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Betterment Investing
Account Minimum
$0 to open, $10 to start investing ($100,000 for premium plan)
Fees
0.25%/year for digital plan; 0.40%/ year for premium plan; 1%/year for crypto portfolios
- No minimum for standard investing account
- Goal-based planning, tax-loss harvesting, charitable giving, and socially responsible investing available
- Access to certified financial planners
- Mobile app with external account syncing options
- You’ll have to pay to consult a human advisor, unless you have the premium plan
Product Details
- Promotion: None at this time.
- App store rating: 4.7 iOS/4.5 Android
- Consider it if: You want access to robo-advice with multiple service levels.
About Betterment
Betterment Investing is an automated investing platform that offers one of the best robo-advisors. It also provides personalized and self-managing investment portfolios. Betterment mainly offers mainly offers stock ETFs, bond ETFs, and cryptocurrencies.
Overall, Betterment offers an impressive crypto selection. While it gives you access to complete portfolios with assets like bitcoin, ether, litecoin, and more, Wealthfront only lets you allocate up to 10% of your portfolio in its crypto trusts.
The platform additionally offers a vast range of portfolio options, including cryptocurrencies and the mobile version is one of the best socially responsible investing apps for automated investing. But you’ll want to look elsewhere if you’re in search of less expensive ongoing financial advisor guidance.
Is Betterment Right For You?
Betterment best suits hands-off investors who want to make use of individual or joint accounts, IRAs, trust accounts, and cash reserve or checking accounts.
Betterment: Overall Rating
Betterment Pros and Cons
Is Betterment Trustworthy?
The Better Business Bureau gives Betterment an F rating. Ratings range from A+ to F and reflect the bureau’s opinion of how well a company interacts with its clients. The BBB says Betterment’s rating stems from the fact that it has received a high number of complaints, including three that are unresolved.
Bureau ratings don’t guarantee a company will be reliable or perform well. However, they take into account several other factors, including type of business, time in business, customer complaint history, licensing and government actions, and advertising issues.
April 18, 2023, the SEC charged Betterment LLC for failing to provide account holders using tax-loss harvesting services with notice of contract changes. Betterment also allegedly failed to maintain certain required books and records. Betterment has agreed to pay a $9 million penalty to settle the case.
Ways to Invest With Betterment
Automated portfolio management
Betterment uses computer algorithms to build and manage personalized portfolios. The platform also offers an FDIC-insured checking account, a cash reserve account, IRAs, and a 401(k). Plus, its pricing plans are simple to follow. It offers two options:
- Betterment digital: This plan doesn’t have any account minimum requirements, but it holds a 0.25% annual fee. It includes features like tax-loss harvesting, asset location, portfolio rebalancing, and dividend reinvesting. Plus, to maintain a healthy level of risk, Betterment automatically adjusts your portfolio allocation as you get closer to meeting your goals. This level also offers a range of portfolio options, but it doesn’t include complimentary advisor access.
- Betterment premium: You’ll need at least $100,000 for the premium account, but you’ll get access to all of the features the digital plan offers in addition to unlimited one-on-one CFP guidance. Its CFPs also offer advice on other investments you hold outside of Betterment.
You can additionally invest toward specific goals at Betterment. It currently offers six: retirement (saving), retirement (income), safety net, major purchase, general investing, and cash goals.
Cryptocurrencies
Wealthfront was previously one of the only automated platforms that offered crypto exposure (thanks to its crypto trust investments). However, Betterment now offers automated cryptocurrency investing for a separate annual fee of 1%. This fee is quite competitive, given that some crypto exchanges charge spread fees of up to 1% per transaction.
The platform gives you access to four different crypto portfolios:
- Universe: This portfolio aims to give you exposure to a diversified range of crypto assets. Bitcoin, ethereum, and bitcoin cash make up most of its holdings, but it also contains dogecoin and 21 other investments.
- Sustainable: The sustainable portfolio is best for those looking to make a postive impact with their investing. It focuses on cryptocurrencies that aim to reduce carbon emissions, and Betterment specifically targets investments that use less energy to validate blockchain transactions. Ethereum, solana, and chainlink are among its holdings.
- Metaverse: With this option, you’ll be investing in cryptocurrencies that work to advance digital commerce and virtual experiences. Its allocation consists of roughly 30% bitcoin. Another 14% of the portfolio contains ethereum, and 7.85% is allocated toward axie infinity. The remainder of the portfolio is allocated across 20 different assets.
