Savings and investing app Acorns launched its first product tied to the springtime acquisition of U.K. neobank and financial education app GoHenry this week.
Acorns Premium Tier, a $9-a-month subscription focused on family money management, is the newest iteration of the app that claims to have thus far allowed everyday customers to invest over $16 billion since launching in 2012.
It includes access to Acorns Early, which allows family and friends to invest for a child from the day they’re born; and starting at age 6, kids get access to GoHenry and a branded debit card which allow them to build budgeting skills within whatever parental controls are set for them, including spending limits and automated allowance.
"We know that people who receive financial advice and support earlier in life are likely to have better financial outcomes. At Acorns, we are passionate about looking out for the financial well-being of the up-and-coming, and that starts with young people and families," said Noah Kerner, Acorns CEO, in a prepared statement. “Our pioneering Premium Tier is where we provide financial wellness for the whole family to unlock compound growth at every life stage. That's the key to building wealth.”
Acorns purchased GoHenry, a U.K.-based neobank, in April for an undisclosed sum.
“We believe the key to building wealth and good money habits is starting early and investing throughout all of life’s stages, and this new tier is a reflection of that belief,” Acorns’ chief investment officer and chief financial officer Seth Wunder said of the new launch to Banking Dive.
Young people aren’t saving early, Wunder explained: In a recent survey conducted by Acorns, the company found that less than 15% of adults have college funds set up for their children; and more than half of the adults haven’t set up savings accounts, IRA/Roth IRA, custodial brokerage accounts, savings bonds, or CDs for their children.
On trend
Acorns is one of several financial institutions looking to cash in on the youth market.
Fidelity said in 2021 that it would begin to issue debit cards and offer investing and savings accounts to 13- to 17-year-olds as part of its new Youth Account, and Cash App opened the door for 13- to 17-year-olds to begin using its app that same year.
Several neobanks, including Step, GreenLight, and Copper, also offer products geared toward younger people.
Greenlight began offering its kid-focused banking services to traditional financial institutions in the spring through its new Greenlight for Banks program, which allows banks and credit unions to offer the fintech’s suite of banking and education products to their customers through a co-branded landing page and app.
Beyond youth
Acorns Premium isn’t just focused on the younger generation, and will soon offer additional tools geared toward couples, parents and families looking to jointly manage money, investments and retirement savings together.
The firm’s Money Matters Report, released in 2023, found that money and mental health are intertwined: 47% of consumers feel anxious about money, and 37% of consumers believe that more money equals more happiness.
“The industry focuses on the functional side of money and tells Americans to always pay down their debt first. Yet, this can lead to a lifetime of depression. Humans need hope. So invest a little spare change in the process. That’s a different way to look at money,” Wunder said. “By introducing collaboration tools, we will continue to help as many people as possible build good money habits through all of life’s stages.”
“We think about Acorns as a financial wellness system, that lets everyday consumers grow and manage their money holistically — because all the things you do in your life from how much you spend to how much you earn to how much debt you have, or your partner has, that all comes together to define how effectively you as a person can invest,” Wunder said.
