Welcome to my in-depth comparison of Betterment and Acorns, two popular financial services that can help you grow your wealth through automated saving and investing. If you’re wondering which platform is better suited for your investment goals, you’ve come to the right place. In this article, I will provide a detailed analysis of the performance, fees, and features of both Betterment and Acorns, empowering you to make an informed decision that aligns with your financial aspirations.
Key Takeaways:
- Compare Betterment and Acorns to choose the best investment platform for you.
- Analyze the performance, fees, and features of both services.
- Betterment offers automated investing, goal tracking, various accounts, and cashback rewards.
- Acorns features round-ups, sustainable portfolios, learning resources, and special discounts for online shopping.
- Consider your investment options and objectives before making a decision.
Overview of Betterment and Acorns
Betterment and Acorns are two popular financial services that provide automated investing and saving options. While they share similarities, it’s important to understand their key differences when deciding which platform aligns best with your financial goals.
Comparing Betterment and Acorns
Betterment, established in 2008, boasts an impressive $36 billion in assets under management and serves over 775,000 customers. Acorns, on the other hand, entered the market in 2014 and now has over 8.2 million customers and $4.7 billion in assets under management.
The Powerhouses Behind Betterment and Acorns
Let’s delve further into the details of each platform to gain a better understanding of what they offer and how they differentiate themselves in the market.
| Platform | Year Launched | Assets Under Management | Number of Customers |
|---|---|---|---|
| Betterment | 2008 | $36 billion | 775,000+ |
| Acorns | 2014 | $4.7 billion | 8.2 million+ |
Features of Betterment
Betterment offers a range of features that make it a standout choice for investors looking to take control of their financial future. Let’s take a closer look at what Betterment has to offer:
Automated Investing
One of the key features of Betterment is its automated investing service. This innovative tool uses advanced algorithms to build and manage a diversified portfolio tailored to your individual goals and risk tolerance. By automating the investment process, Betterment helps you save time and take advantage of market opportunities.
Tax Loss Harvesting
Betterment vs Acorns features
Another unique feature of Betterment is tax loss harvesting, which can help you minimize your tax liability and potentially increase your after-tax returns. This strategy involves selling investments that have experienced losses to offset any gains and reduce your taxable income. Betterment’s tax loss harvesting feature automates this process, saving you the hassle of manually tracking and executing tax-lowering transactions.
Goal Tracking
With Betterment’s goal tracking feature, you can easily set and monitor your financial goals. Whether you’re saving for retirement, a down payment on a house, or your child’s education, Betterment provides a user-friendly interface to track your progress and ensure you stay on target.
All-in-One Financial Dashboard
Betterment offers an all-in-one financial dashboard that gives you a comprehensive view of your finances. You can link all your financial accounts, including bank accounts, credit cards, and even external investment accounts, to get a holistic picture of your net worth and financial health.
Cashback Rewards with the Betterment Visa Debit Card
With the Betterment Visa Debit Card, you can earn cashback rewards on eligible purchases. This feature allows you to make the most of your everyday spending while putting money back into your investment portfolio.
Various Account Types
When it comes to account options, Betterment has you covered. The platform offers various account types including individual retirement accounts (IRAs), 401(k)s, brokerage accounts, and a high-yield cash reserve. This wide range of options allows you to tailor your investments to your specific needs and goals.
Features of Acorns
Acorns offers a range of features designed to simplify the investing process and help users achieve their financial goals. Let’s explore some of the key features and benefits of Acorns:
- Round-ups: Acorns’ round-up feature automatically rounds up your everyday purchases to the nearest dollar and invests the spare change. This allows you to effortlessly grow your portfolio over time.
- Automated Investing: With Acorns, you can set up recurring investments, so you can contribute to your investment account regularly. This helps you build wealth gradually and take advantage of dollar-cost averaging.
- Smart Deposit: Acorns’ Smart Deposit feature allows you to automatically deposit a designated amount of money into your investment account whenever you receive a paycheck. It’s a convenient way to consistently invest without thinking about it.
