The idea is intriguing, particularly the Roth IRA. Does anyone use this or their competitors’ apps?
The idea is intriguing, particularly the Roth IRA. Does anyone use this or their competitors’ apps?
Something slightly close, I guess?
I take my rewards cash back from a credit card and throw it in a traditional IRA through the same credit union.
The kicker is is that it's less like an IRA and more like a CD account (x% for x amount of months), BUT it's still a traditional IRA per the credit union and the IRS. So "free" money + few dollars saved on my tax return while also seeing a return on the "free" money.
I have looked into Acorns before myself. This is a summary of the knowledge I gained from other places:
Really the value of Acorns is turning spare change into investments, learning about ETFs and finding another method of saving. At the cost of the monthly fee, the round-ups and Found Money feature are good. Purchasing fractional shares is also nice but when Acorns automatically rebalances portfolios, it creates taxable events and, in some cases, wash sales.
If you do not see the value of paying extra fees for an app to round up dollar amounts for you and can set aside a $$$ amount for investment monthly instead, there is a lot of merit in just buying the Vanguard Total Market Index fund instead.
I don’t use it, but I have thought about it. I did hear Clark Howard speak positively about it.
The company I work for either partners with them or uses their service for something (or more likley they're dependent on us for something). Or we were looking into it, maybe even buying them, can't remember what it was.
In any case, I looked into it at one point and came away thinking that the usual "vanguard index fund with automatic re-investment of dividends" made more sense. I don't think I did a big analysis of it though.
They're popular with these investors but they seem to liquidate them during downturns in the market rather than holding them long term:
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