Acorns vs Betterment vs Wealthfront
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Investing can seem like an intimidating and overwhelming feat, especially if you’re low on cash or if you’re new to the industry. Luckily, there are robo-advisors out there to help you get your finances in line.
Robo-advisors are exactly what they sound like: online investment platforms that manage your portfolio for you sans hassle. The best part? You don’t need to have a ton of investing knowledge to get started.
Here are three robo-advisors to kickstart your journey to financial freedom.
Jump To
About each brand
Acorns
Acorns is a web- and app-based financial services provider that offers users a quick-and-easy way to invest and save money via automatic daily, weekly, and monthly recurring deposits.
Acorns provides users with the option to choose one of three different subscription levels:
- Personal: Acorns Personal is a $3-per-month subscription that includes an individual retirement account and a checking account (in addition to the taxable investment account).
- Personal Plus: Acorns Personal Plus costs $5 per month and includes all of the above, plus Acorns Early — a program that allows users to open an investment account for their children.
- Premium: With Acorns Premium, you will get everything from the Personal Plus and you also get a debit card for kids and eligible customers get $10,000 life insurance policy. This level costs $9 per month.
Working With Advisors Can Provide More Security than Going at It Alone.
- SmartAsset's free tool matches you with up to 3 financial advisors that serve your area in 5 minutes.
- Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Betterment
Betterment helps users manage their money through guided investing, cash management, and retirement planning. According to the company website, Betterment is designed to encourage users to make long-term financial goals (i.e., coming up with the cash for a down payment, planning a vacation, etc.) via low-cost exchange-traded funds (ETFs) and a risk profile based on how long the user plans to invest.
Betterment offers three pricing plans:
- Cash Reserve: Betterment’s Cash plan includes a no-fee checking account (which comes with a Visa debit card) and a Cash Reserve, which includes a high-yield cash account earning interest of 4.75% and “bucket money” to help users reach their financial goals. So, this plan basically offers a checking and savings account in addition to Betterment’s in-depth financial resources and educational center. The plan has a $0 minimum balance and doesn't come with any fees
- Digital Investing: The Digital Investing plan charges a 0.25% annual fee and is built for users who plan to invest. This plan offers low-cost investing portfolios, socially responsible investing options, various account choices (including joint accounts, IRAs, and trusts), and auto features such as portfolio rebalancing, dividend reinvestment, and auto-adjust. The Digital Investing plan also offers users tax-saving strategies (i.e. tax-loss harvesting and asset location) The Digital Investing plan has a $0 minimum balance.
- Crypto Investing: This plan charges a 1% annual fee and has four diversified crypto portfolio options and automated rebalancing. You can also invest in major cryptocurrencies. Gemini, which serves as Betterment's cryptocurrency custodian, charges trading fees of up to 0.15% per trade.
Wealthfront
Ideal for hands-off investors, Wealthfront is a top-notch robo-advisor that allows users to put their investment strategy on autopilot. (In other words, it’s a “set it and forget it” financial service.) Wealthfront requires a $500 minimum for investment accounts, $1 for cash accounts, and $0 for its financial planning services.
Although Wealthfront isn’t a bank, the company allows users to open a Wealthfront Cash Account — a high-interest checking account without fees. Wealthfront account holders can also enjoy 5.00% APY and get paid up to two days early with Wealthfront’s direct deposit feature.
Key features
Acorns’ features
Acorns provides users an easy way to build a nest egg by investing their spare change. The platform also offers cash back (via its Found Money program) at select retailers and has a knowledge base that users can return to whenever they need help or reassurance.
Here are some of Acorns key features:
- Minimum investment. There’s no minimum investment required to open an Acorns account. However, the service asks users to deposit $5 to start investing in one of the company’s pre-built portfolios.
- Automatic savings. Acorns gives users the power to invest as much or as little as they’d like via automatic round-ups or lump-sum transfers. Account holders can also set up daily, weekly, or monthly recurring deposits. Users also have the option to open an Acorns Spend account. Acorns provides an online checking account and debit card. Acorns Spend doesn’t require a minimum balance and offers real-time round-ups to a user’s investment account.
- Investing for kids. Acorns Early, offered in the Family plan, makes it easy for account holders to create UTMA/UGMA accounts for their children.
