Acorns vs Stash: Which Investment App is Better?

Investing
Updated: 9th Sep 2020
Written by Kim Pinnelli
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Investing
August 21, 2020
Written by Kim Pinnelli

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In this Article: A Stash vs Acorns Comparison. Find out which investment app is better, how much they cost, and their overarching investment strategy.

If you’re in the market for a robo-advisor, then you’ve heard of Stash and Acorns. Realistically, they are both micro-investing and savings apps, but they have the features of a robo-advisor too.

With similar features and a crazy amount of information, it can seem hard to choose, especially when their pricing seems the same.

In this guide, we break down the differences, show you which app reigns supreme in each category, and help point you in the right direction. Without further ado, our Stash vs Acorns comparison.

About Acorns

You likely know Acorns as the ‘spare change investor.’ They invest your spare change after each purchase. Say you spend $5.70 on an item. Acorns takes the $0.30 and sets it aside. It keeps doing this until you have $5 – then it invests that saved money into predefined portfolios.

Acorns is an Investing app that invests your spare change. Stash tells you what you should invest in.
Source: Acorns.com

That’s right, all you need is $5. Who said you had to be rich to invest? Acorns was one of the first to dispel those myths.

For it to work, you link your debit or credit card to the app and it automatically rounds up your purchases to the nearest dollar.

We recommend linking your most-used card – the one you use for grocery shopping, paying your bills, and buying household goods. If you want your roundups made to a different increment, set it up in your dashboard – it is that easy.

Related: Acorns Investing Review

About Stash

Stash is another micro-investing app, but it works a little differently. Stash has a similar round-up option, but that’s not their bread and butter. Stash promotes automated and regular deposits into your investment account. If you don’t want that pressure, you can make one-time deposits too.

Stash vs Acorns: Which one is Better?
Source: Stash.com

Unlike Acorns, Stash recommends asset allocations and specific investments, but you do the investing – they only provide recommendations. What we love are the simple terms they put everything in, making it easy for those that never invested before.

Related: Stash Invest Review

Stash vs Acorns: Standout Features

Stash and Acorns both have similar minimum balance requirements. While Acorns advertises a zero account minimum requirement, they won’t invest until you have $5 accumulated, and Stash requires a $5 minimum balance, so it’s a wash.

Stash and Acorn have other similarities including their round-up features and the chance to buy fractional shares. Beyond that, though, certain features make each one stand out.

Acorns Standout Features:

Automatic investments

Acorns acts like a true robo-advisor by investing your change ($5 minimum) in a pre-selected portfolio based on your income, savings, goals, and risk tolerance. They assign you a portfolio with a specific asset allocation and divvy up your investments accordingly.

Round-ups

Round up every purchase to the increment you desire (nearest dollar or more if you wish). Once you hit $5, Acorns invests the money, starting your investment account with literally spare change.

Found Money

More than roundups, Found Money is a cashback reward you earn by shopping at one of Acorn’s 2,000 partners with your linked debit or credit card. Think of it like cashback rewards on your credit card, but instead, you invest the money.

Acorns Spend

Save and invest with the Acorns debit card. You’ll earn round-ups and Found Money back instantly, investing faster in your investment and/or retirement account. With all digital banking and no fees, it’s a bank card with benefits.

Stash Standout Features:

DIY investments

Stash gives advice based on your income, goals, and risk tolerance, but you manage the investments with their guidance.

Stock-Back Program

Earn stock back (rather than cashback) when you shop at one of Stash’s partner retailers. Many partners are places we all shop at, such as Target, Home Depot, and McDonald’s. Earn 0.125% of each purchase back in fractional stock shares and earn up to 5% on Stock-Back Bonus Rewards which change frequently.

Flexible investment options

You are not stuck with a handful of themed portfolios made of ETFs you can’t customize. Stash recommends specific stocks and ETFs in particular allocations to make the most of your goals and risk tolerance, but they offer the option to add your own insights/investments as you see fit.

Smart-Stash looks for extra money

With your permission, Stash will evaluate your spending, look at your repeat bills, and determine when you have ‘extra money’ to sweep into your investment account. You can set a limit, such as $5 or $10, and Stash won’t transfer funds needed for regular bills or routine spending.

Stash vs Acorns: Management Fees

Both Stash and Acorns charge management fees, but they’re only a few dollars a month. Depending on the services you want, they range from $1 to $9.

