Betterment and Acorns are two of our highest-rated robo-advisors, as both do an excellent job of automating appropriate investment portfolios for their customers. However, there are some key differences between these two platforms that are important to know if you're choosing one. In this article, we'll do a side-by-side comparison of Betterment and Acorns, so you can determine if one is a good fit for you.
Betterment vs. Acorns: At a glance
| Offer | Acorns |
Betterment |
|---|---|---|
| Rating | Rating Rating image, 4.0 out of 5 stars. 4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. |
| Commissions | Commissions | Commissions |
| Account Minimum | Account Minimum | Account Minimum |
| Next Steps | Open Account for Acorns Read Full Review | Read Review |
Betterment vs. Acorns: Commissions & fees
Both Betterment and Acorns are pure robo-advisors. They don't offer individual stock trading, mutual funds, or other active investment options like you'd find with a traditional brokerage account. Like most robo-advisors, both platforms charge a management fee. However, the way each charges fees is very different.
Betterment charges a fee of either 0.25% of invested assets annually, or a flat fee of $4 per month for its standard plan. It also has a Premium plan for investors with over $100,000 in their accounts that provides unlimited access to Certified Financial Planners™ by phone, and this comes with a slightly higher 0.40% annual management fee.
Acorns, on the other hand, charges a flat monthly fee for its services. It has three monthly plans, with varying levels of account features, with costs of $3, $6, and $12 per month.
| Betterment | Acorns | |
|---|---|---|
| Stock & ETF commissions | N/A | N/A |
| Options commissions | N/A | N/A |
| Crypto commissions | N/A | N/A |
| Mutual fund commissions | N/A | N/A |
| Account transfer fee | $75 | $35 per ETF |
| Account maintenance fee | 0.25%-0.40% annually | $3, $6, or $12 per month |
Data source: Betterment and Acorns.
Betterment vs. Acorns: Investments available
As mentioned earlier, Betterment and Acorns are robo-advisors. They don't allow customers to buy individual stocks or any other investment options directly.
Having said that, like most robo-advisors, both Betterment and Acorns use exchange-traded funds (ETFs) when creating an investment portfolio for their customers, and since neither has an account minimum, they naturally incorporate fractional shares into investment strategies.
It's also worth noting that both offer cryptocurrency investment choices. Betterment offers managed and automated cryptocurrency portfolios that consist of multiple digital assets. Acorns doesn't offer standalone cryptocurrency portfolios, but gives investors the option to allocate as much of 5% of their money into a Bitcoin ETF.
| Betterment | Acorns | |
|---|---|---|
| Stocks and ETFs | Yes | Yes |
| Fractional shares | Yes | Yes |
| Options | No | No |
| Mutual funds | No | No |
| CDs | No | No |
| Bonds | No | No |
| Futures | No | No |
| Crypto | Yes | Yes |
| Currencies | No | No |
Data source: Betterment and Acorns.
Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
| Account | Fees | Account Minimum | |
|---|---|---|---|
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, $0 for options contracts | $0 | Open Account for SoFi Active Investing |
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, ETFs, and options; up to $6.99 monthly for Robinhood Gold | $0 | Open Account for Robinhood |
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Commission-free; other fees apply | $0 | Open Account for E*TRADE |
Betterment vs. Acorns: Account types available
Since both Betterment and Acorns are robo-advisors, they offer automated investment accounts. But it's important to point out that these come in several different forms.
Both platforms offer individual standard (taxable) robo-advisor accounts, traditional and Roth IRAs, and SEP IRAs. Betterment is the only one that offers joint accounts, while Acorns is the only one that offers custodial (UGMA/UTMA) accounts.
Both offer checking accounts in partnership with banks. Betterment offers an excellent cash reserve account that is competitive with the top high-yield savings accounts in the market.
| Betterment | Acorns | |
|---|---|---|
| Taxable brokerage | Yes | Yes |
| Joint tenant | Yes | No |
| Margin | No | No |
| Robo-advisor | Yes | Yes |
| Traditional IRA | Yes | Yes |
| Roth IRA | Yes | Yes |
| Other IRA | Yes, SEP IRAs | Yes, SEP IRAs |
| Custodial | No | Yes |
| Checking | Yes | Yes |
| Savings | Yes | No |
| Credit card | No | No |
Data source: Betterment and Acorns.
Betterment vs. Acorns: Mobile app and trading platforms
Both of these robo-advisors are app-centered, so they both have top-notch mobile apps. Betterment's app is one of the most highly rated financial apps in the App Store and Google Play store, and the same is true for Acorns. In short, having a user-friendly app is an area where both of these platforms shine.
Final take
As mentioned, these are both top-tier robo-advisors, but there are some key differences that could make one more appealing to you than the other. For larger accounts, Acorn's flat monthly fee could make it a significantly cheaper option, just to name one example. And if you're planning to open a joint investment account with your spouse, Betterment is the clear winner. The bottom line is that the best one for you depends on what features matter the most to you.
Open Account for Acorns
OnAcorns'Secure Website.
Ratings Methodology
Our Rating:
Rating image, 4.0 out of 5 stars.
4.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
Acorns is a top-tier robo-advisor ideal for hands-off investing. The bigger your account balance, the more competitive you'll find Acorns' fees. You may want to open an account for the simple fee structure or the variety of account options, including custodial accounts for kids. Join Acorns to quickly open a diversified portfolio that manages itself.
Read Full Review
Fees:
$3-$12 monthly
Account Minimum:
$0
Open Account for Acorns
OnAcorns'Secure Website.
FAQs
When using Betterment or Acorns, or any other robo-advisor, it's important to remember that investment performance depends on many factors that are outside of the company's control. For example, if the U.S. enters a recession and the stock market falls, your investments could lose money. There is no way to determine which robo-advisor will make you the most money over the long run.
Yes. Betterment invests your money into exchange-traded funds (ETFs), which are generally stock-based investments. The stock market can go up or down over time, and before you invest with a robo-advisor, you should be aware that it's entirely possible to lose money.
Neither Betterment or Acorns allows customers to buy individual stocks directly. These are automated investment platforms, which allocate your money into investments on your behalf. Having said that, most of the underlying investment funds used by these platforms are stock-based.