- Decentralized Finance: This portfolio focuses on cryptocurrencies that conduct transactions and services without the assistance of banks and other centralized institutions. It’s primarily made up of bitcoin, and the portfolio contains 23 cryptocurrencies in total.
You can invest in both a crypto portfolio and a regular ETF portfolio if you want, but you’ll have to account for both advisory fees. And when it comes to security, Betterment implements two-factor authentication. Plus, it takes several other measures to keep your accounts safe. These include identity verification, transaction review, automatic logout, account ownership verification, system outage protection, and more.
Portfolio types
Betterment offers several portfolio options. The first, its Core portfolio, focuses on long-term investing by allocating your money across a global selection of stock and bond ETFs. Its Innovative technology portfolio targets companies with a lot of potential for growth. These include semiconductors, blockchain businesses, clean energy companies, and more.
Its three socially responsible portfolios — Broad Impact, Climate Impact, and Social Impact — are ideal for those who want to make a positive difference with their investments. Finally, its Goldman Sachs Smart Beta portfolio aims for companies that will outperform the market, and its BlackRock Target Income portfolio works to protect your assets against loss by investing primarily in bond ETFs.
Investment types
As for Betterment’s investment types, it mainly offers stock ETFs, bond ETFs, and cryptocurrencies. Many automated platforms offer ETFs, so its investment selection aligns with most competitors. However, some automated platforms offer alternatives. For instance, Wealthfront has ETFs, index funds, and crypto trusts.
Betterment Cash Reserve Account
If you like Betterment’s brokerage accounts, you may want to check out Betterment’s cash reserve account. The cash reserve account isn’t an investing account, but instead a high-yield savings account with a 5.25% annual percentage yield (APY).
Betterment is primarily an investing platform, but the convenience of having your checking account or cash reserve account on the same platform can be a huge perk. The Betterment Cash Reserve account requires a minimum deposit.
Betterment — Frequently Asked Questions (FAQs)
Betterment’s most basic account, the digital plan, has a $0 account minimum, but you’ll need at least $100,000 to get started with its premium account. One of the things the premium account offers that the digital plan doesn’t is unlimited one-on-one CFP guidance.
The answer to this question largely depends on what you’re looking for in an investment platform. If you’re looking for access to low fees, cryptocurrencies, human advisors, goal-focused strategies, and features like tax-loss harvesting, then Betterment may be a good choice for you.
Betterment is a legitimate platform that has been in business since 2011. The robo-advisor is registered with the US Securities and Exchange Commission (SEC), and it’s a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC). It has a C- rating from the BBB due to a high number of customer complaints, but it doesn’t have any recent scandals.
How Betterment Compares
Betterment vs. Wealthfront
Betterment and Wealthfront are two of the oldest platforms in the robo-advisor space. Both offer automated portfolio management, with access to perks like cash accounts, tax-loss harvesting, socially responsible investing, and more.
Betterment offers financial advisor guidance, but Wealthfront doesn’t (although it does allow its users to contact specialists with questions). Betterment also has a lower account minimum requirement than Wealthfront. You don’t need anything to get started with the Betterment digital plan. Wealthfront, however, has a $500 minimum.
Wealthfront is a better option for users who want access to a wider range of investment choices. Plus, it’s great for those who’d like to automate custodial accounts like 529 plans. Wealthfront also offers DIY investing for stocks — you’ll just need to open a separate stock investment account, which only requires $1 to get started.
Betterment vs. Vanguard
Betterment and Vanguard both have automated investing, but Vanguard is the stronger choice for more types of investors. With Vanguard, you get access to both self-directed accounts and automated accounts. But you’ll be limited to automated investing at Betterment, so it’s not a great choice for those who want to trade on their on.
When it comes to robo-advice, you’d pay less with Vanguard’s basic automated account, Vanguard Digital Advisor, than you would at Betterment. The Betterment digital plan has a 0.25% fee, but Vanguard Digital Advisor only charges 0.20%.
Why You Should Trust Us: How We Reviewed Betterment
We examined Betterment using Personal Finance Insider’s rating methodology for investing platforms to compare and examine account types, pricing, investment options, and overall customer experience when reviewing investing platforms. Platforms are given a rating between 0 and 5.
Investing platforms generally offer multiple assets, trading tools, fees, and other resources. Some investing platforms are better for more advanced investors or active investors, while others may better suit beginner investors and passive investors. Betterment was evaluated with a focus on how it performed in each category.
