Micro investing is a relatively new concept these days. It is gaining popularity because you don’t need lots of money to start investing. With micro investing, you can buy stocks using the fractional share investing model. Acorns investment and Stash investment are two of the best micro investing platforms for fractional share investing. In this article, we will look at Acorns vs Stash and conclude which one we recommend.
The case for micro investing
- What is micro investing? Micro investing is an investment model that allows people to regularly invest small amounts of money.
- Amazon is one of the most popular companies in the United States. At some point, its stock price rose by more than 455%, making Jeff Bezos the richest American.
- Unfortunately, it is almost impossible for most Americans to invest in Amazon because its stock price, at the time of writing, is over $3,000. This is where micro investing platforms such as Acorns and Stash come in. These companies allow ordinary people to invest in companies like Amazon using the fractional share investing model.
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What is Acorns Micro Investing?
Acorns is a fintech was started in 2012 with a simple model. With Acorns app, Android and iOs, people invest their spare change in the financial market. For example, if you go to a department store and buy a product for $16, the company will round-up the change to $20 and then invest the $4. As you make purchases, the company continues to round up this change and invest it in the market. The Acorns investing idea became popular and since then, the company has raised millions of dollars from investors like Comcast Ventures, PayPal, Steelpoint Capital, and The Rise Fund. The company is now used by more than 8 million customers.
What is Stash Micro Investing?
Stash is a fintech startup that was started in 2015 to help people invest in the financial market. The initial goal was to simplify investing and make it more affordable to most people. Since then, the company has expanded its services to include banking, investment, retirement, and custodial services. On banking, the company offers all banking services like borrowing and saving. On retirement, the company offers Roth IRA and traditional IRA. On Custodial, the company allows you to invest for your kid’s future. The company has raised more than $189 million from Union Square Ventures, Goodwater Capital, Valar ventures, and Breyer Capital. Like Acorns, Stash also offers a spare change investment product known as Round-Ups. Stash has more than $550 million in assets under management (AUM). Stash has a valuation of more than $350 million.
Fees
Acorns Fees
Is Acorns free? No, it is not. However, it is one of the most affordable investment company in the country. The company’s pricing has been simplified as just 1,2, and 3. Acorns Core charges $1 per month. With this, you get automated investing, smart portfolios, a subscription to Grow magazine, and discounts from top stores. Acorns Core + Acorns Later charges $2 per month. With this, you get all the products in core, IRA, and Assisted rollovers. Finally, the Acorns Core + Acorns Later + Acorns Spend has all the services in the previous packages and a FDIC-insured checking account. The chart below simplifies the pricing of Acorns.
Stash Fees
As with Acorns, Stash offers three packages, with pricing that ranges between $1 to $9. The Beginner account charges just $1 per month and offers services like a personal investment account, debit account access, and earn stock-back service. The Growth accounts charges $3 per month and offers all products in Beginner and tax benefits for retirement investing, and free financial education. Stash+ that go for $9 offers all the products in beginner and growth in addition to an investing account for two kids, metal debit card, and monthly market insights. The Stash pricing is simplified in the chart below.
Acorns vs Stash: Investment Products
Acorns Investments
Acorns offers investment products based on your risk appetite. To help with this, the company has developed four types of investment products. These are:
- Conservative. This account invests 40% of your money in short-term government bonds, 40% in ultra-short term corporate bonds, and 20% in ultra-short term government bonds.
- Moderately conservative. This account invests 24% in large company stocks, 4% in small company stocks, 4% in real estate stocks, 30% in government bonds, 30% in corporate bonds, and 8% in international large company stocks.
- Moderate. This portfolio invests 29% of funds in large company stocks, 10% in small company stocks, 3% in emerging market stocks, 6% in real estate stocks, 20% in government bonds, 20% in corporate bonds, and 12% in international large company stocks.
- Moderately aggressive. This portfolio invests 38% in large company stocks, 14% in small caps, 4% in emerging market stocks, 8% in real estate stocks, 10% in government stocks, 10% in corporate bonds, and 16% in international large cap stocks.
