How Does Acorns Make Money?

Acorns is a fintech platform providing services related to Robo-investing and micro-investing. The company makes money primarily through three subscription tiers: Lite – ($1/month), which gives users access to Acorns Invest, Personal ($3/month) that includes Invest plus the Later (retirement) and Spend (personal checking account) suite of products, Family ($5/month) with features from both the Lite and Personal plans with the addition of Early.

Business Model ElementAnalysisImplicationsExamples
Value PropositionAcorns’ value proposition includes: – Automated Investing: Helping users invest their spare change through round-up transactions and automated portfolio management. – Accessibility: Making investing accessible to individuals with small amounts of money. – Financial Education: Providing educational content to improve financial literacy. – Customization: Allowing users to choose their investment portfolios based on their risk tolerance. Acorns appeals to users looking for a simple and automated way to start investing and save for the future.Lowers the barrier to entry for investing by using spare change. Encourages financial literacy through educational resources. Provides customization options based on users’ risk preferences. Addresses the needs of individuals seeking a hands-off investment solution. Offers a unique value proposition in the fintech and investment space.– Automated investing through round-up transactions. – Financial education resources. – Investment portfolio customization based on risk tolerance. – Accessibility for users with limited funds.
Customer SegmentsAcorns serves the following customer segments: 1. Millennials and Young Adults: Targeting a younger demographic seeking to start investing and save money. 2. Novice Investors: Attracting individuals with limited investment experience. 3. Long-Term Savers: Serving users who want to build long-term wealth and financial security. Acorns focuses on individuals and demographics that may have been traditionally underserved by traditional financial institutions.Targets a younger audience looking to establish investment habits. Addresses the needs of novice investors seeking guidance. Appeals to users with a long-term savings and wealth-building mindset. Serves customer segments often overlooked by traditional banks.– Millennials and young adults. – Novice investors with limited experience. – Long-term savers interested in wealth-building.
Distribution StrategyAcorns’ distribution strategy includes: – Mobile Apps: Offering user-friendly mobile applications for iOS and Android devices, making investing and saving accessible on the go. – Online Marketing: Utilizing online advertising, social media, and content marketing to reach and acquire users. – Strategic Partnerships: Collaborating with financial institutions and brands to expand its user base. – Referral Program: Incentivizing users to refer friends and family to Acorns through rewards. Acorns leverages mobile apps, online marketing, partnerships, and referrals to distribute its services.Ensures accessibility and convenience through mobile apps. Reaches a broad user base through online advertising and marketing efforts. Expands its reach by partnering with established financial institutions. Encourages user growth through a referral program with incentives. Utilizes a multi-faceted distribution strategy in the fintech sector.– Mobile apps for iOS and Android devices. – Online marketing campaigns and social media. – Partnerships with financial institutions. – Referral program with rewards for users.
Revenue StreamsAcorns generates revenue through the following channels: 1. Subscription Plans: Offering tiered subscription plans with varying features and benefits. 2. Investment Fees: Charging users a small percentage of assets under management (AUM) as fees. 3. Acorns Earn: Earning referral fees by promoting financial products and services from partner companies. 4. Brand Partnerships: Collaborating with brands and receiving marketing fees for promotions and offers. Acorns diversifies its revenue streams through subscription plans, investment fees, referrals, and brand partnerships.Generates income from subscription plans with premium features. Earns fees based on assets under management (AUM). Gains referral fees through the Acorns Earn program. Collaborates with brands for marketing fees and promotions. Diversifies revenue sources within the fintech and investment industry.– Revenue from tiered subscription plans. – Fees based on assets under management (AUM). – Referral fees through Acorns Earn. – Marketing fees from brand partnerships.
Marketing StrategyAcorns’ marketing strategy involves: – Content Marketing: Creating educational content to promote financial literacy and the benefits of investing. – User Referral Program: Encouraging users to refer friends and family to Acorns with incentives. – Social Media Engagement: Utilizing social media platforms to engage with users and share investment insights. – Online Advertising: Running targeted online ad campaigns to reach potential users. Acorns focuses on education, referrals, social media, and online advertising to market its platform.Attracts users through financial education and literacy resources. Utilizes referrals to grow its user base organically. Engages with users and shares investment insights via social media. Reaches a wider audience through targeted online advertising campaigns. Implements a comprehensive marketing strategy in the fintech sector.– Educational content promoting financial literacy. – Referral program incentivizing users to refer others. – Social media engagement and investment insights. – Targeted online advertising campaigns.
Organization StructureAcorns’ organizational structure includes: – Executive Leadership: Comprising executives responsible for strategic direction and decision-making. – Technology and Development Teams: Managing the development and maintenance of Acorns’ technology platform. – Marketing and User Engagement Teams: Handling marketing campaigns, user engagement, and support. – Partnerships and Integration Teams: Collaborating with financial institutions and brands. Acorns maintains a structured organization to support its platform development, marketing, partnerships, and user engagement.Led by executive leadership for strategic guidance. Manages technology development and platform maintenance. Handles marketing, user engagement, and support functions. Collaborates with financial institutions and brand partners. Maintains an organized structure aligned with its mission in the fintech industry.– Executive leadership for strategic direction. – Technology and development teams. – Marketing and user engagement teams. – Partnerships and integration teams.



