Acorns Early Review - Investing For Your Kids Future - YouTube

Today we're going over Acorns Early,

the investment account for your kids, what is it how does it work?

And is it right for you?

For more investing guides, courses and reviews, visit InvestingApps.com

Hey, welcome back, guys.

This is Erik of EverydayInvesting.com, where I'm all about helping everyday

investors take control of their investing and their finances.

Today, we are going over Acorns Early,

the easiest way to start investing in your child's future.

If you haven't already heard of Acorns and their platform,

it's often seen as one of the top robo-advisors for investing.

But beyond that, Acorns is actually much more.

It's actually an entire ecosystem now,

because it's not just an investment account anymore.

It's now also an all in one digital

checking, investing, retirement, even a rewards account.

So if after this video you want to learn

more about all the different features Acorns has to offer,

I'll be sure to link my full Acorns video review down below in the video

description, along with the timestamps for this video as well.

And of course, if you would like to try out Acorns for yourself,

I've got a special $10 sign-up bonus for new Acorns users,

which I'll be sure to put down below in the video description as well.

With that being said, let's now jump straight into the review.

So what exactly is Acorns Early?

Well, I like to think of Early as another key piece in the Acorns ecosystem because

the account can be a significant feature for both new and existing Acorns users

who either have kids or are planning to have kids down the road.

One interesting statistic I saw is that if you invest just $5 a day

for a child from birth, considering a seven percent average market

return, which is extremely conservative, that account could have more than $60,000

dollars by the time the child turns 18 years old.

So imagine having $60,000 dollars set aside when the child turns 18.

Think of the expenses that could cover.

Think of the savings that could save you and the child.

That's the power of starting early

and that's the potential of changing your child's future.

Now, with an Early account, it's pretty convenient because while

you're investing for your future, you can also invest for theirs.

Now, one of the cool things I like about

the Early account is that it allows you to have access all on a single dashboard

to your child's custodial account, your investment account,

your retirement account, and even your mobile checking account.

But you may be wondering, why should I even open an Acorns Early account?

Well, among the features that we'll be discussing in this video,

the Acorns Early account actually offers several benefits for Acorns users.

So this includes the ability to open a new Early account in just a couple of minutes.

Also the ability to add multiple kids to your Early account at no additional cost.

I also like how Acorns Early also allows

you to set up recurring investments straight into the custodial account so you

can always be funding that investment account with Acorns Early.

You also get access to exclusive family themed bonus investments.

In case you're familiar with their Found Money cashback portal,

you're going to get exclusive bonus investments in that portal.

Now, with Acorns Early,

you have much more control and flexibility with how the funds are used.

And that is by far the biggest pro with the Acorns early account.

But first, let's break down what separates

the Early account from a more traditional college savings plan.

And one of the most popular college saving

accounts for young people under 18 is known as the 529 savings plan.

A 529 account is a tax-advantaged savings

plan designed to encourage saving for a child's future education costs.

So a 529 is definitely a great option

for saving for your child's future college funds and other educational expenses.

But when the child becomes 18, it doesn't really give them much control

and how they can actually allocate those funds.

Now, an alternative to the 529 savings plan is what's called a custodial account,

and custodial accounts offer a lot more flexibility.

If you don't want to limit how the funds

in your child's savings plan can be used to save and invest,

then a custodial account such as Acorns early might be a solution for you.

The interesting thing with custodial accounts is they allow you to transfer

financial assets to a minor without needing to create a trust.

Essentially, these custodial accounts

allow parents to save money and invest for the child, while at the same time,

maintain full control over the account until the child is an adult.

So then what exactly is the difference

between custodial accounts and the more traditional 529 savings plan?

Well, both 529 savings plans and custodial

accounts offer their own set of advantages.

While custodial accounts can offer more flexibility and control over the money,

some may find that a 529 plan offers more significant tax benefits.

For instance, contributions to 529 plans are made with after tax dollars, whereas.

Custodial accounts are not another difference between the account types is

how they can potentially impact college financial aid eligibility.

For instance, when college students apply

for financial aid, custodial accounts are often reported as an asset of the child,

whereas on the other hand, 529 savings plans on college applications

are normally reported as an asset of the parent.

And of course, when reporting assets

on financial aid applications, who owns the asset can impact how much

financial aid a student is actually eligible for.

However, guys, the most significant

difference between the account types is that custodial accounts give you much more

control and flexibility in how the money can be used.

Funds held in your standard 529 savings

plan must be used for specifically defined educational expenses.

This can include qualified expenses such as tuition, college books and supplies,

college room and board and even student loans.