- Learning Resources: Acorns provides educational resources that help users improve their financial literacy. From articles on investing to video tutorials, Acorns offers valuable insights to help you make informed investment decisions.
- Sustainable Portfolios (ESG Investing): Acorns offers sustainable portfolios that prioritize environmental, social, and governance (ESG) factors. If you’re passionate about investing in socially responsible companies, Acorns provides an opportunity to align your investments with your values.
- Acorns Earn: Acorns Earn is a feature that enables you to earn special discounts when shopping with select Acorns partners. It’s a unique way to save money and potentially grow your investments through everyday purchases.
In addition to these features, Acorns offers various account types to cater to different investment needs:
- Individual Retirement Accounts (IRAs)
- Individual Taxable Investment Accounts
- Custodial Accounts
- Checking Account
Acorns’ diverse range of features and account options make it a comprehensive investment platform suitable for both beginner investors and those looking to invest with a sustainable focus.
Account Types Offered by Betterment
When it comes to investment options, Betterment provides a diverse range of account types to cater to different financial goals and needs. Whether you’re planning for retirement, saving for a rainy day, or looking to invest jointly with a partner, Betterment has you covered. Here are the account types offered by Betterment:
- Individual Retirement Accounts (IRAs): Choose between traditional, Roth, and SEP IRAs to save for retirement with tax advantages.
- 401(k) Accounts: Seamlessly roll over your old 401(k) into a Betterment account for simplified management.
- Taxable Investment Accounts: Invest in a wide range of ETFs and individual stocks with taxable investment accounts.
- Joint Accounts: Collaboratively invest and manage funds with a partner or family member.
- Checking Accounts: Enjoy easy access to your funds for everyday expenses with Betterment’s checking account.
- Cash Reserve Accounts: Put your cash to work with Betterment’s no-fee high-yield cash reserve.
In addition to these account types, Betterment offers features such as tax coordination for retirement accounts, which optimizes your investment strategy across multiple accounts to minimize taxes. This thoughtful approach to tax efficiency ensures that you’re maximizing your returns and minimizing your tax liabilities. With Betterment, you have the flexibility to choose the account type that aligns with your financial goals and enjoy the benefits of their sophisticated investment platform.
| Account Types | Features |
|---|---|
| IRAs | Traditional, Roth, SEP IRAs |
| 401(k) Accounts | Seamless rollover |
| Taxable Investment Accounts | Diverse range of investment options |
| Joint Accounts | Collaborative investing |
| Checking Accounts | Easy access to funds |
| Cash Reserve Accounts | No-fee high-yield cash reserve |
With Betterment’s comprehensive range of account types, you have the flexibility to tailor your investments to your specific financial objectives. Whether you’re planning for retirement, building wealth, or managing joint finances, Betterment offers the tools and features to help you achieve your goals.
Account Types Offered by Acorns
When it comes to investment options, Acorns provides a range of account types to cater to different financial goals and preferences. Here are the account types offered by Acorns:
- IRAs: Acorns allows you to open an Individual Retirement Account (IRA), providing a tax-advantaged option for long-term savings and investment.
- Individual taxable investment accounts: With Acorns, you can create individual taxable investment accounts to invest your funds outside of retirement savings.
- Custodial accounts: Acorns offers custodial accounts, which are designed for minors and managed by a custodian until the child reaches adulthood.
- Checking account: Acorns also provides a checking account option, allowing you to manage your day-to-day expenses and earn rewards through their Spend feature.
Besides these traditional investment accounts, Acorns also offers sustainable portfolios for investors who are interested in environmentally and socially responsible investing. These portfolios allocate funds to companies and assets that prioritize sustainability and positive impact. By investing in these portfolios, you can align your investments with your values while potentially earning returns.
Here’s an image that depicts the account types offered by Acorns:
By offering a diverse range of account types, Acorns aims to provide flexibility and options for investors of all types. Whether you’re saving for retirement, investing for the future, or looking for sustainable investing opportunities, Acorns has something for you.
