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Online Investing Tools: WiseBanyan vs. Acorns

By , June 15th, 2016 | 2 Comments »

At SavingAdvice, we are often advising to start saving early and discussing smarter ways to invest. But, sometimes, you need convenient tools that are available right on your computer or mobile screen in order to get started.  This week, we are comparing two online investing tools to help you jump-start your financial portfolio.

We’ve researched WiseBanyan and Acorns, which both have the goal to help you improve your investments. But, what’s the difference between the two, and which is better?

About WiseBanyan

WiseBanyan is a free online financial advising site that began with a mission to “minimize fees as much as possible and help people start investing sooner.” Through their company, you can state what you hope to achieve financially, and their tools will help put you on your path to reaching your goals.

With no minimum balance in your account required to start, WiseBanyan offers a variety of services related to helping you make wise investment decisions. In addition to providing online financial advisement, the company helps to manage your portfolio and builds your financial plan as well. In fact, you receive your own personal financial adviser at WiseBanyan. Your investments and options are all tailored to you and focus on what you want rather than your current financial status and your wallet. The individuals behind the company want to change the industry by taking away the minimum investment amounts and additional fees that often come with financial advisory fees.  Furthermore, the money you provide is used to invest in exchange-trade funds (EFTs), which are managed and monitored for you. This can help lead to a diverse financial portfolio.

But, is WiseBanyan too good to be true? Is it actually free?

WiseBanyan is a SEC registered company, meaning it is registered under the Securities Act of 1933, which helps to prevent fraud and misrepresentation in the sale of securities. But, as with everything, WiseBanyan is not meant for everyone. If you do have taxable accounts as an investor, this company may not be a good choice for you. And, technically, it is not completely free. While you do not need to maintain or have a minimum balance, you do need to put in a minimum of $1 to get started due to the cleaning firm they use, Apex Clearing Corporation.

About Acorns

Acorns is a bit different. With Acorns, you connect the cards and accounts you use in everyday life to their app. The goal of the platform is to take your extra cash and grow it through investments. In an attempt to make investing effortless for you, it takes “spare change” from everyday purchases, rounding up your transactions to the next dollar and investing the difference into a diversified portfolio. So, for instance, let’s say you give $5 cash for a $4.95 purchase. Acorns takes that .05 difference and puts it into what is known as your investable funds. However, the amount is not actually removed from your bank account or credit card until you reach a $5 threshold.

You don’t have to wait for that $5 threshold to get money into your cash pool though; you can set up your account to have funds transferred daily, weekly or monthly as well. And, like WiseBanyan, your Acorns portfolio is managed by expert financial advisers. Additionally, it also does not have minimum account requirements nor does it require you to have a lot of money to get started, just like WiseBanyan.

This is another tool that is not meant for everyone either. It is best and mostly recommended for those who have a hard time saving and individuals in their mid-20’s and younger.

So, what are the fees?

The cost for the Acorns app is $1 a month for accounts $5,000 or less. Those who have accounts above the $5,000 mark pay 0.25% of the account value. Conversely, those 24 years or younger or who are students do not have to pay any fees. Another note to mention is that accounts through Acorns are taxable (although, losses may be tax deductible), and the company does not offer tax-loss harvesting, which is the practice of selling securities that experience a loss or lose value.

The main downside is that you are limited to investing in only five diversified portfolios. The team at Acorns is supposedly looking into being able to provide a broader range of investment options in the future. The upside is that they do recommend and continuously monitor the best investment options for you based on your time, salary and financial goals while allowing you to change your portfolio at any time.

The world of finance is rapidly reaching the modern world and increasing in technology. So, which of these is better? One does not seem to be better than the other as neither is meant for everyone. These two online investing tools both have their pros and cons, and whether they are right for you depends on your current situation and account types. However, with no minimum account balance, free portfolio management and very little start-up fees in both companies, these two options may be worth looking into to kick-start your financial portfolio.

What tools do you currently use to improve your investments?

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  • Alexa Mason says:

    In my opinion, Wisebanyan is better

  • Jamie Housler says:

    I’ve used Wisebanyan and it’s definitely the better one. Breaks down everythign into different goals, a lot more options and offers IRA accounts. Don’t have to pay every month like with Acorns. I also have taxable accounts there and it’s great.


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