Install If You Want Circular Folders
iOS 9 users discovered a feature/bug that allows you to use circular folders (instead of the usual rectangular shape) without a jailbreak. All you need is a 3 x 3 pixel background to make it happen. We've tested it on iOS 9.3.5 and it still works.
Here's how to take advantage of this bug. First, pick a background from that list and save it to your Camera Roll.
Next, head to Settings > Wallpaper > Choose a New Wallpaper. From there, select Camera Roll/My Photo Stream and select the wallpaper you just saved. Apply the new wallpaper to your Home Screen. (Note: Make sure you have Reduced Translucency in your Accessibility settings turned off. Otherwise, this won't work.)
Once you make that happen, any user-created folder on your home screen will appear as a circle. Apple's stock folders will not.
If you get tired of the look, revert back to a non-3x3 pixel wallpaper.