Betterment is a Robo advisor investment platform that you can use to manage your assets and investments. The company’s app is designed to be easy to use and highly personalized, giving you the ability to dictate what you want to invest in, while getting advice from the Robo advisor. You can start investing with as little as just $10, and the platform’s mobile app makes it easy to invest on the go.
- Transparent fee schedule – the platform only charges a single fee of just 0.25% per year no matter how much money you have invested with them.
- Insured by SIPC up to $500,000 – your investments with Betterment are protected for up to $250,000 in claims for cash and $250,000 in other claims.
- 7+ pre-built portfolios to choose from – these portfolios are pre-designed by investment experts to give you the best possible investing returns.
- Low minimum investment amount – the minimum investment amount is just $10, making the platform ideal for beginners who want to start investing.
- No option to invest in individual stocks – the platform invests in ETF portfolios with over 5000 companies but you cannot invest in individual stocks.
- Advice packages are costly – if you are investing a lot and want to speak with an advisor, you have to pay a 0.4% fee or $299 for an advice package.
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Compare to Other Investment Apps
Invest in real estate properties with a $10 minimum initial investment
Historical annual return varies from 8.8% to 12.4% (2019 – 9.47%)
Low annual fees: advisory – 0.15%; management fee – 0.85%
Manage your portfolio of stocks, ETFs, and crypto investments – all in one place
Over 5000 stocks and ETFs to choose from (dividend stocks available)
Follow other investors, see their portfolios, and exchange ideas
How Does Betterment Work?
Betterment is a financial management service that specializes in automated investments and Robo-advisory. The company has been around since 2010, and it was one of the first companies to offer Robo-advisory services.
Betterment specializes in providing Robo-advisory services to its users. This feature allows you to create an investment portfolio based on your risk tolerance and preferences. The algorithm will automatically help you invest your funds and rebalance your portfolio based on your settings.
Betterment’s Robo-advisors operate on five principles:
- Automation and discipline
- Lower fees and costs
- Manage taxes
The company also uses proprietary algorithms to help you find the most profitable way to invest your funds.
How Much Can You Earn With Betterment?
Your earnings with Betterment will depend on the types of stocks you include in your portfolio. Including higher-risk stocks may allow you to increase your investment returns, although this may also increase your risk. In contrast, lower-risk investments may provide lower but more steady returns.
For example, if you invest in the stocks on the S&P 500 index, you can enjoy over 10% in annual investment returns.
Nonetheless, remember that all investments carry risks. There is always the chance that you might lose money on your investments.
Betterment Reviews: Is Betterment Legit?
|Review Website||Betterment Review|
|Trustpilot||3.1 out of 5 stars|
|ConsumerAffairs||3.7 out of 5 stars|
|Google Play Store||4.6 out of 5 stars|
|Apple App Store||4.7 out of 5 stars|
Betterment is a legitimate financial management platform that you can use to invest in stocks and ETFs. It has received mostly positive reviews from its users.
Many reviewers praised Betterment for having a clean and easy-to-use user interface. Users were also pleased with how easy it was to set up automatic deposits from their bank accounts and manage their Betterment account performance.
However, some users have highlighted problems such as being unable to transfer funds between their accounts. There were also complaints from users that Betterment had a limited list of external accounts that they could sync.
Who Is Betterment Best for?
Betterment is ideal for anyone who wants to invest their funds in the stock market with the help of a computer algorithm. It allows you to manage your investments in various stocks and ETFs. The algorithm also helps you automatically buy and sell assets.
Thus, if you want to have control over the types of stocks you invest in without actively having to trade stocks, Betterment is a good website to use.
Betterment Fees: How Much Does It Cost to Invest With Betterment?
If you have a large account balance of over $2 million, you can enjoy a 0.10% discount on fees. On the digital plan, you will pay just 0.15% on the portion of your balance over $2 million. On the premium plan, you will pay 0.30% for the part of your balance over $2 million.
Betterment Features: What Does Betterment Offer?
