Saving for the Future: A Comparison of Acorns Early Invest and UNest for Your Grandchild

• When it comes to securing a financial future for your grandchild, the options for custodial accounts have expanded to embrace the digital age. Gone are the days when traditional savings bonds were the only choice. T
• oday, platforms like Acorns Early Invest (the evolution of what was once EarlyBird Crypto) and UNest offer mobile-first solutions for parents and families, simplifying the process of saving and investing for a child's financial well-being. A key differentiating factor for many is their approach to cryptocurrency exposure.

Acorns Early Invest (formerly EarlyBird Crypto)

• Acorns Early Invest is designed for parents, grandparents, and other family members seeking an automated investment solution for a child's future, often emphasizing ease of use and micro-investing capabilities.

Key Features:

• Custodial Account (UGMA/UTMA): Provides legally compliant custodial accounts, where an adult manages assets for the minor beneficiary until they reach the age of majority.
• Automated Investing: Leverages robo-advisor technology to invest in diversified portfolios of low-cost Exchange Traded Funds (ETFs) tailored to various risk tolerances.
• Bitcoin Exposure: Offers access to Bitcoin-linked ETFs (e.g., BITO). It's crucial to understand that Acorns does not provide direct ownership of Bitcoin; rather, you gain exposure to Bitcoin's price movements through these regulated funds.
• Round-Ups®: A popular feature that automatically invests spare change from linked everyday purchases.
• Gifting Feature: Facilitates easy contributions from friends and other family members.
• Digital Memory Preservation: (A feature inherited from EarlyBird) Allows families to add photos, videos, and personalized messages alongside financial contributions, creating a unique digital time capsule.
• Full Acorns Ecosystem: For those with an Acorns Gold subscription, it integrates seamlessly with other Acorns products like Invest (personal investing), Later (retirement), and Checking (banking), offering a holistic financial management suite.
• Educational Content: Provides resources to foster financial literacy.
• SIPC-Insured: Investment accounts are insured by SIPC (Securities Investor Protection Corporation), though this does not protect against market losses.

Fees:

• Requires an Acorns subscription. For Acorns Gold (which includes Acorns Early Invest), the fee is typically $12 per month. This annual cost can represent a significant percentage for smaller account balances.

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UNest

UNest positions itself as a straightforward and flexible mobile-first solution for saving and investing for a child's future, offering both traditional ETF portfolios and a direct cryptocurrency investment option.

Key Features:

• Custodial Account (UGMA/UTMA): Specializes in UTMA/UGMA accounts, providing flexibility for the funds to be used for any expense that benefits the child (unlike 529 plans, which are restricted to educational expenses).

• Diversified Portfolios: Offers a selection of portfolios composed of low-cost Vanguard ETFs. These often include age-based options, socially responsible investment choices, and customizable aggressive/conservative strategies.

• Direct Cryptocurrency Investing (UNest Crypto): This is a key differentiator. UNest Crypto allows parents to directly add crypto to their child's UNest account. They offer a curated selection of popular cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), with contributions starting from as little as $5 per month. Important Note: UNest Crypto accounts are managed as individual brokerage accounts in the parent's name for tax and legal purposes, while still being managed within the UNest app on behalf of the child.

• Gifting Feature: Provides an easy mechanism for friends and family to contribute to the child's account.

• Rewards Program: Allows users to earn additional savings when shopping with UNest's brand partners.

• Additional Benefits: Certain plan tiers may include access to features like life insurance and family online identity protection.

• Tax-Advantaged Growth: Earnings within a UNest UTMA/UGMA account may grow in a tax-advantaged manner up to a certain threshold, subject to "kiddie tax" rules.

• SIPC-Insured: Investment accounts are SIPC-insured.

Fees:

• Monthly Subscription Fee: UNest charges a flat monthly fee.

  • Starter Plan: Approximately $4.99 per month (or ~$39.99 per year) for a single account.
  • Plus Plan: Approximately $9.99 per month (or ~$79.99 per year) for managing up to five children's accounts and access to additional benefits.

• Crypto Fees: UNest states they do not charge fees or commissions for individual cryptocurrency purchases. However, their partner Bakkt applies a spread or markup on buy and sell orders to cover transaction costs.

Conclusion & Recommendation for Your Grandchild

Both Acorns Early Invest and UNest provide valuable and convenient ways to establish a custodial investment account for your grandchild. The optimal choice for you will largely depend on your preference for direct cryptocurrency ownership versus exposure through ETFs.

• Choose UNest if:

  • You specifically wish to buy and hold direct Bitcoin, Ethereum, or Solana within an app that facilitates custodial account management for your grandchild.
  • Their fee structure aligns better with your budget for a single child or multiple children, without the need for a broader integrated financial ecosystem.
  • You are interested in their additional benefits like shopping rewards or integrated insurance/identity protection.

• Choose Acorns Early Invest if:

  • You are comfortable gaining Bitcoin exposure through an ETF rather than direct ownership, potentially preferring the perceived simplicity in tax and regulatory compliance of an ETF.
  • You are already an Acorns user or plan to utilize other Acorns products (Invest, Later, Checking) and desire a fully integrated financial platform.
  • You appreciate the Round-Ups feature for automated micro-investing.
  • The unique digital memory feature appeals to you for adding sentimental value to financial contributions.

Regardless of your choice, both platforms empower you to build a financial foundation for your grandchild's future. It is always prudent to consult with a financial advisor and a tax professional to discuss the specific implications for your individual financial situation and jurisdiction.