MoneyLion Review
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Ease of Use
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Cost
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Performance
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Customization
Summary
If you’re someone who’s into investing, but also want to do more, then you may have come across MoneyLion. MoneyLion claims to do it all – banking, credit, investing – but are they as legit as they say? Before you jump in, read our review of MoneyLion and decide for yourself if they have what you need.
About MoneyLion
MoneyLion is an all-in-one banking, credit, and investing platform. Founded in 2013, the platform has been used by over two million customers. MoneyLion targets not so much people who want to invest, as people who need an integrated savings and investment platform.
How MoneyLion Works
MoneyLion is a one-stop-shop for managing your money. With MoneyLion, you get a checking account, a debit card, and a traditional investment account all at the same time. That’s great if you need a banking provider, but can be a turn-off if all you want is an investment account.
MoneyLion offers five basic portfolios to choose from for your investments, which vary in how your money is balanced across asset classes. The Conservative portfolio invests primarily in bond ETFs, while the Aggressive portfolio invests primarily in stock ETFs. In addition to the five balanced portfolios, you can also choose from a stock-only portfolio (which invests in stock ETFs) or a bond-only portfolio (which invests in bond ETFs).
MoneyLion’s investment options are very limited – the company only invests in a total of seven ETFs from Vanguard and iShares. The only thing that changes between portfolio offerings is how your money is allocated between these seven ETFs. (The bond-only portfolio uses a different set of six bond ETFs.)
Account Requirements
MoneyLion does not have any account minimums to open a checking or investing account and you can start investing with any amount of money. The service is only available to US residents at this time.
MoneyLion Pricing and Fees
A basic MoneyLion membership is free – the only fees you have to pay on your investments are commissions and exchange fees, which are less than 0.2% for all of the ETFs that MoneyLion invest in. That makes this one of the cheapest automated investing services available and comparable to investing directly through a brokerage.
MoneyLion does have a Plus membership available for $29 per month. This service automatically withdraws $50 from your account for investment. The main advantage of the Plus membership is to get access to a low-cost $500 loan to help build credit, so if your only goal is auto-investing than you do not need a paid account.
Platform and Tools
MoneyLion is designed first and foremost around its mobile app, although a desktop interface is also available. The main advantage to the MoneyLion platform is that your checking and investment accounts are automatically linked, so it’s easy to move money between the two and to set up recurring investments.
Your options within the investment area of the MoneyLion platform are relatively limited. The dashboard shows you in broad strokes how your investment has performed over time. You can opt to change your portfolio to one of the other preset options at any time, but there is no further customization allowed.
MoneyLion Performance
MoneyLion’s investment performance varies widely between portfolios, since different portfolios have a reciprocally small or large amount of exposure to the stock and bond markets. The stock ETFs that MoneyLion uses track the S&P500 and offer investments in international and emerging markets, while the bond ETFs focus on municipal and government bonds. All of the ETFs are reputable Vanguard and iShares ETFs, so you can expect performance to be comparable to what you would get with similarly diversified portfolios from other automated investment platforms.
Key Differentiators
MoneyLion offers two major advantages for investors. The first is that when you sign up for a MoneyLion account, you get a checking account, a debit card, and an investing account all at the same time with a single login. That’s perfect for those who are just starting to manage their money and need an entire financial ecosystem. However, if you already have a banking service, opening another checking account may be less than appealing even if it is free.
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The second advantage to MoneyLion is that investing is free, minus commissions and ETF exchange fees. That means investing through MoneyLion costs the same as investing through brokerages. There are not many automated investing platforms that can claim as much – even Betterment and Wealthfront charge 0.25% annual management fees on top of ETF exchange fees.
Of course, MoneyLion is able to keep its investing service free by offering almost no customization or investing tools. You are not able to plan goals with different portfolios with MoneyLion, nor are you able to invest in anything other than the seven ETFs on offer.
Is MoneyLion Trustworthy?
MoneyLion has been well-reviewed by users and has grown rapidly in popularity since its founding in 2013. Checking accounts are FDIC insured, although investment accounts are not backed by the SIPC. You can withdraw money from your investment account at any time and transfer your money to another bank at will with MoneyLion.
Who is MoneyLion Best For?
MoneyLion is best for investors who want an extremely simple and low-cost investing solution, and who either need or don’t mind getting a checking account along the way. MoneyLion’s portfolios may not offer a lot of diversity in the ETFs they invest in, but the ETFs being offered are highly reputable and affordable iShares and Vanguard ETFs. Aggressive investors have the option to go all-in on the stock market, and it’s easy to change your portfolio risk preferences over time as you get older.
Still, it’s important to underscore the lack of customization within MoneyLion. You cannot invest in anything beyond the seven ETFs that the service currently offers, or tweak the balance of those ETFs within the predesigned portfolios. MoneyLion may be most suitable as a long-term, stable investment alongside another service, automated or not, that allows investors a greater degree of customization for a higher fee.
Pros
- Free automated investing (less commissions and ETF exchange fees)
- Seven ETF-based portfolios for different risk preferences
- Portfolios include low-cost, reputable Vanguard and iShares ETFs
- No account opening or investment minimums
- Change your preset portfolio between the seven on offer at any time
Cons
- No ability to create goals funds with their own portfolios
- Almost no customization beyond choosing one of the seven portfolio options
