Get your investing L-plates with micro-investments - Acorns Grow

American company, Acorns Grow, has developed a tiny little giant of an investment platform, set to encourage those who don't know how to start and/or don't have enough money for larger investments or playing the stock market. 

Acorns is a smartphone or tablet app that allows you to invest your spare change. The app accesses your bank account and rounds up your purchases, adding them to your investment account. You get to decide out of five options what your risk profile should be, and then you can sit back and watch the action, fiddling around as you wish, with only the smallest stakes. 

Or, you can go big. The choice is yours, but the beauty of the system is you are able to start small, investing in the same stocks as the bigger players. 

Who runs Acorns Grow?

Acorns Grow Australia Limited is owned by Acorns Grow Inc. (USA) and Instreet Investment Limited, who is the responsible entity of the venture. Acorns Grow was set up by Walter and Jeff Cruttenden in 2012 with the help of a handful of mathematicians (including Nobel Prize winner Dr. Harry Markowitz), software engineers, and finance pros.

The result is a wonderful little app that could introduce a very broad range of people to investing - all you need is to be over 18, have a bank account, and a computer, phone or tablet with an internet connection. 


Micro-investing is new and is considered equity crowdfunding - you can invest in shares and fixed-income securities with very tiny amounts. While this has been available for some time, Acorns Grow has made it really simple and nice to look at on their mobile app. 

Costs and Fees

An Acorns Investing Account requires a minimum of just $5, and a flat fee is charged unless the balance is zero, in which case no fees are charged. If your account has less than $5,000 at the end of the month, there is also no account fee, but a maintenance fee of $1.25 is charged. If the account balance is over $5,000, there is no maintenance fee, but an account fee of 0.275 per cent p.a. is charged for that month. 

There are no switching fees, which means changing your portfolio is free. 

The fractional investing concept

You can buy a fractional slice of an exchange-traded fund (ETF units). The fund buys the ETF units and allocates the fractions to each investor using their account. The actual ETF units are held in a pooled account with the custodian, with excess fractions being kept by Acorns Australia as principal. 

The spare change idea

This idea is useful because it takes money you don't have to think about - spare change - and loads it into your investment account, so your investment grows behind your back. This means you don't have to deliberately decide to invest, save up, or put money aside. Small change adds up. 

You simply link your usual day-to-day account, and every transaction gets rounded up, which can be done manually or automatically as per your wish. A transfer takes place from your bank account to your investment account. Round-ups are automatically invested when they hit $5. 

Alternatively recurring deposits can be set up from your bank account daily, weekly, or monthly. Re-investment of any income is done automatically. 

Tax on your income

Re-investment is still considered income for tax purposes. At the end of every financial year, you will be notified of any franking credits. Withdrawals can be made at any time. 

The investments

Acorns invests into a combination of exchange-traded funds (ETFs) quoted on the ASX depending on the portfolio you chose. The investment committee selects the investments and designs the portfolios. 

Acorn states that they don't consider labour standards, or any environmental, social or ethical considerations for the investments of the fund or portfolios. This could pose a problem to some investors who wish to define their investments a little more carefully. 

This is a great starter platform for young people and inexperienced investors, who can watch their money grow and cut their teeth in an easy, inexpensive way. 

We've done a three-part series on equity crowdfunding investments (which includes micro-investing) here:

Crowdfunding Part I - An overview from a regulatory perspective

Crowdfunding Part II - Crowdfunding trends and regulatory approaches globally

Crowdfunding Part III - Australian regulations on crowdfunding … Equity crowdfunding in Australia