Origin story

Acorns is an American financial technology and services company founded in 2012 by Walter and James Cruttenden.

The father and son duo created Acorns to educate others on passive and incremental investing. Once a user has signed up for an account, they can select from a range of pre-built investment portfolios.

The portfolio can then be grown through micro-investing once the user connects a valid debit or credit card.

In recent years, the platform has expanded to offer checking account services and individual retirement account (IRA) products.

The company also strengthened its product offering by appointing behavioral economist Shlomo Benartzi to an Acorns committee tasked with investigating consumer spending.

As of 2020, Acorns had $3 billion in assets under management spread across 8.2 million customers.

How Acorns makes money

First and foremost, Acorns makes money via three subscription tiers:

  1. Lite ($1/month) – which gives users access to Acorns Invest, allowing them to round up their spare change and invest it into an exchange-traded fund.
  2. Personal ($3/month) – including Acorns Invest plus the Later (retirement) and Spend (personal checking account) suite of products.
  3. Family ($5/month) – encompassing features from both the Lite and Personal plans with the addition of Early. This allows parents to create an investment account for their kids and save money on capital gains tax.

Referral fees

When an Acorns member purchases at one of its 350 partners, the company earns a referral fee.

The fee is usually a small percentage of the total purchase amount. Acorns then distribute a portion of that fee to members – either as a direct deposit or re-invested on their behalf.

Management fees

For investment portfolios exceeding $5,000, Acorns charge a flat annual management fee of 0.25%.

Portfolio owners whose balance does not exceed $5,000 will not pay a management fee. However, they will be required to pay for one of the above-listed subscription plans.

Interest on cash

Acorns also make money by lending the money sitting in member accounts to other financial institutions and collecting interest.

Future growth strategies

Many Acorns accounts are only netting the company $12 annually, which is not a lot of revenue.

Recently the company has made a concerted attempt to increase revenue through growth.

The first such action is the establishment of Acorns Later, where the company hopes to secure customers early in their careers and help them build a sizeable nest egg.

Acorns also formed a strategic partnership with PayPal to expand their customer base and get access to bank account services.

Based on recent acquisition activity, some speculate that a B2B offering may also be under development. B2B services are a significant avenue for revenue generation, as evidenced by Acorns competitor Stash.

Key takeaways:

  • Acorns is an American fintech company with a focus on micro-investing and other services such as retirement planning and investment accounts to fund future tuition expenses.
  • Acorns charge a management fee for each of its three investment subscription plans. Portfolios with a value exceeding $5000 are also charged a flat fee of 0.25%.
  • Many Acorns customers with low-value investment portfolios are returning very little revenue to the company. It has sought to remedy this situation with a focus on retirement products and strategic partnerships. There is also the potential that Acorns will enter the lucrative B2B market.

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List of FinTech Business Models


Acorns is a fintech platform providing services related to Robo-investing and micro-investing. The company makes money primarily through three subscription tiers: Lite – ($1/month), which gives users access to Acorns Invest, Personal ($3/month) that includes Invest plus the Later (retirement) and Spend (personal checking account) suite of products, Family ($5/month) with features from both the Lite and Personal plans with the addition of Early.


Started as a pay-later solution integrated to merchants’ checkouts, Affirm makes money from merchants’ fees as consumers pick up the pay-later solution. Affirm also makes money through interests earned from the consumer loans, when those are repurchased from the originating bank. In 2020 Affirm made 50% of its revenues from merchants’ fees, about 37% from interests, and the remaining from virtual cards and servicing fees.


Alipay is a Chinese mobile and online payment platform created in 2004 by entrepreneur Jack Ma as the payment arm of Taobao, a major Chinese eCommerce site. Alipay, therefore, is the B2C component of Alibaba Group. Alipay makes money via escrows transaction fees, a range of value-added ancillary services, and through its Credit Pay Instalment fees.


Betterment is an American financial advisory company founded in 2008 by MBA graduate Jon Stein and lawyer Eli Broverman. Betterment makes money via investment plans, financial advice packages, betterment for advisors, betterment for businesscash reserve, and checking accounts.


Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for a variety of services. The service is free, but a 3% fee applies to credit cards. Venmo also launched a debit card in partnership with Mastercard. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.


Chime is an American neobank (internet-only bank) company, providing fee-free financial services through its mobile banking app, thus providing personal finance services free of charge while making the majority of its money via interchange fees (paid by merchants when consumers use their debit cards) and ATM fees.


