Wealthfront vs. Acorns – Overview
There are many options available to would-be investors, including full-fledged robo-advisors, micro-investing apps, and a myriad of financial tools all promising to help you grow your wealth. The list of robo-advisors on the market keeps growing, so how do you decide if Wealthfront or Acorns is best for you?
In this comparison, we’ll look at one of the largest stand-alone robos and a micro-investing app for the everyman (or woman). You’ll learn:
- Which robo-advisor is best for investors with children?
- Which robo-advisor is good for a beginner?
- How do I make investing a habit?
- Wealthfront vs. Acorns – Overview
- What is Wealthfront?
- What is Acorns?
- Top Features
- Who Benefits?
- Fees and Minimums
- Wealthfront vs. Acorns – Robo Investing Deep Dive
- Wealthfront vs. Acorns – Which is Best? The Takeaway
- More Comparison Articles
*This article contains affiliate links to help pay for this website. That said, our reviews are held to the highest standards of honesty.
What is Wealthfront?
If you’ve heard of robo-advisors before, you’ve likely heard of Wealthfront. This robo is one of the largest independent digital investment robo-advisors on the market and currently manages north of $25 billion in assets (AUM). Clients can invest in many account types including IRAs, 529 College Savings accounts, and trusts.
Wealthfront is a unique automated, digital robo-advisor. Wealthfront allows users to add exchange traded and cryptocurrency funds. Users can add ETFs or create stand alone ETF portfolios of their chooseing. Wealthfront clients can add funds like country, investment style, sector, tech and robotics funds and many more. The company offers other financial services such as portfolio reviews, loans and a high-yield checking account. Through these additional products, Wealthfront covers a wide range of financial needs.
Sign up now and get your first $5,000 managed for free:
What is Acorns?
Acorns is a micro-investing app that helps you save money by rounding up everyday purchases and investing the spare change. For example, your $1.75 coffee will be rounded up to $2.00 even, and $0.25 will be invested. This investment method gets even the most cash-strapped investor started quickly and easily.
Designed to be inclusive and accessible to all, Acorns provides its Core portfolio to students with an .edu email address for free for up to 4 years. Acorns also offers “found money” partners so that clients can earn extra investment money just by shopping at places like Walmart.
Realistically, Acorns users will benefit if they set up an auto-invest feature to add additional money to their account, thereby speeding up their investing and wealth building.
|Overview||Goals-based investment manager with digital financial advice, crypto, cash management, and lending.||Automated investment manager that invests your “spare change” in a portfolio of exchange traded funds (ETFs).|
|Minimum Investment Amount||$500||None. App automatically invests Round-Ups once the total reaches $5 or more.|
|Free Services||Free portfolio review, home buying guide and FREE investment management|| |
Students with a .edu email address can use Acorns Core for free, for up to four years.
|Fee Structure||0.25% AUM|| |
$1 per month for Acorns Lite.
|Top Features||Account management. Customize with ETFs and cryptocurrency. Daily tax-loss harvesting. Smart beta and risk parity investing. Individual stocks for large accounts. Cash management and borrow.||With card, save and invest money while you spend on everyday expenses; “Found money” partners, such as Lyft and Walmart, automatically add to your account.|
|Investment Funds||Low fee ETFs from diverse asset classes. Can customize and add ETFs and crypto funds. Individual stocks - for accounts over $100,000.||Low-cost ETFs from Vanguard, Blackrock and iShares.|
|Accounts Available||Individual and joint investment accounts. Roth, traditional, SEP and rollover IRAs. Trusts. 529 college savings plan accounts. HIgh yield checking/savings account.|| |
Taxable brokerage accounts, IRAs, and a checking account with attached debit card.
|Contact & Investing Advice||Phone M–F 10 am–8 pm EST |
|Phone M-F 6:00 am – 5:00 pm PST |
|Promotions||Get first $5,000 managed for free with this link.||Visit Acorns now and check it out.|
Wealthfront Top Features:
- Top-notch Wealthfront investment portfolios for all types of investors
- Hundreds of additional ETFs to customize your portfolio – including cryptocurrency funds
- Daily tax-loss harvesting – more frequent than other robo-advisors
- High-yield checking account for investors seeking liquidity
- Loans options
- Digital financial planner – Path
Acorns Top Features:
- Micro-investing, which means investors can buy fractional shares in large companies
- Free Core accounts for students with an .edu email address (up to 4 years)
- “Found Money” option when making purchases at common businesses, such as Walmart and Lyft
- Round-Ups which make investing easy and automatic
Both Wealthfront and Acorns are beneficial for individuals who want to keep their investments and savings or checking accounts under the same roof. The Wealthfront checking/savings account comes in the form of a high-yield cash account. Acorns clients with Acorns Spend have access to a checking account and debit card.
If you’re interested in picking your own ETFs, customizing an existing investment portfolio or creating your own, then Wealthfront is for you.
If you lack the $500 minimum investment amount then choose Acorns.
Investors with children will also like both robo-advisors. Wealthfront offers a 529 College account, while Acorns’ Family plan allows parents to set up investment accounts for their children.
