You’re familiar with PayPal. Heck, there’s a good chance you’ve used it if you’ve ever bought anything online. After all, the huge digital-payments platform has nearly 220 million active users, according to the Wall Street Journal
With PayPal, you can send or receive money in 25 different currencies. You can buy a blender on eBay, a DVD on Amazon or homemade soap on Etsy.
Now PayPal is adding a new service.
It wants to help you invest.
It’s teaming up with Acorns, the popular smartphone app that invests your spare change for you. Once you connect the app to a debit or credit card, it rounds up your purchases to the nearest dollar and funnels your digital change into an investment account.
Beginning in early 2018, PayPal is adding the ability to put money from your PayPal account into Acorns’ low-cost, automatic investing portfolios. You’ll be able to set up an Acorns account directly from PayPal.
When you log on to your PayPal account, you’ll be able to go to your Acorns account right from PayPal’s home screen. You’ll be able to transfer funds, monitor your investments, make withdrawals and manage your account from PayPal’s website and mobile app.
PayPal Invests in Robo-Investing
Why is PayPal doing this?
It wants to help its users save more easily and create long-term financial plans. “This gives you an even easier way to save and invest money to lead healthier financial lives,” the company said when it announced the move.
Also, it doesn’t hurt that PayPal has invested tens of millions of dollars into Acorns and partly owns it now.
Acorns, which has 2.4 million users, is one of a series of competing robo-investing apps — like Stash, Clink or Betterment — that are geared toward millennials who want a simple savings and investment account they can operate from their phones.
In fact, CNBC calls Acorns “the new millennial investing strategy.”
You can have Acorns automatically round up all your purchases and invest the digital change, or you can manually round up only certain kinds of transactions. Because the money comes out in increments of less than $1, you’re less likely to feel an impact in your bank account.
For an account with a balance below $5,000, Acorns’ monthly fee is $1 plus 0.5%.
Where does Acorns invest your money?
You’ll answer a few questions on the app to create a financial profile. Acorns uses that to build your investment portfolio, which ranges from a “conservative” mix of government bonds to an “aggressive” mix of stocks.
Mike Brassfield ([email protected]) is a senior writer at Codetic. He needs to store up more acorns for winter.