Coinbase is among the most popular platforms for trading and storing crypto-assets, whose mission is “to create an open financial system for the world” by enabling customers to trade cryptocurrencies. Its platform serves both as a search and discovery engine for crypto assets. The company makes money primarily through fees earned for the transactions processed through the platform, custodial services offered, interest, and subscriptions.


Compass is a licensed American real-estate broker incorporating online real estate technology as a marketing medium. The company makes money via sales commissions (collected whenever a sale is facilitated or tenants are found for a rental property) and bridge loans (a service allowing the seller to purchase a home before the revenue from the sale of their previous home is available).


Dosh is a Fintech platform that enables automatic cash backs for consumers. Its business model connects major card providers with online and offline local businesses to develop automatic cash back programs. The company makes money by earning an affiliate commission on each eligible sale from consumers.


E-Trade is a trading platform, allowing investors to trade common and preferred stocks, exchange-traded funds (ETFs), options, bonds, mutual funds, and futures contracts, acquired by Morgan Stanley in 2020 for $13 billion. E-Trade makes money through interest income, order flow, margin interests, options, future and bonds trading, and through other fees and service charges.


Klarna is a financial technology company allowing consumers to shop with a temporary Visa card. Thus it then performs a soft credit check and pays the merchant. Klarna makes money by charging merchants. Klarna also earns a percentage of interchange fees as a commission and for interests earned on customers’ accounts.


Lemonade is an insurance tech company using behavioral economics and artificial intelligence to process claims efficiently. The company leverages technology to streamline onboarding customers while also applying a financial model to reduce conflicts of interest with customers (perhaps by donating the variable premiums to charity). The company makes money by selling its core insurance products, and via its tech platform, it tries to enhance its sales.


Monzo is an English neobank offering a mobile app and a prepaid debit card for consumers and businesses. It was one of the first app-based banks to enter the UK market, founded by Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, and Tom Blomfield in 2015. All were employees of Starling Bank, a similar neobank challenging the dominance of established financial institutions in England. The company enjoys many revenue streams: business and consumer subscriptions, interchange and overdraft fees, personal loans, and more.


NerdWallet is an online platform providing tools and tips on all matters related to personal finance. The company gained traction as a simple web application comparing credit cards. NerdWallet makes money via affiliate commissions determined according to the affiliate agreements.


Quadpay was an American fintech company founded by Adam Ezra and Brad Lindenberg in 2017. Ezra and Lindenberg witnessed the rising popularity of buy-now-pay-later service Afterpay in Australia and similar service Klarna in Europe. Quadpay collects a range of fees from both the merchant and the consumer via merchandise fees, convenience fees, late payment, and interchange fees.


Revolut an English fintech company offering banking and investment services to consumers. Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, the company initially produced a low-rate travel card. Storonsky in particular was an avid traveler who became tired of spending hundreds of pounds on currency exchange and foreign transaction fees. The Revolut app and core banking account are free to use. Instead, money is made through a combination of subscription fees, transaction fees, perks, and ancillary services.


Robinhood is an app that helps to invest in stocks, ETFs, options, and cryptocurrencies, all commission-free. Robinhood earns money by offering: Robinhood Gold, a margin trading service, which starts at $6 a month, earn interests from customer cash and stocks, and rebates from market makers and trading venues.


SoFi is an online lending platform that provides affordable education loans to students, and it expanded into financial services, including loans, credit cards, investment services, and insurance. It makes money primarily via payment processing fees and loan securitization.


Squarespace is a North American hosting and website building company. Founded in 2004 by college student Anthony Casalena as a blog hosting service, it grew to become among the most successful website building companies. The company mostly makes money via its subscription plans. It also makes money via customizations on top of its subscription plans. And in part also as transaction fees for the website where it processes the sales.


Stash is a FinTech platform offering a suite of financial tools for young investors, coupled with personalized investment advice and life insurance. The company primarily makes money via subscriptions, cashback, payment for order flows, and interest for cash sitting on members’ accounts.


Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for a variety of services. The service is free, but a 3% fee applies to credit cards. Venmo also launched a debit card in partnership with Mastercard. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.


Wealthfront is an automated Fintech investment platform providing investment, retirement, and cash management products to retail investors, mostly making money on the annual 0.25% advisory fee the company charges for assets under management. It also makes money via a line of credits and interests on the cash accounts.


Zelle is a peer-to-peer payment network that indirectly benefits the banks’ consortium that backs it. Zelle also enables users to pay businesses for goods and services, free for users. Merchants pay a 1% fee to Visa or Mastercard, who share it with the bank that issued the card.

Read Next: Fintech Business Models, IaaS, PaaS, SaaSEnterprise AI Business ModelCloud Business Models.

Read Next: Affirm Business Model, Chime Business Model, Coinbase Business Model, Klarna Business Model, Paypal Business Model, Stripe Business Model, Robinhood Business Model.

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