Acorns Early Review: The Easiest Way To Invest In Your Kid's Future

acorns early review

Acorns Early Review

Suppose you want to save for your child's future. For investors over 18 years of age, you can easily open an investment account at any investment brokerage. But if you have a child who is under 18, your choices are pretty limited.

As a result, many parents and guardians often turn to a college savings plan. And while it has it's advantages, it's not your only option. 

Today we are going over Acorns Early, the easiest way to start investing for the kids in your life. 

If you haven't already heard of the Acorns platform, Acorns is often seen as one of the top Robo advisors. But beyond that, it is an entire financial wellness system. Acorns isn't just an investment account anymore; it's now an all-in-one digital checking, investing, retirement account, and much more. 

Check out our Acorns app review below and see how it compares to today's top investing apps here.

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What is Acorns Early?

Early is a key piece in the Acorns financial ecosystem. The account can be a significant feature for new and existing Acorns users who either have kids or plan to have kids down the road. As investors, the earlier you start, the more time your money has to grow.

Unlike a 529 savings plan, which can only be used for education, Acorns investment account for kids can be used for anything that benefits the child. This is because Early is not a 529 plan, but rather, a custodial account.

Early is designed to help you start investing for a child from their birth all the way to when they reach adulthood. Young investors have a long investing timeline, giving them the best chance to maximize potential long-term gains.

On average, the stock market has historically provided an 8% annual rate of return. By simply investing $5 a day into a child's custodial account from birth, that child could have more than $80,000 by the time they reach 18 years-of-age.

Imagine the impact of having $60,000 set aside when your child turns 18. Think of the expenses that could cover. Think of the savings that could save you. That is the power of starting early. That is the potential of changing your child's future. 

With an Early account, you can help a child reach their goals while you also achieve yours. Easily set up your entire Acorns Family account and have access to your personal checking, investment, retirement, and child's custodial account, all from a single dashboard.



Why Should I Open An Early Account?

Among the features we'll be discussing in this breakdown, the Early account offers several benefits:

  • The ability to open a new Early account in under 3 minutes
  • The ability to add multiple kids at no additional cost
  • The option to automate Recurring Investments and contributions
  • Access to exclusive family-themed bonus investments
  • Access to a suite of family financial advice
  • Potential tax advantages and savings
  • More control and flexibility when using the funds

But first, let's break down what separates the Early account from a traditional college savings plan.


What is a 529 Savings plan?

Traditional college savings accounts for young people under 18 are known as 529 savings plans. A 529 account is a tax-advantaged savings plan designed to encourage saving toward a child's future education costs.

So, a 529 can be an excellent option for saving toward your child's future college funds and other educational expenses. But, when the child becomes 18, it doesn't give them much control in allocating those funds.

An alternative to the 529 savings plan is a UTMA / UGMA custodial account. Custodial accounts offer a lot more flexibility. For more control over using the funds to save and invest, the Early account could be a solution for you.


What is a UTMA UGMA Account?

Acorns custodial accounts are officially known as UTMA / UGMA accounts. UTMA stands for Uniform Transfer to Minors Act, and UGMA stands for Universal Gifts to Minors Act. Both the UTMA and UGMA accounts allow you to transfer financial assets to a minor without creating a trust. 



These custodial accounts allow parents to save money and invest for their child. At the same time, they can maintain full control until the child is an adult. 


529 Savings Plan vs. the UTMA UGMA Account?

Both 529 savings plans and UTMA / UGMA accounts can offer their own set of advantages. While custodial accounts can provide more flexibility, some parents may find a 529 program provides significant tax benefits. 

Unlike custodial accounts, you contribute to 529 plans with after-tax dollars. You can also contribute up to $15,000 each year ($30,000 for married couples) before engaging a gift tax.

Another difference between the account types is how they can potentially impact college financial aid eligibility. When college students apply for financial aid, both UGMA and UTMA accounts are typically considered the child's asset.

The more assets the child has, the lower amount of college financial aid they could be eligible for. Unlike custodial accounts, 529 savings plans are usually counted as the parent's asset. 

However, the most significant difference between the account types all comes down to flexibility. UTMA / UGMA accounts give both you and the child much greater flexibility in how you can use the money. By holding funds in a standard 529 savings plan, you can only use them for specific educational expenses.

These costs can include qualified purchases such as tuition, college books and supplies, college room and board, and student loans. Using 529 funds for any expenses other than those can result in significant penalties.

UTMA / UGMA accounts (such as the Early account) are not limited to qualified expenses. You can spend those funds on anything that benefits the child. Purchases can include a car, travel expenses, clothes for school, and health insurance.


529 Savings Plan vs. Acorns Early?

Again, the Acorns investment account for kids is a UTMA / UGMA custodial account. Compared to a 529 savings plan, it can offer much greater control and freedom with how you can use the money. 

Suppose you only want to use your child's savings plan for educational expenses. In that case, either account type can be an ideal option. However, if you don't want to be restricted, then the Early account can give you the most flexibility.