Pricing and Fees of Betterment
When it comes to choosing an investment platform, understanding the pricing and fees is crucial for making an informed decision. Let’s take a closer look at the pricing and fees of Betterment to see how it compares to its competitors.
Betterment offers a simple and transparent fee structure. The platform charges a fee of $4 per month or 0.25% of your invested assets on an annual basis. This fee covers all the services provided by Betterment, including portfolio management, personalized investment advice, and access to their suite of investment options.
For investors with a larger portfolio, Betterment also offers a premium service called Betterment Premium. With this option, investors with a minimum balance of $100,000 can take advantage of additional features and benefits. However, the fee for Betterment Premium is slightly higher at 0.40% of the invested assets on an annual basis.
It’s important to note that the fees charged by Betterment are competitive within the industry. While the monthly fee of $4 may seem small, it can add up over time. If you’re looking to minimize fees, it might be worth considering other options or comparing the fees of different investment platforms.
Comparison of Betterment and Acorns Fees
Now, let’s compare the fees of Betterment and Acorns to see how they stack up against each other:
| Investment Platform | Monthly Fee | Annual Fee | Premium Service |
|---|---|---|---|
| Betterment | $4 | 0.25% | $100,000 minimum balance, 0.40% fee |
| Acorns | $3 (individual accounts) $5 (family accounts) |
N/A | N/A |
As you can see, Betterment charges a monthly fee of $4, while Acorns charges a slightly lower monthly fee of $3 for individual accounts and $5 for family accounts. However, it’s important to note that Acorns does not charge an annual fee. Instead, Acorns uses a subscription-based model where the monthly fee covers all their available account types and services.
When comparing the fees of Betterment and Acorns, it’s important to consider your investment strategy and the services that are most important to you. While Betterment may have a slightly higher fee, it offers a wider range of investment options and personalized financial advice. On the other hand, Acorns is more beginner-friendly and focuses on helping users save and invest small amounts of money.
Ultimately, the choice between Betterment and Acorns will depend on your individual needs, investment goals, and preferences. It’s important to carefully consider the pricing and fees, along with the features and services, to determine which investment platform is the best fit for you.
Pricing and Fees of Acorns
When comparing Betterment and Acorns, it’s important to consider the fees associated with each platform. In this section, I’ll delve into the pricing and fees of Acorns to provide you with a clear understanding of the costs involved.
Acorns operates on a subscription-based model, offering two pricing tiers: individual accounts and family accounts. For individual accounts, Acorns charges a monthly fee of $3. If you’re interested in a family account, the monthly fee is $5. These fees cover all the available account types and services offered by Acorns.
Acorns’ flat-rate subscription fee structure is simple and transparent, making it easier for investors to understand and plan for their expenses. Whether you choose the individual or family account option, you’ll have access to a wide range of services and account types without any additional charges.
Now that we’ve explored the pricing and fees of Acorns, let’s move on to the next section to compare the robo-advisor services offered by Betterment and Acorns.
Robo Advisor Services of Betterment
Betterment is a comprehensive robo-advisor that offers a range of investing services designed to help you achieve your financial goals. With Betterment, you can take advantage of automated investing, personalized financial advice from human advisors, and a user-friendly platform for tracking your goals and managing your portfolio.
One of the key advantages of Betterment is its automated investing feature. This allows you to easily set up recurring contributions to your investment portfolio, which are then automatically invested in a diversified portfolio of ETFs (exchange-traded funds). This takes the guesswork out of investing and ensures that your money is working for you.
Another standout feature of Betterment is its personalized financial advice. While the platform is automated, it also provides access to human advisors who can offer tailored guidance based on your unique financial situation and goals. Whether you have questions about retirement planning, tax strategies, or general investment advice, the team of experts at Betterment is there to assist you.