Betterment’s features
Betterment doesn’t require a minimum deposit to get started, offers advice from real human advisors, and provides members with the tools they need to set financial goals.
Here are some of Betterment’s key features:
- Financial goal-setting. Betterment makes saving for a vacation, down payment, or large purchase (or whatever else a user has their eye on!) easy with its goal-based saving options. Based on a series of questions, Betterment suggests different goals for retirement, a safety net, etc. Each goal has a recommended target and asset allocation, which can be adjusted.
- High-yield cash account. Betterment gives users the option to open a Cash Reserve account. This high-yield savings account comes with an interest rate of 4.75%. There’s no minimum balance; users can move their money as often as they’d like sans fees.
- Financial planning packages. Betterment has two paid investment packages: Digital Investing and Crypto Investing. Both packages offer low-cost investing portfolios, socially responsible investing options, multiple account choices (i.e., joint accounts, IRAs, and trusts), and tax-saving strategies.
Wealthfront’s features
Wealthfront is known for its top-notch robo-advising techniques, competitive management fees, and educational resources.
Here are some of Wealthfront’s key features:
- Path financial planning. Wealthfront offers a free financial planning tool called Path. It’s available on mobile and desktop and helps users plan for college, purchase their first house, or prepare for retirement. Those interested in using Path do not need a Wealthfront account to use the service.
- Line of credit. Wealthfront is unique in that it gives account holders with at least $25,000 in their account the option to borrow up to 30% of the value of their portfolio without dealing with the hassle of filling out an application, paying fees, or undergoing a credit check.
- Account types. Wealthfront offers various account types, including individual and joint taxable accounts; traditional, Roth, 401(k) rollover, and SEP IRAs; trusts, and 529 college savings plan accounts. Wealthfront does not support inherited/beneficiary IRAs.
Working With Advisors Can Provide More Security than Going at It Alone.
- SmartAsset's free tool matches you with up to 3 financial advisors that serve your area in 5 minutes.
- Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Summary of Acorns, Betterment, and Wealthfront
Platform | Minimum investment | Management fees | Tax-loss harvesting | Portfolio rebalancing |
Acorns | $0 | $3, $5, $9 per month | No | Yes |
Betterment | $0 | 0.25% annual fee for Digital Investing/1% annual fee for Crypto Investing | Yes | Yes |
Wealthfront | $500 | 0.25%per year | Yes | Yes |
Costs and fees
Acorns
Acorns features three membership levels:
- The Personal plan is just $3 per month and features an Acorns Invest account, a Later retirement account, and a Spend checking account.
- The Personal Plus plan is $5 per month and features everything that the Personal plan features in addition to Acorns Early, which is an investment account for kids.
- The Premium plan is $9 per month and has a debit card for kids and a $10,000 life insurance policy for eligible members.
Betterment
Betterment gives users the option to choose between three pricing plans:
- The No-Fee Checking plan includes a no-fee checking account (which comes with a Visa debit card), and a Cash Reserve high-yield savings account with an earning potential of 4.75%. Those who open a no-fee checking account can also access Betterment’s advice and planning tools.
- The Digital Investing plan has a $0 minimum balance and a 0.25% annual fee or ~$2.50 per year for every $1,000. The Digital Investing plan includes unlimited rebalancing and advanced tax-saving strategies.
- The Crypto Investing plan doesn't have a minimum account balance requirement, but the company charges a 1% annual fee.
Wealthfront
Wealthfront charges an annual advisory fee of 0.25% on all assets under management. Wealthfront does not charge any account-opening, trading/commission, withdrawal, or account transfer fees.
Pros and cons
Acorns pros and cons
Pros
- There’s no balance minimum required to open an Acorns account, however, there is a $5 minimum to begin investing.
- Acorns is easy to use! Investing can seem daunting, especially for beginners. But with Acorns, users can automate their investments and learn everything there is to know about smart investment practices via Acorns’ educational resource center.
- Acorns auto-saving option makes it easy to save money. What’s more? Users can earn money whenever they shop at one or more of Acorns partner brands.
- There’s no fee for withdrawing funds, either. Users can grab their money anytime they’d like. Though it may take up to 6 business days for the funds to be in their bank account.
- Acorns offers portfolio diversification. Each dollar a user invests is automatically diversified over 7,000 stocks and bonds.