How Does Acorns Early Work?

You can easily create your new Early account in just a few minutes. Simply open your Acorns account, sign up for the family tier, and add your child under your name. With the Acorns Family plan, you can add multiple kids at no additional cost.

There's also no need to spend extra time researching investments and monitoring your child's account. Acorns' portfolios are an area where the Robo advisor shines. 



Their pre-built and diversified portfolios make it easy to "set it and forget it" with their Recurring Investments feature.

Acorns Recurring Investments allows you to set up recurring contributions to your child's investment account on a daily, weekly, or monthly basis. These automatic contributions can start as low as $5 and can grow with you over time. 

As a custodial account, the Early portfolio is held in the minor's name but controlled by a parent or other relative until the child reaches the "age of transfer" in your state. 

Even better, the Early account seamlessly integrates with Acorns' other investment accounts, allowing you to maximize your ability to save and invest.

Much like their core investment account, you can start investing in your child's custodial account with just $5 on the Acorns app.


Acorns Pricing

Acorns offers three pricing tiers:

  • Acorns Lite: $1 per month
  • Acorns Personal: $3 per month
  • Acorns Family: $5 per month



If you are interested in an Acorns Early account for your child, the Acorns Family plan is your best option. Below is a breakdown of what each tier offers.

Acorns Lite

Acorns Lite is their starter plan that offers you everything you need to start investing in the stock market. With Acorns Lite, you can invest your spare change, earn bonus investments, and have access to a robust cashback portal.

  • Acorns Invest  (personal investing account)
  • Acorns Found Money  (their cashback portal)

Acorns Personal

Acorns Personal is your all-in-one investment, retirement, and mobile-checking solution. With this account, you also have access to earning bonus investments through their Found Money cashback portal.

  • Acorns Invest  (personal investing account)
  • Acorns Found Money  (their cashback portal)
  • Acorns Later  (retirement account)
  • Acorns Spend  (mobile-checking account)



Acorns Family

Acorns Family provides everything you need for your entire financial wellness system. With Acorns Family, you get access to everything that you get in Acorns Personal plus access to Acorns Early, their investment account for kids.

  • Acorns Invest  (personal investing account)
  • Acorns Found Money  (their cashback portal)
  • Acorns Later  (retirement account)
  • Acorns Spend  (mobile-checking account)
  • Acorns Early  (child custodial account)


 You can see my full Acorns app review in the video below:


Early Pros

  • There are no limitations or penalties in using the money when the child becomes an adult.
  • If you are a member of the Acorns Family plan, you can add multiple kids to your account at no additional cost.
  • While you are setting yourself up for success in your financial future, you can also set your child up for success in their financial future.
  • You gain access to a growing collection of family financial advice in the form of videos and articles from experts.


Early Cons

  • When it comes to your child applying for college financial aid, a UGMA / UTMA custodial account is typically reported as the child's asset. According to FAFSA, this reduces their eligibility for financial assistance by 20% of the asset value. 
  • The alternative 529 savings plan is reported as a parent asset. While it also reduces financial aid eligibility, it reduces it by a much lower percentage.
  • Custodial accounts don't provide parent's the same tax advantages as a 529 savings plan. Whereas custodial accounts offer the most flexibility and freedom, 529 programs provide more income tax breaks.


Who is Acorns Early Recommended For?

The Early account can be an ideal solution for investors who want to help their children reach their goals while also achieving theirs. Suppose you want to invest in your child's future without the restrictions of a traditional college savings plan. In that case, Early can be an ideal custodial account for you.



The Acorns custodial account could also be ideal for investors who have multiple children because you can add additional kids without an added expense.

Also, as members of the Acorns financial wellness system, you may find it convenient to hold your child's investment account in the same platform as your investment, retirement, and mobile-checking account. 

To learn more about Acorns Later, Acorns Spend, and all the other member features Acorns has to offer, check out our full Acorns Review here.


Is Acorns Early Worth It?

Early can be worth it for Acorns members who have children or plan to have children in the future. It provides an easy way to set your children up for financial success from birth to adulthood.

If you are a member of Acorns' other investment products, adding an Early account is a seamless process.

Since Early investors have such a long investing timeline, they have a fantastic opportunity to maximize the power of compound interest.



Sign Up Offer

Acorns is providing Everyday Investing readers a select $10 sign up bonus when you join Acorns and invest your first $5.


In Summary

Acorns has become an all-in-one financial wellness system. Their Early account is another essential piece of the puzzle; following in the footsteps of their Invest, Spend, Later, and Found Money accounts.

With Acorns Early, you don't just save for your child's future; you invest in it.

To start your Acorns account and begin taking advantage of their "set it and forget it" portfolios, you can sign up here.

To learn more about all the other features Acorns has to offer, check out our full Acorns Review here.



I get it, I was there too. Let me help walk you through the process of getting started investing in the stock market and putting your portfolio in the best position to succeed! 👇



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