The benefits of Betterment’s robo-advisor services:
- Automated investing to simplify your investment process
- Personalized financial advice from human advisors
- User-friendly platform for tracking goals and managing your portfolio
Whether you’re a beginner investor or have more experience, Betterment offers a robust set of tools and features to help you navigate the world of investing and make informed decisions. With its automated investing, personalized advice, and user-friendly platform, Betterment empowers you to take control of your financial future.
| Betterment | Acorns |
|---|---|
| Automated Investing | Yes |
| Personalized Financial Advice | No |
| User-friendly Platform | Yes |
Robo Advisor Services of Acorns
When considering the betterment vs acorns comparison, Acorns stands out as a beginner-friendly robo-advisor that provides a simple and accessible investment platform. Focused on helping users save and invest small amounts of money, Acorns utilizes innovative features like round-ups and automated investments.
Although Acorns doesn’t offer personalized financial advice, its user-friendly interface makes investing effortless for beginners. With just a few taps, users can set up their accounts and start growing their financial portfolios. Acorns also provides educational resources to empower investors with knowledge about saving and investing.
Acorns believes in making every dollar count, and their round-up feature allows users to invest their spare change from everyday purchases. By automatically rounding up transaction amounts to the nearest dollar and investing the difference, users can gradually build wealth without even noticing it. This feature makes it easy for individuals to start investing, regardless of their financial expertise or income level.
“Acorns focuses on simplicity and accessibility, making it an ideal choice for those who want a hands-off approach to saving and investing.”
Table 10.1: Comparison of Robo Advisor Services
| Robo Advisor | Services | Benefits |
|---|---|---|
| Betterment | Automated investing Tax loss harvesting Personalized financial advice |
Wide range of investment options User-friendly platform Comprehensive financial planning |
| Acorns | Saving and automated investing Round-ups feature User-friendly interface |
Beginner-friendly Simple and accessible Education resources |
Sign-Up Process of Betterment and Acorns
When it comes to getting started with Betterment and Acorns, both platforms offer a hassle-free sign-up process that can be completed in just a few steps. Let me walk you through the process of joining these popular investment services.
Betterment
Signing up for Betterment is quick and easy. Here’s what you need to do:
- Visit the Betterment website or download the mobile app.
- Click on the “Get Started” or “Sign Up” button.
- Provide your basic personal information, including your name, email address, and password.
- Link your bank account by entering your bank details or using the account login credentials for a secure connection.
- Answer a few questions about your financial goals and risk tolerance to help Betterment determine the best investment strategy for you.
- Review and agree to the terms and conditions, privacy policy, and advisory agreement.
- Submit your application and wait for approval.
Once approved, you can start investing with Betterment within minutes.
Acorns
Getting started with Acorns is equally straightforward. Follow these steps to sign up:
- Visit the Acorns website or download the mobile app.
- Click on the “Join Now” or “Sign Up” button.
- Enter your email address, create a password, and set up a security question.
- Link your bank account by providing your bank details or using the account login credentials for a secure connection.
- Answer a few questions to learn about your financial goals and risk tolerance. This information will help Acorns recommend a suitable investment portfolio for you.
- Review and agree to the terms and conditions and advisory agreement.
- Submit your application and wait for approval.
After your application is approved, you can start investing with Acorns right away.
Now that you know how easy it is to sign up for Betterment and Acorns, you can take the first step towards achieving your financial goals. Whether you choose Betterment for its personalized advice and wider range of investment options or Acorns for its simplicity and easy saving features, both platforms offer convenient and user-friendly sign-up processes.
Customer Support of Betterment and Acorns
When it comes to customer support, both Betterment and Acorns strive to assist their users in a timely and efficient manner. Let’s take a closer look at the customer support services offered by each platform:
| Betterment | Acorns |
|---|---|
|
|
Betterment goes the extra mile by offering direct one-on-one access to financial advisors, allowing users to seek personalized advice and guidance. In addition, they provide support via phone, email, and chat, ensuring multiple channels for user convenience.
On the other hand, Acorns focuses on providing phone support, 24/7 live chat, and email tickets. While they do not offer direct access to financial advisors like Betterment, they strive to assist their customers promptly and efficiently.
Both platforms understand the importance of responsive customer support and have implemented measures to help users with any questions or concerns they may have.