- According to the company website, customers’ investments are protected up to $500,000 (including $250,000 for claims for cash).
Cons
- Acorns doesn’t offer tax-loss harvesting or any form of tax assistance.
- The flat monthly fee ($3/$5/$9) is relatively high, especially for smaller accounts.
- Acorns has a limited selection of investment portfolio options and does not offer users the option to invest in individual stocks.
Betterment pros and cons
Pros
- Betterment offers fractional shares and allows users to open an account with a $0 minimum balance.
- Betterment members can make goal-based investment choices with Betterment’s goal-based savings options.
- Account-holders have access to customer support via phone, email, and one-on-one counseling Monday through Friday.
- Betterment offers a number of educational resources that can help new users learn how to invest. The Betterment site also has an extensive FAQ section.
- Betterment investments are protected by the Securities Investor Protection Corporation (SIPC). It covers up to $500,000 of missing assets like securities and cash, including a maximum of $250,000 for cash claims.
Cons
- Members who do not have a paid plan may be charged anywhere from $299 to $399 per call with a financial advisor via Betterment’s one-off Advice Packages.
- Betterment does not include investments in REIT ETFs.
Wealthfront pros and cons
Pros
- Wealthfront offers free financial planning.
- Wealthfront provides users with referral incentives. For example, whenever you refer a friend via your invitation link, you'll get an additional $5,000 managed for free if the friend funds an investment or cash account through the link. And if they open an investment account, they’ll also get $5,000 managed for free.
- Wealthfront investments are SIPC-insured. This protects assets up to $500,000 (including $250,000 in claims for cash).
Cons
- Wealthfront doesn’t let you buy fractional shares of ETFs.
- Joint accounts can only be accessed through the primary account holder’s login.
FAQs
What is Acorns Spend?
Acorns Spend is the first checking account that offers a debit card that saves, invests, and earns for its users. Unlike a traditional bank account, Acorns Spend includes a retirement account (Acorns Later) and an investment account (Acorns Invest).
Will Acorns let me invest in cryptocurrency?
Yes, you can allocate up to 5% of your investments towards a bitcoin-linked ETF.
How do I grow my Acorns’ portfolio?
Growing your portfolio with Acorns is easy. All you have to do is connect an existing bank account and link any debit or credit cards that you use to your Acorns account. If you decide to opt-in to Acorns’ round-ups feature, Acorns will automatically round up your purchases to the next dollar. Once your round-ups reach $5, Acorns will invest the change.
What investments are in the Betterment core portfolio?
Betterment’s core portfolio is a combination of stock ETFs and bond ETFs.
Does Betterment support accounts for minors?
No, Betterment does not offer custodial accounts for minors at this time. Betterment members must be 18 years or older. Betterment users can, however, set up separate savings goals for their children if they’d like.
Is Betterment a real bank?
Although Betterment offers a checking and savings option, Betterment is not a bank. Betterment is an online financial service provider and robo-advisor that helps users invest their money. Banking services are provided through NBKC bank.
Is Wealthfront good for beginners?
Wealthfront offers services that can be used by both aspiring and seasoned investors. The platform also gives users the option to open a no-fee checking account. The only downfall? Users need $500 to open an investment account.
Does Wealthfront support socially responsible investing?
According to the Wealthfront website, the company supports socially responsible investing through stock-level tax-loss harvesting and smart beta. Wealthfront members who qualify may request to remove certain companies from their list of investments.
Does Wealthfront hold individual stocks in addition to my managed portfolio?
Wealthfront does not allow account holders to hold individual stocks.
Working With Advisors Can Provide More Security than Going at It Alone.
- SmartAsset's free tool matches you with up to 3 financial advisors that serve your area in 5 minutes.
- Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
The bottom line
Whether you are an aspiring investor or a seasoned professional, you have low-cost financial advisor options. Choosing the best one will depend not only on your skill level but also on your overall financial goals. The good news is that robo-advisors make setting and achieving those goals easy. You’ve just got to determine which platform is right for you.
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Writer
Tabitha Britt is a New York-based freelance writer and editor whose work has appeared on INSIDER, the Huffington Post, and Taste of Home. When she's not glued to her computer screen, she can be found walking her beloved pooch, Biscuit.
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