Acorns Pricing

  • Lite $1/ month – Set up a taxable investment account, round up your purchases, and earn Found Money.
  • Personal $3/month – Set up a taxable investment account, retirement account, and checking account all in one. Earn bonuses in addition to your round-ups and Found Money.
  • Family $5/month – Get everything in the personal account plus taxable investment accounts for all your kids and family financial advice.

Stash Pricing

  • Beginner $1/month – Set up a taxable investment account and bank account to earn Stock-Back.
  • Growth $3/month – Access to a personal investment and retirement account, along with your bank account with Stock-Back.
  • Stash+ $9/month – Includes everything in the Growth account plus investing accounts for 2 kids

Keep in mind with both accounts – this is a steep percentage of your assets under management if you only have a small amount invested. As you invest more, though, your fee as a percentage of assets under management decreases.

Investment and Fund Expenses

Both Stash and Acorns invest in ETFs (some people invest directly in stocks with Stash too). If you choose ETFs, though, you’ll have other fees in addition to your subscription fee. Each ETF has a management fee, which is separate from what Stash or Acorns charge.

On average, Stash’s annual ETF fees are around 0.95% and Acorns are much lower at around 0.10%.

Stash vs Acorns: Investment Strategy

In this section, we highlight both Acorns and Stash’s overarching investment strategy.

Acorns Investment Strategy

Acorns utilizes the Modern Portfolio Theory, which creates a diversified portfolio based on your timeline and risk tolerance. It doesn’t focus on individual investments, but rather the portfolio as a whole. Acorns reallocates your investments as needed if your portfolio gets knocked off course.

Stash’s Investment Strategy

The Stash Investment Strategy has three key components:

  • Invest for the long-term – Stash wants investors to set it and forget it. Do not make emotional-based decisions or pull your money out because you ‘made a lot.’ Keep the money as is until you’ve reached your timeline for the intended goal.
  • Dollar-cost averaging – Investing regularly takes advantage of the market’s highs and lows. Some weeks you may buy assets at a high price and other weeks a low price, over time, the price averages out.
  • Diversify – Based on your risk tolerance and goal timeline, Stash recommends you diversify your funds between stocks and bonds. Some portfolios may include emerging market assets and others may include all bonds – it depends on your risk tolerance.

Related: Checkout our ultimate guide on Dollar Cost Averaging

Stash vs Acorns: Mobile Apps and Accessibility

Both Stash and Acorns have mobile apps making it easy to manage your investments on-the-go. However, both platforms are available in your browser too. This means you can manage your accounts from anywhere – both accounts automatically sync, so you’ll see the same information no matter the device.

Human Advice: Do they ‘hold your hand’ as you Invest?

Neither Stash nor Acorns has human advisors. Sure, you could ask customer service questions (mostly via email) but you will not get financial advice like you would get from a human advisor. Both apps are meant to be ‘low key’ and automated, helping beginners start investing with as little money as possible, showing them there is a way to invest in their goals, including retirement even if they live paycheck-to-paycheck.

Who is Acorns Best for?

Acorns comes out cheaper, so if keeping your expenses down is a concern, Acorns wins. It’s also best for younger investors just starting. Seeing that you can invest with less than one dollar and build up a decent-sized portfolio with regular effort helps millennials and young investors see the power of compounded earnings and sound investment strategies.

If you don’t mind letting Acorns choose your portfolio based on how you answer specific questions and you want a completely hands-off approach, Acorns is for you.

Who is Stash Best for?

Stash is best for those that want to manage their own investments, but need hand-holding. You would prefer not to have a portfolio determined for you, but you want someone to tell you what allocations to have so you can choose themed ETFs and stocks that fit. Stash puts everything in layman’s terms so even the beginning investor can make tough investing decisions.

Wrapping Up: Stash vs Acorns

Acorns may cost you less in fees, but you give up control of your portfolio. If you prefer to invest in stocks or choose your ETF themes, Stash offers more flexibility and choice.

Think about your investment strategy, what type of support you want, and how much input you want in the process. Don’t forget to consider fees and the overall function of the investment app to determine which is right for you.

Additional Reading: 

Kim Pinnelli
Kim Pinnelli
Kim is a personal finance expert with a Bachelor’s degree in Finance from the University of Illinois at Chicago. She has been freelance writing for 13 years for a number of large publications. Kim thoroughly enjoys helping people take charge of their personal finances.