Wealthfront is best for clients who prefer comprehensive all-digital investment advice. Wealthfront compares its comprehensive Path Financial Planning with the services of human financial planners. It is the most comprehensive investment planning questionnaire we’ve seen.
Intermediate and advanced investors will lean towards Wealthfront. With the opportunity for investment customization, borrowing, a high yield cash account and single stock investing, Wealthfront is more comprehensive than Acorns.
Clients who like the idea of tax-loss harvesting will appreciate Wealthfront. This robo offers daily tax-loss harvesting, which the company explains can save clients more money on capital gains taxes than less frequent methods.
Sign up for Wealthfront now and get your first $5,000 managed for free:
Acorns is one of the best robo-advisors for new investors because it’s designed to be simple and not overwhelming. The premise behind Acorns is that anyone should be able to invest, no matter how much money they earn or how much know-how they have.
Acorns round up is ideal if you have trouble saving money. The Round-Up feature makes saving money effortless: you don’t even need to think about it! If you’re feeling really ambitious, you can also add modifiers to your Round-Ups. That said, you’ll need to invest more than a dollar or two a week to fund retirement or other major financial goals.
For example, if you spend $5.75, regular Round-Ups will make your purchase $6.00 even and move $0.25 to your investments. With a 3x modifier, you’ll move $0.75 to investments.
Fees and Minimums
Minimums Winner: Acorns wins.
Fees Winner: Acorns is also an easy victor in this category. Although, With this link, Wealthfront users get their first $5,000 invested for free.
Wealthfront Fees and Minimums
Despite the fact that Wealthfront is certainly one of the most affordable robo-advisors on the market with its $500 minimum initial investment, there are many more robos around with lower (or no!) minimums. While $500 is low in comparison to other robos, like Personal Capital’s $100,000 minimum investment, it’s a lot for new investors who might be living paycheck to paycheck.
Still, Wealthfront is reasonable on the fee front. Clients will pay a flat 0.25% AUM for their Wealthfront portfolios. This is fairly standard among robos in Wealthfront’s category. And Wealthfront Cash is fee-free.
Acorns Fees and Minimums
Acorns does not have a minimum balance requirement, though Round-Ups will only be invested once they reach $5.
Acorns fee structure for accounts valued up to $1 mil is as follows:
Acorns Lite: $1 per month
Acorns Lite clients have access only to investment accounts. Invest accounts include Round-Ups, Found Money partners, and educational articles.
Acorns Personal: $3 per month
Like Acorns Lite clients, Personal clients have access to Invest. They can also open Later accounts, which is Acorns’ retirement account plan, and Spend accounts, which is Acorns’ zero-fee checking account.
Acorns Family: $5 per month
Acorns Family has all the benefits of Acorns Personal, plus Early accounts for children. Early clients can have investment accounts for multiple children with no added fees. They also receive financial advice tailored to families.
Wealthfront vs. Acorns – Robo Investing Deep Dive
Wealthfront vs. Acorns – Human Financial Planners
Neither Wealthfront nor Acorns offers human financial planners. Clients who are looking for human advice might seek out a robo-advisor like Betterment, which allows clients to text with financial professionals.
SoFi Invest also offers fee-free investment management, live financial advisors, and no minimums.
Those with larger portfolios may also prefer a robo-advisor like Schwab Intelligent Portfolios, which comes with a hefty initial investment but offers a lot of live support both in person and online.
Wealthfront vs. Acorns – Tax-Loss Harvesting
Of the two robos we’re looking at today, only Wealthfront offers tax-loss harvesting. Wealthfront’s daily tax-loss harvesting process is much more frequent than other robos currently on the market. Tax loss harvesting is only useful in taxable brokerage accounts, as your money grows tax-free while in a retirement account.
Tax-loss harvesting can save you from hefty capital gains taxes. The process behind tax-loss harvesting is simple: the robo-advisor sells off some investments at a loss so as to offset your net gains. When done correctly, this results in a lower tax bill for investors who have had rapid growth.
Wealthfront vs. Acorns – Investments
Winner: Wealthfront wins this one due to its greater variety of ETFs and bitcoin and ethereum funds.
The following asset classes are included in the basic robo-advisor fund.
- US Total Stock Market
- Foreign Stock – Developed Market
- Foreign Stock – Emerging Market
- Dividend Appreciation Stock
- US Treasury Inflation Protected Bond (TIPs)
- US Government Bond
- Municipal Bond
- US Corporate Bond
- Foreign-Emerging Market Bond
- Real Estate
- Natural Resources (Energy)
Wealthfront also offers hundreds of additional ETFs from many sectors and investing styles. Greyscale cryptocurrency funds are also available.
Diversified ETFs from these asset classes:
- Large Stocks
- Small-Cap ETFs
- Corporate Bonds
- Government Bonds
- Emerging Markets ETF
- Real Estate
Wealthfront vs. Acorns – Rebalancing
Winner: It’s a tie.
