What Is Beanstox?
Beanstox is a robo-advisor that invests in ETFs for people who have never started investing before and want to build a retirement account long term. It costs $5/month and lets you create a set-and-forget investment strategy by automatically pulling funds from your bank account.
It launched in 2018 and was co-founded by Kevin O'Leary, the famous Shark Tank investor and entrepreneur. They are targeting people who want "Seriously Simple Investing."
In this post, we'll look at Beanstox fees, features, pros, cons, and most importantly... is it worth it?
How Does It Work?
Beanstox is similar to Acorns, Wealthfront or other robo-advisors in the fact that you can create an automated investing strategy that runs fully on autopilot. You can create recurring deposits weekly, bi-weekly, monthly and choose which type of portfolio you'd like to invest in.
What Can You Do On Beanstox?
1. Open An Account With As Little As $100
U.S. residents can open a Beanstox account and connect to over 10,000 banks and credit unions.
2. Build A Set-And-Forget Investment Strategy
The main concept is to set up automatic recurring deposits so you can create a disciplined investing strategy. Beanstox also does automatic rebalancing and automatic dividend reinvestments so it can run in the background on autopilot. It designed to be easy for beginners, even if they have never invested before.
3. Choose A Portfolio
Beanstox lets you select various ETF portfolios based on your risk tolerance and goals. However, the customization is quite limited, especially compared to buying ETFs yourself with an online broker.
Who Can Use It?
Beanstox says it's available to all U.S. residents that are at least 18 years old with a U.S. bank account
- Must be a U.S. resident
- Must have a U.S. bank account
- Must be at least 18 years old
+0.25% annual fee for account balances over $25,000
+ETF management fees (this does not go to Beanstox)
Official Fees Page
Beanstox is a $5 per month subscription and does not charge deposit fees, commissions, or additional trading fees. Regardless of how much you invest, the fee will be fixed at $5/month. So if we convert that to a percentage, the fee looks something like this:
- Investing $100/month = 5% fee
- $250/month = 2% fee
- $500/month = 1% fee
- $1000/month = 0.5% fee
- $5000/month = 0.1% fee
This does not include the ETF fees and 0.25% fee if your account balance is over $25k. Overall, Beanstox will be pretty expensive if you're investing under $500/month since you have to pay both the subscription and ETF fees. If you want to save $60/year, you can just buy the ETFs yourself on a traditional stock brokerage.
If you'll be investing, let's say $1,000/month, the $5 fee will equate to 0.50% which is more reasonable. But, it's still pretty high compared to just buying the ETFs yourself. However, Beanstox does offer the convenience of automatic purchases, auto-rebalancing, and dividend reinvestment which might be worth it for some people.
Now, let's sum it up. With all the fintech apps out there like Acorns, Robinhood, Webull and dozens of others, is Beanstox really worth it?
The Bottom Line
Beanstox has created an easy way to automate your wealth. However, with so many fintech apps on the market, it looks like there are better choices available.
At $5/month, Beanstox is relatively expensive compared to other apps on the market, especially if you're investing under $500/month. And many online reviews complain about the customer support and bugginess of the app. It's probably better to choose a more popular robo-advisor or just buy ETFs for free with an online broker.
Pros & Cons
What Does Reddit Think?
Beanstox has limited reviews and comments on Reddit but here is what we found. In this thread, one Redditor said:
"Stay away from Beanstox. They use deceptive practices to exaggerate gains or hide losses. (Monthly fees must come from an external credit card; you are required to make monthly deposits.) You don't have many options for investing. They provide very little performance data. App is buggy."
On the positive side, another Redditor said:
"Beanstox, it was made for the common man to be capable of easily investing in the stock market with returns. One of the Shark Tank hosts made it. There's lots of other apps like it out there, most of them free."
What Are The Online Reviews?
Right now, Beanstox has 3.9 stars on the App Store (350+ reviews) and 3.8 stars on Google Play (100+ reviews). After digging through the reviews, it was pretty hard to find positive comments. Here is a summary of what they said:
- UI is buggy and not good
- Customer support is extremely slow
- They force you to put money in on sign-up
- They expect more from a Kevin O'Leary endorsement
Garrett said, "All show and no "go". They obviously spent tons of $ rebuilding the UI, but the app is still non-functioning. I haven't been able to make a deposit or withdrawal in months. Save yourself the headache and invest for free with an online broker."
Another user said, "I had high expectations for this investing app but the real world experience is horrible and scary. The app is riddled with bugs and now I have $21k stranded with no assurance that it will be returned to me. Customer service is almost non-existent with just a general email with no phone number to call. Unacceptable in this day and age for a money app that holds peoples’ hard earned money and expected more with a Kevin O’Leary endorsement."