- Aggressive. This product invests 40% in large company stocks, 20% in small cap stocks, 10% in emerging market stocks, 10% in real estate stocks, and 20% in international large cap stocks.
Stash Investments
Stash investment options include:
- Personal investment. In this Stash investment account, the company gives you a platform where you can invest in companies like Amazon, 3M, and Google.
- Auto-Stash. This product allows you to automate your trading. It has three products: set schedule, which lets you set a certain period to invest, round-ups, to invest your change, and smart stash that gives you analytics to guide you to invest.
Our customers are typically starting with around $20 to $40, and they’re turning on our feature called Autostash, which helps them invest either weekly or biweekly. Brandon Krieg
Acorns vs. Stash: Taxes
Acorns Taxes
Acorns automatically reinvests your earnings for you, but you may still owe taxes on your dividends. Your 1099 form will note any dividends you receive in the 1099-DIV section if you earned more than $10 in dividends in the previous year.
Stash Taxes
All your Stash investments are taxed like any other investment. You need to pay taxes on your earnings from dividends, income interest and capital gains.
Stash vs. Acorns: Supported Countries
Acorns Supported Countries
Does Acorns work internationally? Unfortunately, it does not at the moment. The platform is only available to US citizens or legal residents who currently reside in the United States and over 18 years old. The only exception is active Armed Services personnel that maintain US addresses and are temporarily overseas.
Stash Supported Countries
Does Stash work internationally? Stash is only open to US citizens and legal residents with green card or certain types of valid visas. However, Stash lets you buy fractional shares of stocks of some foreign companies. You can also purchase ETFs from parts of the world.
Which is Better Acorns or Stash?
In this article, we have compared between two micro investing apps, Stash and Acorns. Frankly, each of these startups are offering quality products that we never thought would exist a few years ago. They are both robo advisors, meaning they automatically select investments for you. We believe that the cost advantage of Acorns is better than that of Stash. We also believe that its model of investing in spare change is unique and revolutionary. Stash on the other hand offers more products that are actually better and cost effective.
Acorns allows you to invest your money in pre-built portfolios of ETFs. This is a good option for beginners who want to start investing but don’t want to worry about choosing their own investments. Acorns also offers a retirement account and a checking account. Stash gives you more control over your investments. You can choose individual stocks and ETFs to invest in. This is a good option for advanced investors who want more control over their investment strategy. Stash also offers a retirement account and a debit card that gives you cashback on your investments.
Therefore, we recommend that you use both as a means of diversifying your income. They are both among the best brokerages for fractional shares in the US.
More Information
- Acorns customer service: (855) 739-2859, support@acorns.com
- Stash customer service: (800) 205-5164, support@stash.com
Acorns vs Stash FAQs
Is Stash an online bank?
Stash has partnered with Green Dot bank to offer online banking service with one app. You can open a checking account and get a Stash Visa debit card.
Is Acorns an online bank?
Acorns offers an online checking account that comes with a debit card. There is no minimum deposit requirement to open Acorns online bank account.
Does Acorns have cryptocurrrency?
Yes, Acorns allocates up to 5% of your investments towards a Bitcoin-linked ETF.
Does Stash have cryptocurrency?
Yes, you can choose to buy cryptocurrency in your own Personal Portfolio, or you can have Stash invest in cryptocurrency for you through their robo-advisor service.
Is Acorns worth it?
Yes. With Acorns, the continual process of investing money is automatic and mindless. Getting set up with an Acorns account ensures that young people are contributing to their investment account frequently and often, enabling them to reap the benefits of compound interest from a young age. While investing small amounts regularly may seem insignificant, it’s proven to add up over time.
Will I get a 1099 from Acorns?
The 1099-R form lists any money you took out of your Acorns Later account last year. Acorns will email a link to your 1099 form to the email address in your Acorns profile. You can also access it using Acorns web app or mobile browser, even if you've closed your Acorns account.
Will I get a 1099 from Stash?
You will receive a form 1099 from Stash form showing all transactions within your Stash account within the previous calendar year.