Whenever your portfolio allocations get out of whack, it’s time to rebalance. For example, you might prefer to keep a portfolio made up of 75% stocks and 25% bonds. If your allocations get off track and your percentages switch to 80% stocks and 20% bonds, a good robo-advisor will reduce those over-weighted asset classes and bulk up the underweighted funds to bring you back into your ideal allocation.
The rebalancing process can reduce investment volatility and keep your asset mix in line with your risk comfort level.
Acorns and Wealthfront clients can both expect that their portfolios will be regularly rebalanced. Wealthfront rebalances periodically in addition to their tax-loss harvesting procedures. Acorns tends to review portfolios quarterly, rebalancing portfolios when allocations are at least 5% off target.
Wealthfront vs. Acorns – Customer Support
Winner: It’s a tie.
Acorns and Wealthfront have fairly limited customer support hours. Wealthfront does claim a 24-hour turnaround time on electronic questions. However, they do not provide information on how quickly clients can expect responses via telephone.
Acorns clients can ask questions via email or phone from 6:00 AM through 5:00 PM PST on weekdays.
Wealthfront vs. Acorns – Cash Management
Winner: Wealthfront wins this one due to interest rates and FDIC insurance limits.
Wealthfront has a more traditionally appealing cash account. Their checking account offers higher interest rates than brick and mortar banks.
The current Wealthfront Cash Account interest rate is .10%. This is 5 times the national average. The rate will vary based upon market interest rates.
Wealthfront is also a good option for a savings/checking account because there are no fees and they insure your cash for up to $1 million by using multiple partner banks to maximize FDIC coverage.
While Acorns doesn’t have all of the same bells and whistles as Wealthfront, their checking account is still appealing for other reasons. Acorns Spend customers will have access to digital banking, FDIC insurance up to $250,000, and a debit card with thousands of free ATMs available nationwide.
Another benefit Acorns Spend clients have is bonus investments of up to 10% when they make purchases through their Spend account.
If you’re looking for a traditional 529 Plan, Wealthfront has you covered. In fact, it is one of the few robo-advisors to offer 529 accounts.
However, Acorns also has family plans which allow parents to create investment accounts for their children. Though Acorns’ Round-Ups may be under $1 per purchase, these contributions add up over time.
If you have trouble saving money, Acorns can be worth it. Since they use Round-Ups to maximize your everyday purchases, you can be confident that you’re actively contributing to your investment portfolio every time you swipe your card.
They also come with very low fees, ranging from $1 to a maximum of $5 per month – probably much, much less than many of us spend on coffee each week!
Wealthfront uses appropriate security and encryption methods to protect clients’ information. In this way, your account is safe: it is very hard for hackers to access your information and steal money from your portfolio. Investments are protected up to $1 million with FDIC insurance through partner banks.
Of course, there is always the risk that you can lose money when you invest; when stocks lose value, your portfolio value will drop as well.
Many of the robo-advisors offer accounts with low minimum investment amounts. We like SoFi invest because it has no minimums, no fees and financial advisors.
Stash is also a good Acorns alternative.
No, for that feature you would be better off with Wealthfront or another robo-advisor that offers tax loss harvesting.
We believe that the 0.25% management fee for Wealthfront is quite reasonable. For all of the services, especially the rebalancing, investment management, and access to ETFs and various investment styles, we believe that Wealthfront is worth the fee.
Wealthfront vs. Acorns – Which is Best? The Takeaway
If you’re a new investor looking for an easy way to make investing automatic, Acorns might be the best bet. By rounding up your purchases to the nearest dollar – or more, if you use Round-Up multipliers – you’re able to make investing a daily habit.
As far as fees go, it’s hard to beat Acorns. Students with a .edu email address will love the free account management for up to 4 years, but even the highest price-point – for Acorns Family – is only $5 per month.
On the other hand, Wealthfront is the clear victor when we consider tax-loss harvesting and investment categories. They offer bond, country-specific, industry-specific, investment style and cryptocurrency funds. If you’re seeking real estate, commodities, small cap, value, natural resources, high technology, blockchain and over one hundred ETFs.
It’s also important to realize that with micro investing, it takes a long time for your money to grow for retirement. For long term investing, it’s best to invest as much as you can, early.
Wealthfront also offers many different account types, which may better meet the needs of individual investors. All investment accounts are charged a 0.25% account management fee, which is reasonable among robo-advisors in this category.
Both Wealthfront and Acorns do have one downside: neither offers access to human financial planners. If this a dealbreaker, a robo-advisor like SoFi Invest might be a better fit.
For larger, more sophisticated investors, we like Wealthfront. The robo-advisor offers various investment strategies and low-cost single stock investing for larger accounts. The Wealthfront borrow is also good for investors seeking to invest on margin.
Sign up for Wealthfront now and get your first $5,000 managed for free:
Read the Wealthfront Review.
Read the Acorns Review.
More Comparison Articles
- SoFi Invest vs. Wealthfront
- Betterment vs. Wealthfront vs. M1 Finance
- Stash vs. Robinhood vs. Acorns
- Wealthfront vs Schwab
*Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.