Wide Variety of Account Types
Betterment allows users to create a variety of different account types, including:
- Roth IRA
- Traditional IRA
- SEP IRA (single participant only)
- Inherited IRATo
- Individual taxable accounts
- Joint taxable accounts with rights of survivorship
- Trust accounts
Financial Advisory Packages
Betterment offers financial advisory packages that help you manage your wealth on the platform. One of the most popular packages you can purchase is the $199 Getting Started Package. This package gives you a 45-minute video call to help you learn how to set up your account and make the most of the tools and features Betterment offers.
In addition, some packages cost $299 and come with 60-minute calls. These packages provide financial advice centered on marriage, college planning, general financial health, and retirement.
Regardless of which financial planning package you choose, you will be able to speak with a certified financial planner.
Betterment also offers a retirement planning tool allowing you to link your retirement accounts, such as your 401k, with Betterment. Connecting your accounts gives you a comprehensive view of your investments and savings from a single dashboard.
Betterment also allows you to compare your current levels of savings with your desired retirement spending levels. You can also check whether you are on track to retire when you want and whether you are using the correct vehicles for your savings and investments.
When initially setting up your Betterment account, you can set investment objectives based on your current income and age. The platform then suggests possible goals that you can work towards.
You can also add personalized goals that will help to guide your decision-making on the types of investments you want to make.
Sign Up Bonus
Betterment has a sign-up bonus for new users to the company. To qualify for this bonus, you will need to deposit funds within the first 45 days of creating your Betterment account. This sign-up bonus includes a waiver of advisory fees for up to one year, depending on your deposit amount.
|Deposit Amount||Free Account Management Duration|
|$15,000 to $99,999||1 month|
|$100,000 to $249,999||6 months|
|Over $250,000||12 months|
There are no requirements for you to start investing with Betterment. However, if you want to have a Premium Investing account, you will need to maintain a minimum balance of at least $100,000 in your account.
Betterment Payout Terms & Options?
Betterment allows users to withdraw their funds from their accounts whenever they want without any additional fees.
In general, most withdrawals take between four to five days to process. When you submit a withdrawal request, Betterment will liquidate your portfolio holdings before depositing the funds directly into your bank account.
Note that if you are withdrawing over $250,000, you will need to provide medallion signature guaranteed transfer paperwork.
Betterment Risks: Is Betterment Safe to Invest With?
Betterment accounts are insured by the Securities Investor Protection Corporation (SIPC). Thus, your investments with Betterment are covered for up to $250,000 in cash and $500,000 in total.
In addition, Betterment regularly goes through many different safety checks and audits. For example, the SEC requires Betterment to segregate client assets from broker assets. These checks and audits ensure that your investments are kept safe with Betterment.
How Does Betterment Protect Your Money?
For additional security for your account, you can set up two-factor authentication. With two-factor authentication, anyone trying to access your Betterment account will need to enter a unique verification code.
Thus, a hacker would need to have access to your emails or text messages in addition to your password if they want to access your account. Two-factor authentication can hence provide an additional layer of security for your account.
What Are the Betterment Pros & Cons?
- Low account management fees, starting from just 0.25%.
- No minimum account balance for checking and digital investing accounts.
- Liquidate your investments easily and withdraw your funds within 4 to 5 days.
- Sync your external accounts to get an overview of your finances from a single dashboard.
- Financial advisory services are expensive, starting from $199 for a 45-minute session.
- There is a limited number of external accounts that users can sync.
How Good Is Betterment Support and Knowledge Base?
Betterment provides users with regular new articles written by financial experts. These articles comprise a knowledge base that you can access to learn more about investing with Betterment.
In addition, the company also provides good customer support to its users. If you face any issues or have any questions about how to use the platform, you can also visit the Betterment help center to find answers to many of the frequently asked questions.
If you are on the Premium investing plan, you will also have access to unlimited calls and emails with the company’s financial advisors.
Betterment Review Verdict: Is Betterment Worth It?
If you are looking for an investment platform with Robo-advisory services, Betterment is one of the best websites you can join. Betterment does not have a minimum balance requirement or a minimum investment amount for its digital investing accounts, making it ideal for novice investors.
In addition, Betterment also has low account management fees starting from just 0.15% per year. Alternatively, you can also enjoy additional features with a premium investing account, although this account level has a 0.40% annual fee.