Mobile Apps of Betterment and Acorns
Both Betterment and Acorns offer highly-rated mobile apps that provide a secure and user-friendly experience for investors on the go. These apps are designed to offer convenience and accessibility, allowing users to manage their accounts, track goals, and make investment decisions right from their smartphones.
The Betterment mobile app allows investors to easily access their portfolios, view performance charts, and make adjustments to their investment strategy. The app also offers features like goal tracking, allowing users to set and monitor progress towards their financial goals. With its intuitive interface and robust functionality, the Betterment app ensures that users have all the tools they need to manage their investments effectively.
The Acorns mobile app, on the other hand, focuses on simplicity and ease of use. It allows users to round up their daily purchases to the nearest dollar and invest the spare change in diversified portfolios. The app also offers features like recurring investments and smart deposit, making it effortless for users to save and invest automatically. With its user-friendly design and streamlined features, the Acorns app provides a seamless investment experience for beginner investors.
Features of the Betterment Mobile App:
- Account management and portfolio tracking
- Goal tracking and progress monitoring
- Investment strategy adjustments
- Personalized recommendations and insights
- Enhanced security features
Features of the Acorns Mobile App:
- Round-up investments based on daily purchases
- Automated recurring investments
- Smart deposit for additional savings
- Performance tracking and portfolio insights
- Simplified investment options
“The Betterment and Acorns mobile apps provide convenient and user-friendly ways for investors to manage their portfolios and track their financial goals.”
Whether you prefer the comprehensive features of Betterment or the simplicity of Acorns, both apps offer a seamless investment experience to suit different investor preferences. Start investing and tracking your financial progress with the mobile app that best meets your needs.
Alternative Investment Platforms to Consider
While Betterment and Acorns are popular investment platforms, there are other options available that may better suit your needs. Two alternative platforms worth considering are Wealthfront and Robinhood.
Wealthfront:
Wealthfront focuses on automated investing and savings. It offers a range of features designed to help you grow your wealth and achieve your financial goals. With Wealthfront, you can benefit from features such as tax-efficient investing, automated rebalancing, and direct indexing.
Robinhood:
Robinhood, on the other hand, is known for its commission-free trading. This platform allows you to buy and sell stocks, ETFs, and cryptocurrency without paying any trading fees. Robinhood also offers a user-friendly interface and provides access to market news and educational resources.
Both Wealthfront and Robinhood provide alternatives to Betterment and Acorns, offering unique features and fee structures that may align better with your investment preferences and goals. It’s important to carefully consider your investment strategy and desired features before choosing the platform that’s right for you.
Comparison Table: Betterment, Acorns, Wealthfront, and Robinhood
| Platform | Features | Fees | Investment Options |
|---|---|---|---|
| Betterment | Automated investing, tax loss harvesting, goal tracking, financial dashboard, cashback rewards | $4 per month or 0.25% annual fee | IRAs, 401(k)s, brokerage accounts, cash reserve |
| Acorns | Round-ups, automated investing, learning resources, sustainable portfolios | $3 monthly subscription for individual accounts | IRAs, taxable investment accounts, custodial accounts, checking account |
| Wealthfront | Automated investing, tax-efficient strategies, direct indexing | 0.25% annual advisory fee | IRAs, taxable investment accounts |
| Robinhood | Commission-free trading, user-friendly interface | No trading fees | Stocks, ETFs, cryptocurrency |
Conclusion
In conclusion, Betterment and Acorns are both popular robo-advisors that offer unique features and benefits. When it comes to choosing between the two, it’s important to consider your individual needs and preferences.
If you’re a serious investor looking for personalized financial advice and a wider range of investment options, Betterment may be the better choice for you. With its automated investing, tax loss harvesting, goal tracking, and access to various types of accounts, Betterment provides a comprehensive platform for managing your investments.
On the other hand, if you’re a beginner or simply prefer a simple, hands-off approach to saving and investing, Acorns could be the ideal option. Acorns’ features like round-ups, automated investing, and learning resources make it easy to start investing and growing your savings, even with small amounts.
