your spare change by letting Acorns round up each transaction to the next dollar amount. You can set multipliers too, for 2x, 3x, 10x your rounds ups.
- Recurring deposits. You can schedule deposits from your bank account into Acorns on a weekly or monthly basis.
- Found Money. When you shop at one of Acorns partners (there are more than 100), you get either a dollar amount or percent of your purchase deposited into your Acorns account within 60-120 days.
Learn more about Acorns in the M$M Acorns 2020 Review.
Your Acorns portfolio
Acorns has five different portfolios, from conservative to aggressive – this is the robo advisor part I was talking about.
Your portfolio is made of a mix of 0.10% expense ratio ETFs, and here’s a list of the five different options:
- Conservative. 18% stocks, 80% bonds, 2% real estate
- Moderately conservative. 36% stocks, 60% bonds, 4% real estate
- Moderate. 54% stocks, 40% bonds, 6% real estate
- Moderately aggressive. 72% stocks, 20% bonds, 8% real estate
- Aggressive. 90% stocks, 0% bonds, 10% real estate
Acorns vs. Stash – Comparing each app
Being in control of your investments
Despite the similarities, these apps are wildly different in the amount of control you have over your investments. This one is huge and will depend on what kind of experience you want. Control means you can utilize your money in more personally meaningful ways, which is the service Stash offers.
Here’s the trade-off for that last point – being in control isn’t mindless. If you’d rather know that your investments are being taken care of for you, then Acorns is probably a better choice for you. Acorns also automatically rebalances your portfolio when the market shifts. That’s one more way Acorns gives you a passive and mindless investing experience.
Both Acorns and Stash give you round-ups and recurring deposits, but they differentiate with Smart Stash and Found Money. You could look through Acorns list of partners to see if you frequently shop at any; that might help you choose. Either way, you can use these options or turn them off.
How the apps work
Both apps are designed really well. They are clean and modern, but I’d say that Acorns is just a little cleaner, and this has been echoed by other users as well. This is mostly in part because you just have fewer options with Acorns
At the same time, Stash is fun to browse through and fairly easy to navigate.
Both apps offer a pretty extensive support center that has you search through frequently asked questions. Stash’s looks more like a chat, suggesting articles in the chat box. If you can’t find your answer, you can submit an email ticket.
Acorns didn’t feel like there were quite as many helpful articles, but they quickly redirect you to chat or email support if needed. I messaged them to verify the information below about transfers, and my questions were answered in less than 5 minutes.
Transferring shares out of each app
If you’d like to transfer shares out of Acorns or Stash, this is going to be important to know about. Both apps let you sell micro or full shares like a traditional brokerage does. But, if you want to transfer full shares, Stash charges you $75 per Automated Customer Account Transfer (or ACAT). Remember, that’s only full shares.
Acorns, on the other hand, does not let you transfer shares. You would have to close your account or sell shares to withdraw money.
The cost of each app
The cost of investing with Acorns and Stash is exactly the same for the lowest level plans (Stash Beginner and Acorns Core). They also have the same pricing for the plans that come with a personal investing account, retirement investing, and debit access.
Both apps now have flat monthly fees for all accounts – Stash’s new pricing and plans went into effect in July 2019.
What is very different is Stash+, and that’s the plan offering custodial accounts in addition to everything else for $9/month.
My personal experience with Acorns vs. Stash
Right now I’m using Acorns and Stash a little differently, and I’ve been using Acorns for several months longer than Stash. Here’s how it’s going so far with each…
My experience with Acorns
I’ve had an Acorns Core account since around October of 2018, and I use the round-ups and have a monthly deposit of $100 scheduled (I started this a month later). Since October, my portfolio has grown to $1,184.07. That’s with a moderately aggressive portfolio, with a market gain/loss of 5.19%.
Overall, my experience has been really positive. I normally forget that I have money invested with Acorns until I see the withdraws ding on my bank account.
The only issue I had was not seeing round-ups hit my account very often because I had my debit card set as my only linked card (you have to fund with your bank account but can link credit cards to trigger round-ups). I use credit cards pretty religiously for most expenses. Don’t worry, they are paid off in full twice a month and are used to earn points. But, it was easy to add one of my credit cards to start seeing round-ups.
I bring that up because you need to pay attention to how you trigger your round-ups if you want to get the most out of Acorns.
My experience with Stash
I’m newer to Stash, using the Starter plan (now called Beginner) since May of 2018. I only have my account set up for auto deposits of $10 every week – not using round-ups or Smart Stash. My portfolio is currently valued at $58.34, with a return of +7.42%.
What Stash offers in the way of choosing your investments is incredibly appealing to me. Socially responsible investing is a part of my larger investment strategy, and more than anything, I just want to choose where my money goes. For example, I’m a vegetarian and got really excited to see the Beyond Meat stock as an option in Stash.
However, those choices mean my small portfolio isn’t as diversified as it should be – 36% of my portfolio is in highly risky investments. And, all of the ETFs I have micro shares of have higher expense ratios than what’s held in my Acorns account.
I have choices with Stash, but at a cost.
Keeping track of everything
Now that I technically have investments with three different brokerages, there is a lot to keep track of. Personal Capital has made my life much easier by tracking everything for me. I’ve got all of my investment accounts linked, and Personal Capital shows me information about each fund, like:
- How many shares I have of each stock or ETF
- Daily change
- Historical data
I can also run an investment check up to see my asset allocation. Oh, and Personal Capital is free to use, which is nice considering I’m already paying $2 a month to invest with Acorns and Stash.
Will I stay with Acorns and Stash?
Right now, sure. Eventually, I will need to move my money out of these accounts, and I’m kind of bummed about how the transfers work. When I do close my accounts, I will have to make some decisions about where that money goes.
Talking with an advisor at Schwab, where the rest of my investments are, will help me make a decision. That kind of advice is not something you get with either of these apps.
Final word on Acorns vs. Stash
Both Acorns and Stash have taught me some powerful lessons about investing:
- Investing can be super mindless and passive, if you set up recurring deposits into an account.
- Investing can actually be fun. I’ve gotten into researching each investment I make on Stash, and I know how to do it on my own.
- It doesn’t take as much money as you think to start investing. I haven’t noticed that $140 a month that is being automatically transferred from my bank account to my Stash and Acorns accounts. That’s not a ton of money, and my budget has adjusted in small ways to make it happen.
With all of that being said, I know I’m not going to retire from investing my spare change with Acorns and Stash. Neither will you.
Spare change only goes so far. Still, this is a hard call, because for people who aren’t investing at all, spare change is a great place to start.
In the end, you can pick up some good investing habits along the way by using micro investment apps, then eventually you can transfer them over to a more productive investment strategy.