Is Acorns Legit and Safe for Investors?

Is Acorns legit and safe for investors?

Acorns, the micro-investing app, that takes your spare change from your regular transaction and save it and invest that change for you in a range of exchange-traded funds (ETFs), was launched by founder and son Walter and Jeff Cruttenden in August of 2014.

The CEO of Acorns is now Noah Kerner. The company heavily appeals to millennials and beginner investors who may not have a lot of money to put toward their retirement savings. Acorns’ mission was to “make investing accessible to everyone.”

Today, the company has over 6 million members. That alone is proof that the Acorns is legit.

Check out: Is Acorns Worth It? Acorns Review: Pros & Cons

Acorns provides its members three services. The first, “Acorns Invest,” tracks your debit and credit card purchases and round them up to the nearest dollar, then takes the difference and puts it aside for investing in exchange-traded funds (ETFs).

The second, Acorns Later, enables members to create and fund an IRA. Acorns will recommend an IRA that is right for you. Then, they will update it regularly to match your goals.

The other provides members with a checking account with a debit card to spend money.

But, is Acorns legit? Is it safe for investors? Here’s how to know whether Acorns is a legitimate and safe company.

***Next Steps: Planning for Retirement can be overwhelming. We recommend speaking with a financial advisor. This tool will match you with up to three advisors.

Here’s how it works:

Answer these few easy questions about your current financial situation.
Sit back while our tool matches you with up to three advisors who can provide expertise based on your specific goals. It only takes a minute.
Check out the advisors’ profiles, interview them on the phone or in person and choose who to work with in the future.

Please enter your zip code and Find Your Advisor.

What is Acorns?

According to SmartAsset, “Acorns is a robo advisor whose service is based on the old idea of saving your spare change. Indeed, its name comes from the proverb, paraphrased here, that mighty oaks start as small acorns. This robo-advisor rounds up all of your credit or debit card purchases to the nearest dollar, and then invests that change into a portfolio of ETFs. Everything is done online and is automated, so you can just set it and forget it.”

Here’s how to find out whether Acorns is legit and safe.

Is Acorns Legit and Safe: 8 Ways To Know:

1. Acorns is regulated by the Securities and exchange Commission.

Of the best ways to determine if Acorns is legit and safe is to know whether it is regulated by the Securities an Exchange Commission (SEC).

Any brokerage firms that handle stocks and other securities, like Acorns, must be regulated by SEC. SEC oversees the securities market to make sure there is fair dealing and privacy.

However, SEC does not protect individual investors against losses. Instead, SEC prosecutes companies and individuals that engage in fraudulent behavior or insider trading.

According to the Acorns website, “brokerage services are provided to clients of Acorns by Acorns Securities, LLC is a SEC registered broker-dealer.” Thus, this ensures that Acorns is legit and safe for investors.

So, is Acorns worth it?

Download the free app now. Once downloaded, you will pick your investment portfolio based on your age, income level and goals. Acorns will take care of the rest for you.

2. Acorns’ user base is growing fast.

According to Forbes, Acorns’ user base has grown from 4.6 million to 6.8 million users in 2021. This rapid growth is a testament that Acorns is legit.

Moreover, the company’s goal is to grow its base to 100 million customers. In a recent announcement, the company said it was partnering with online job market ZipRecruiter.

That will allow its members to search for jobs and apply for them within the platform.

3. Several major brands and high profile celebrities and investors invest in and support Acorns.

As an effort to expand its user base, the company has attracted well-known brands, such as PayPal, BlackRock, NBCUniversal, Rakuten, and so many others.

Acorns has also attracted high-profile celebrities and investors such as the famous basketball player Kevin Durant, the actor Dwayne Johnson (the Rock), Ashton Kutcher, and Dany Garcia. In 2019 Jennifer Lopez and Alex Rodriguez reported that they were investing in Acorns.

4. Acorns is a member of the Financial Industry Regulatory Authority (FINRA).

Another factor that proves Acorns’ safety and legitimacy is the fact that it is a member of FINRA, a self-regulatory organization where most brokerage firms voluntarily participate.

SEC oversees self-regulatory organizations (SRO). And members of the FINRA comply with the rules and regulations of SRO. According to the Acorns’ website, the company declares that it is a member of FINRA.

Thus, it is fair to say that that Acorns is legit and safe for investors.

5. The Securities Investor Protection Corporation (SPIC) protects Investment Accounts with Acorns.

Investment accounts with Acorns are insured by SPIC. SPIC is a nonprofit membership corporation that protects money invested in a brokerage firm that files for bankruptcy or encounters financial hardship.

It protects up to $500,000 for securities and cash or up to $250,000 for cash only per account. However, SPIC authority to investigate or regulate its members.

6. Major business support Acorns as a legit and safe company

For example, in 2019, according to Apple, Acorns is the “App of the Day.” Moreover, financial experts have stated that Acorns is their favorite app, because “it makes it simple and cheap to make small investments. It’s a great muscle builder for creating a habit of putting away money.”

7. Read Acorns reviews by their members to see if it’s legit.

Part of your search “is Acorns legit and safe” should include reading customer reviews about their experiences with the company. Performing a simple internet search for “Acorns reviews,” then you will find customers rating their experiences.

These reviews can help you determine if Acorns is indeed legit and safe. These reviews can give you the inside story on everything about Acorns from customer service to performance.

One thing to keep in mind, however, is that happy customers are less likely to submit a review than unhappy ones.

So read these reviews with an open mind. Indeed, it’s important to look for reviews that are based on facts rather than opinions.

8. Check Acorns’ website.

Another way to know if Acorns is legit and safe is to thoroughly review its website. A company may seem genuine, but there are a few things that can throw up a red flag. Things to look for to see if Acorns is legit are:

How long have they been in business. According to its website, LendingTree has been in business since 2014.
Does it offer customer service? If there is no contact support, no address, no phone number to reach the company, this may be a red flag that the company is not legitimate. Fortunately, Acorns’ homepage is full with that information. So there is no need to worry on that point.
See if Acorns has a policy page: A legit company will have terms of use and conditions pages such as privacy policy pages. Again Acorns does have this information, which can lead you to conclude it is legit.

Is Acorns Legit and Safe? FAQs

Is my money safe with Acorns?

Investment accounts with Acorns are covered by the Securities Investor Protection Corporation (SPIC). SPIC protects accounts up to $500,000 for securities and cash or $250,000 for cash only per account. Acorns is also a member of FINRA and SEC.

Moreover, several 500 Fortune companies such as PayPal, Blackrock, Capital Group, NBCUniversal, support and invest in Acorns. Additionally, several celebrities such as Ashton Tucker, Kevin Durant, Jennifer Lopez invest in the company. These high profiled celebrities and companies would not have invested in something they did not trust or think is safe.

Is it safe to enter my social security number in Acorns?

Acorns’ security team encrypts sensitive details such as social security numbers, ensuring that they will be safe from hackers.

The Bottom Line

Is Acorns legit and safe? The answer is “yes.” Acorns is a member of SEC, FINRA and SPIC. In addition, the company is backed by well-known brands, high-profile celebrities and investors such as the famous basketball player Kevin Durant, the actor Dwayne Johnson (the Rock), and Jennifer Lopez.

Put Your Money to Work

Managing your money effectively starts with careful planning. With SmartAsset, you can get matched up with three advisors who can empower you to make smart financial decisions. SmartAsset also helps take the mystery out of retirement planning by answering some of the most commonly asked questions in a simple, personalized way. Learn more about how SmartAsset can help you find your advisor match and get started now.

Is Acorns Legit and Safe for Investors?