Investing can be a bit intimidating for a newcomer. It is complicated, and is often risky if you don’t have the right knoweledge. Often when it comes to investing you need to have substantial amounts of time and money to get started. Many long-term investments have low costs to entry, but require long waits beable to cash out any gains. Today, there are more modern options that will allow even the most novice investor to get into the game. The two that I am going to talk about today are Acorns, and Stash. These platforms were clearly aimed at millennials, but, anybody who needs a simple way to get into investing will benefit from them. You don’t need large sums of money either, you can start investing with as little as $5. So, let’s compare these two great options.
Both Acorns and Stash have a lot in common. These mobile first options are aimed at investors who don’t have a lot of capital, and who don’t have much time. No real skill or knowledge is required to use them; they pretty much do all the work for you
Both services allow you to sign up through their app or on their website. The process takes no more than a few minutes on either platform.
Both services over apps on both Android and iOS. The applications are well designed, with clean interfaces.
Both applications have pretty steep fees for an investor just starting out. Both companies charge $1/mo for up to $5,000, then 0.25% of account value (or $12 dollars on $5,000). For smaller accounts, this is a bit steep though (1% per $1,000).
Both services offer you the ability add to your investments with automatic recurring deposits.
Both will allow you to withdraw your funds at any time through the app. The transfer takes about 3-5 days to arrive in your account.
With Acorns, you choose a risk profile, not investment groups. The higher the risk profile, the more potential for gain (and loss). Once you are all setup, you can sit back and allow the app do work for you. With Acorns there is nearly zero management on your part. A feature that Acorns has that sets it apart is that you can link your accounts and “Round Up” purchases. The way this works is that if you make a purchase for $3.70, Acorns will automatically round that up to $4.00, putting the $.30 difference into your investment account. This is a truly great way to save without really feeling the pain. Acorns also has a web interface so you can view it on your desktop, and not just with the app.
Stash took a different approach to its offering than Acorns. With Stash, you choose funds not just based on risk, but on other criteria. These criteria include social issues, type of companies, and more. This gives you more control to invest according to your personal beliefs, so you can feel good about your investments. This method requires a bit of management on your part though, such as moving money out of funds that are underperforming. You also have to look at the fees for each fund, as this will affect your overall return. Like with Acorns, and any investment really, the more risk you take on, the more potential return. If you setup recurring deposits, they can be allocated the various funds as you desire, or left in “Stash Cash” for you to allocate manually at a later time.
|Ease of Use||Stash is a very easy platform to use, but the portfolio options make it slightly more complicated. Acorns offers you simple options and takes on most of the management of your funds itself. The point here goes to Acorns|
|Investment Options||Both applications offer simple options for investing. Stash offers more control, while maintaining simplicity, so this one has to go to them.|
|Interface||Both apps have smooth, simple, and well-designed interfaces. Honestly, this one is a draw for me.|
|Returns||In my test I invested $100 on each platform and chose high-risk investment options. I left it alone for 60 days. With Stash I pulled in about a 1.3% return (before fee), with Acorns it was about 1.1%. Point for Stash here. *Results may not be typical*|
|Fees||Both companies charge a simple $1/mo fee for smaller accounts. This is a draw|
|Features||With the Roundups Feature and a more complete Desktop application, Acorns inches ahead.|
The Verdict and Final Thoughts
Both Acorns and Stash are great platforms, and a novice investor could be comfortable on either. Acorns is easier for beginners, you can literally set it and forget it. Stash requires a bit of thought, and more interaction. While they do offer automatic investments, to maximize success users should be monitoring their investment picks for performance. The fees on both are a bit steep when you are starting out. While you can start out with only $5, you will never make enough return to cover the fees, thus you will lose money, rapidly. We would recommend making an initial deposit of no less than $100, after that you could use the minimum recurring deposit or roundups to add to your account periodically. The ease of use of these platforms is their biggest selling point; they are bringing quick and easy investing to small-time investors. Bottom line, if you want true autopilot go with Acorns, if you want a bit of control, go with Stash.