Should you use acorns early? a new investment account for children
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- Micro-investment firm Acorns has launched Acorns Early, an investment account for children that you can open as soon as your baby is born.
- Acorns Early is a UGMA account, a type of custodial account that offers more flexibility in how you spend the money than a 529 plan.
- The Acorns Family plan includes Acorns Early, as well as Acorns investment, retirement and chequing accounts.
- The Acorns Family plan typically costs $ 5 per month, but if your baby is born in 2020, you get a free membership until the child turns 18 and you transfer the account to their name.
- Get $ 5 Bonus Credit When You Join Acorns Today Â»
Acorns is an investment company that offers an investment account, a retirement account and a checking account that invests your currency.
Acorns has launched a fourth type of account: Acorns Early.
Acorns Early is an investment account for children. There is no option to sign up for the Acorns Early account only – to open an account you must sign up for the Acorns Family plan.
Do I need to open an Acorns Early account?
You may want to open an Acorns Early account if you:
- Already a member of Acorns, OR you wish to access Acorns investment, retirement and chequing accounts
- Qualify for a Free Acorns Family Plan Because You Had a Baby in 2020
- You want to access financial literacy content that helps you communicate with your child about money
- Prefer a UGMA account to a 529 plan
You may not want to open an Acorns Early account if you:
- Are not interested in the rest of Acorns accounts
- Prefer a 529 package to a UGMA account to save for the future of your children
- Don’t qualify for a free plan and you find a company that offers a more affordable UGMA account
Acorns Early is a UGMA account that contains financial literacy content
Acorns Early is a Uniform Gifts to Minors Act (UGMA) account. A UGMA account is a custodial account that allows you to invest in stocks, bonds and mutual funds, and you transfer the account to the child when he turns 18.
A UGMA account is similar to a 529 plan. Both are juvenile investment accounts, and you can use the funds to pay for education costs.
But there are a few key differences – a big one is that a 529 plan is used for expenses like tuition, books, and supplies, but there is more flexibility in how you can use the funds. ‘a UGMA account. Money in a UGMA account can be spent in any way that benefits the miner.
You will receive tax benefits on the first $ 2,500 of unearned income in a UGMA account, which includes interest and dividend income.
Acorns used to provide financial literacy content to members, and now it’s resources specifically designed for families opening Acorns Early accounts. Acorns wanted to meet the members where they are and create a product that would be useful for their families. âAbout a third of our customers are parents,â Acorns CEO Noah Kerner told Business Insider.
If you are already an Acorns member, you may be familiar with the Earn money program found. Spend money with an Acorns partner business, and the partner business will invest up to 10% of your purchase into your Acorns account.
Acorns has formed partnerships with family businesses for members of the Acorns family including Disney +, BuyBuyBaby, HelloFresh, and more.
If you give birth in 2020, you get a free subscription to the Acorns Family plan
Membership of the Acorns Family plan costs $ 5 per month for most families. Here’s how Acorns pricing works:
- Acorns Lite plan ($ 1 per month): Acorns Invest
- Acorns Personal Plan ($ 3 per month): Acorns Invest, Acorns Grow, Acorns Spend
- Acorns Family Plan ($ 5 per month): Acorns Invest, Acorns Grow, Acorns Spend, Acorns Early
Read the full review of Acorns Spend by Business Insider US Â»
You might not want to pay $ 5 per month. But if you’re considering opening a UGMA account with another company, find out about any fees – you could end up paying more than $ 5 a month in hidden fees. It’s also worth noting that $ 5 per month gives you access to four types of accounts, all of which help you invest.
Acorns has a special offer for families who have a baby in 2020: You have free access to the Acorns Family plan until the child is 18 and you transfer the account to their name.
You can open multiple Acorns Early accounts with an Acorns Family plan. So, if you open an account for your child born in 2020 and then open additional accounts for your other children, you still get a free membership.