But using your 529 funds for expenses,

anything other than those can result in significant penalties.

Custodial accounts, on the other hand,

such as Acorns early are not limited to qualified expenses.

You're free to use the funds

and that account for anything that benefits the child.

This can include expenses such as a car

for them, travel expenses, clothes for school and even health insurance.

Again, the Acorns investment account for kids is a custodial account,

and compared to a 529 savings plan, custodial accounts can offer much greater

control and freedom of how the money can be used.

If you are strictly set on using your child's savings plan for educational

expenses, then either account type can be an ideal option.

However, if you want the ability to use

the money in that account for any and all expenses that benefit the child,

then the early account can give you more flexibility.

So let's now discuss how does Acorns Early actually work?

Well, for starters, you can easily get started creating your

Acorns Early account in just a few minutes.

Simply open your Acorns app,

sign up for the family's here and add your child under your name.

Plus, with the Acorns family plan,

you also can add multiple kids at no additional cost.

Now, if you're worried about having

to choose investments and monitor your child's account, this is an area where

the robo-advisor really does shine because not only does Acorns offer pre-built

and diversified portfolios, but they also make it easy to set it

and forget it with their Acorns early portfolios, with recurring investments.

Again, Acorns recurring investments allow

you to set up recurring contributions straight to your child's investment

account on a daily, weekly or even a monthly basis.

And these automatic contributions can

start as low as five dollars and grow with you over time.

Now, Acorns Early is held in the name

of the minor, but it's controlled by you, the parent or other relative,

until the child reaches the age of transfer in your state.

Even better, the Early account seamlessly integrates with all of Acorns other

investment accounts, allowing you to fully maximize your ability to save and invest.

Like I said, all from a single app,

much like their core investment account, you can start investing in your child's

custodial account with as little as five dollars.

So it very much follows the same

principle, guys, as the regular Acorns investment account.

So let's now break down Acorns pricing

and the pricing for Acorns Early. Acorns offers three pricing tiers.

You have Acorns Lite,

which is $1 per month, Acorns Personal $3 per month

and Acorns Family at $5 per month.

Now, if you are interested in Acorns Early

for your child, the Acorns family plan is the tier you're going to want to look at,

because with the Acorns family plan, you actually get access to their entire

financial ecosystem because you get access to Acorns Invest.

That's their core investment account.

You also get access to Acorns Found Money, which is their cashback portal.

Of course, you get access to Acorns Later.

That is their retirement account.

And lastly, you get access to Acorns

Spend, which is their mobile checking account.

Oh, and of course,

you get access to Acorns Early, which is their child custodial account.

So what are some of the pros of Acorns Early?

Well, firstly, there are no restrictions

or penalties in how the money can be used when the child becomes an adult.

Secondly is,

if you are a member of the Acorns family plan, you can actually add multiple kids

to your account, all at no additional cost.

And thirdly, is that while you are setting

yourself up for success in your financial future with Acorns, you can also set your

child up for success in their financial future.

And fourthly, with Acorns Early and their

family tier, you also get access to a growing

collection of family financial advice in the form of.

Videos and articles from financial experts

now, what are some of the cons with Acorns Early?

Well, firstly, I would say that when it

comes to your child applying to get college financial aid,

a custodial account is typically reported as an asset of the child.

And like I said earlier, this can negatively impact how much

financial aid the college student is eligible for at that time.

Secondly, the alternative 529 savings plan is usually reported as a parent asset.

And while it also reduces financial aid eligibility, it's usually by a much lower

percentage than if the asset is in the name of the child.

And lastly, custodial accounts don't provide parents the same tax advantages as

a 529 savings plan, whereas custodial accounts offer the most

flexibility and freedom, 529 plans offer more income tax breaks.

Look, when it comes down to it,

Acorns has done an excellent job in becoming an all in one financial

ecosystem from Acorns invest to Acorns later to Acorns Spend to Acorns Found Money,

their Early account really is just another key piece of the puzzle.

After all, with Acorns Early,

you don't just save for your kid's future, you actually invest in it.

Now, again, if you're new to Acorns and you'd like to try it out for yourself.

I do have a special affiliate link down

below in the video description where you can receive a special $10 sign-up

bonus when you join Acorns and make your first investment.

So let me know down below in the comments what you think of Acorns Early or if you

have any questions on the Acorns app as well.

And of course, if you want to learn more

about Acorns and all the features that the app has to offer,

definitely feel free to check out my full Acorns review right over here.

And lastly, if you're new to investing

and you need some help in getting started, definitely feel free to grab any

of my free guides or courses at InvestingApps.com

as always, guys, thanks again for watching and I will catch you all in the next one.