If you want to have control over the investments in your portfolio without having to actively manage your assets, Betterment is one of the best platforms you can use.
How to Sign Up With Betterment?
Step 1: Create a Betterment Account
To start investing with Betterment, you will need to provide a valid email address to create a new account. You will need to confirm your age, work status, and annual income. The company will also ask whether you are new to investing.
Step 2: Set Up Your Portfolio
After creating your account, you can then set your first investment goal. The Betterment algorithm will provide stock allocation suggestions, and you can tailor your portfolio based on your personal preferences and risk tolerance.
Step 3: Verify Your Identity
You will also need to verify your identity with Betterment by providing your date of birth, gender, and Social Security number.
You will also need to provide information about your employment status, household income, and an estimate of your investable assets.
Step 4: Confirm Regulatory Questions
You will also need to confirm some regulatory details by answering some questions.
These questions include:
- Are you a 10% shareholder, policymaker, or director of a publicly-traded company?
- Are you associated with or employed by a broker-dealer?
- Has the IRS notified you that you are currently subject to backup withholding?
Step 5: Set Up Deposits
Finally, you will need to set up deposits with your Betterment account. You can set up automatic deposits, allowing you to regularly contribute funds to your Betterment account.
Alternatively, you can also deposit funds into your Betterment account whenever you have cash available.
Sites Like Betterment
|Service Fees||From 0.25% per year||From $3 per month||1%||No fees|
|Best For||Robo-investing||Spare change||Real estate||Stocks and ETFs|
Betterment vs Acorns
Acorns is a micro-investing platform that specializes in helping its users invest their spare change. You can link your credit or debit card with Acorns to automatically invest in stocks and ETFs.
The company works by rounding up your spending with your linked card to the nearest dollar. It then saves the difference and invests it once you have at least $5 in savings.
Unlike Betterment, Acorns is more suitable for people who want to invest their spare change. Acorns also charges a fee starting from $3 per month. Since these two platforms cater to different needs, you can use both of them at the same time to maximize your investments.
Betterment vs Fundrise
Fundrise is an alternative investment platform to Betterment. Unlike Betterment, Fundrise allows users to invest in real estate without having to buy a rental property. The platform functions as a real estate investment trust (REIT), allowing you to buy a share of the different investment properties that they own.
Fundrise offers an average annual return of over 5%, allowing you to earn a sizeable profit from your investments. Moreover, you can also earn dividends from the profits that the REIT earns. Thus, Fundrise allows you to create a source of passive income from your investments.
Betterment vs Public
Public is an investment app that allows you to buy and sell shares and ETFs on the stock market. Unlike Betterment, Public does not offer Robo-advisory services. Instead, it allows you to personally buy and sell stocks with no fees.
Public also has a low minimum investment amount of just $1, making it ideal for beginner investors. Thus, Public may be better for investors who want to personally manage their investments. In contrast, Betterment may be better for investors who want the help of a Robo-advisor to manage their investments.
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What Is Betterment?
The company’s goal is to help people of all levels of wealth to invest their funds. Betterment currently has over $33 billion in assets under management. In addition, the company also has over 730,000 investors actively investing funds with them.
Is Betterment a good investment?
Betterment offers a wide range of different portfolios for you to choose from. Regardless of your investment goals and risk tolerance, the company will have a portfolio that might suit your needs.
Does Betterment actually make you money?
Betterment allows you to make money by investing in various stocks and ETFs. Its Robo-advisory services help you pick good stocks to invest in that can earn you decent returns on your investment.
Can you lose money with Betterment?
Like all investments, you can lose money when you invest with Betterment. Thus, do your research and due diligence before investing in Betterment.
How much money should I put into Betterment?
Betterment has no minimum balance requirements for users on its digital investing plan. Thus, the amount you put into Betterment should depend on how much you are comfortable investing.
If you are a beginner investor, it may be good to start by depositing a small amount at first. You can then increase your deposits over time as you get more familiar with investing.
Is Betterment good for beginners?
Betterment is one of the best investment platforms for beginners. The platform provides Robo-advisory services, making it easy for new investors to invest without in-depth knowledge of the stock market.