Ultimately, the decision between Betterment and Acorns should be based on what aligns best with your financial goals and preferences. So take the time to evaluate your needs and explore the unique features of each platform before making a decision.
FAQ
How does Betterment compare to Acorns?
Betterment and Acorns are both popular financial services that offer automated investing and saving options. However, they have some key differences in terms of features, fees, and target demographics. Let’s explore their similarities and differences to help you decide which platform is best for you.
What are the features of Betterment?
Betterment offers a range of features including automated investing, tax loss harvesting, goal tracking, a comprehensive financial dashboard, and cashback rewards with the Betterment Visa Debit Card. It also provides access to various account types such as IRAs, 401(k)s, brokerage accounts, and a high-yield cash reserve.
What are the features of Acorns?
Acorns features include round-ups, automated investing, smart deposit, learning resources, sustainable portfolios (ESG investing), and Acorns Earn, which offers special discounts when shopping online. Acorns offers IRAs, individual taxable investment accounts, custodial accounts, and a checking account.
What types of accounts does Betterment offer?
Betterment offers various account types including IRAs, 401(k)s, taxable investment accounts, joint accounts, checking accounts, and cash reserve accounts. It also provides access to features such as tax coordination for retirement accounts and a no-fee high-yield cash reserve.
What types of accounts does Acorns offer?
Acorns offers IRAs, individual taxable investment accounts, custodial accounts, and a checking account. It also provides the option for sustainable portfolios that invest in environmentally and socially responsible assets.
What are the pricing and fees of Betterment?
Betterment charges a fee of per month or 0.25% annual fee for its services. It also offers a premium service with a higher fee of 0.40% for investors with a minimum balance of 0,000.
What are the pricing and fees of Acorns?
Acorns charges a monthly subscription fee of for individual accounts and for family accounts. These fees cover all the available account types and services.
What are the robo advisor services offered by Betterment?
Betterment is a comprehensive robo-advisor that offers automated investing, personalized financial advice from human advisors, and a user-friendly platform for goal tracking and portfolio management.
What are the robo advisor services offered by Acorns?
Acorns is a beginner-friendly robo-advisor that focuses on helping users save and invest small amounts of money through round-ups and automated investments. While it doesn’t offer personalized financial advice, it provides a user-friendly interface and educational resources.
How do I sign up for Betterment and Acorns?
Both Betterment and Acorns have user-friendly sign-up processes that can be completed quickly. They require basic personal information and linking of bank accounts. Approval is usually fast, and users can start investing within minutes.
What customer support options are available for Betterment and Acorns?
Betterment offers direct one-on-one access to financial advisors and provides phone, email, and chat support. Acorns offers phone support, 24/7 live chat, and email tickets, but does not provide direct access to financial advisors.
Do Betterment and Acorns have mobile apps?
Yes, both Betterment and Acorns have highly-rated mobile apps that offer secure and user-friendly experiences. They provide features such as account management, goal tracking, and investment management on the go.
What are some alternative investment platforms to consider?
Wealthfront and Robinhood are two alternative investment platforms that offer different features and fee structures. Wealthfront focuses on automated investing and savings, while Robinhood offers commission-free trading. These platforms provide alternatives to Betterment and Acorns, allowing investors to explore different options.
Our Friends
- https://millennialmoney.com/betterment-vs-acorns/
- https://smartasset.com/investing/betterment-vs-acorns
- https://www.modestmoney.com/betterment-vs-acorns/
Money posts:
Acorns Review | What’s In Acorns’ Portfolios? (2024)
Betterment vs. Vanguard – Investing (2024)
Stash or Acorns: Which Is Best For You? (2024)
SoFi vs Acorns: Which Robo-Advisor Is Best for You? (2024)
Acorns vs. Robinhood | Which Investing App is Best for You? (2024)
12 Best Micro Investing Apps Right Now (2024)
21 Best Investment Accounts for Any Investor (2024)
Leaving Robinhood? 9 Robinhood Alternatives That Are (2024)
