This text/put up comprises references to services or products from a number of of our advertisers or companions. We could obtain compensation once you click on on hyperlinks to these services or products
In case you want a serving to hand with investing, Betterment and Acorns are two of the most well-liked apps you should utilize. One is a fully-fledged robo-advisor, whereas the opposite is a microsavings app with many similarities. However each require $0 to open an account and are good for brand new traders.
Nevertheless, selecting the best platform to take a position with is determined by your objectives, how a lot you are investing, and timeframe.
That is why our Betterment vs. Acorns breakdown is overlaying the options you might want to know and the way to finally choose the precise investing choice.
About Betterment
Betterment is a number one robo-advisor that was based in 2008. It at present has over 730,000 traders and $33 billion in belongings below administration. And with a $0 funding requirement, it is a superb strategy to make investments with a small amount of cash.
About Acorns
Based in 2012, Acorns is the most well-liked micro investing app in the marketplace. With over 9 million prospects, Acorns helps thousands and thousands of individuals save and make investments on autopilot. It additionally has reasonably priced beginning plans and lets anybody start investing no matter how a lot cash they’ve,
Betterment vs. Acorns – Portfolios
Each Betterment and Acorns make investments your cash in varied portfolios that match your investing objectives and danger tolerance. It is a foundational characteristic for robo-advisors and microsaving apps alike, and it is why Betterment and Acorns are perfect for passive traders.
With Betterment, you may spend money on a wide range of portfolios like:
- Betterment Core Portfolio: Contains varied Vanguard inventory and bond ETFs.
- BlackRock Goal Earnings Portfolio: A diversified basket of 100% bonds.
- Goldman Sachs Good Beta Portfolio: One other bond portfolio that is designed for retirees who need decrease danger.
- Progressive Expertise Portfolio: Contains firms in sectors like robotics, AI, blockchain expertise, and different revolutionary industries.
You reply an investing questionnaire once you enroll. From there, Betterment builds a portfolio of low-cost ETFs and bonds that matches your objectives and danger tolerance.
Your Acorns portfolio is much like Betterment for the reason that app additionally invests in a mixture of ETFs and bonds. The app recommends a portfolio relying in your age, time horizon, earnings, objectives, and danger tolerance. Like Betterment, you are free to decide on no matter portfolio you need no matter what the app suggests.
At the moment, Acorns has 5 core portfolios you may spend money on:
- Conservative: A mixture of authorities and company bonds.
- Reasonably Conservative: A roughly even cut up between shares and bonds.
- Average: Quite a lot of giant, mid, and small cap shares plus some bond publicity.
- Reasonably Aggressive: Principally giant cap shares and a few worldwide shares plus bonds.
- Aggressive: A totally stock-based portfolio with some worldwide publicity.
Nevertheless, Acorns solely invests in 12 completely different ETFs throughout all portfolios, so it is extra restricted versus Betterment’s portfolios.
![](https://investorjunkie.com/wp-content/uploads/2019/08/investorjunkie-icon-small.png)
Betterment vs. Acorns – Administration Charges
One foremost distinction between Betterment and Acorns are the charges you pay:
- Betterment Charges: Betterment prices 0.25% in annual administration charges for accounts below $100,000 and 0.40% for premium accounts over $100,000. Premium prospects additionally get entry to a human monetary advisor.
- Acorns Charges: Acorns prices $3 or $5 monthly relying on the plan you select. The Private plan, which prices $3 monthly, unlocks the principle investing characteristic plus options like retirement financial savings and Acorns checking. The $5 Acorns Household plan consists of every thing from the Private plan in addition to Acorns Early, the app’s investing account for youths.
With its Private plan, Acorns prices $36 per 12 months in administration charges. With Betterment, spending this a lot in annual charges requires investing roughly $15,000.
![](https://investorjunkie.com/wp-content/uploads/2019/08/investorjunkie-icon-small.png)
Betterment vs. Acorns – Minimal Funding
There is a $0 funding requirement for Betterment and Acorns, so anybody can open an account. When you make a deposit with Betterment, it begins investing your cash within the portfolios you choose. With Acorns, it may begin investing by rounding-up your spare change or via one-time or recurring investments. There is a $5 minimal for one-time or recurring investments.
The principle distinction between Betterment’s and Acorns’ investing model is that this round-up characteristic. For instance, if you are going to buy your morning espresso and a muffin for $5.25, Acorns can round-up your buy to $6 and make investments the extra $0.75 routinely. This helps newbie traders construct good habits and make investments routinely.
You too can create automated deposits with Betterment if you wish to make investments repeatedly. The robo-advisor permits you to arrange weekly, biweekly, and month-to-month deposits. You too can arrange two deposits on particular days monthly, which is ideal for investing cash proper after your paycheck deposits. Lastly, one-time deposits are additionally accessible.
![](https://investorjunkie.com/wp-content/uploads/2019/08/investorjunkie-icon-small.png)
Betterment vs. Acorns – Account Varieties
With Betterment, you may open a wide range of account sorts, together with:
- Roth, Conventional, and SEP IRA
- Particular person taxable accounts
- Joint taxable accounts
- Belief accounts
- Betterment Money Reserve
- Betterment checking account
At the moment, Betterment does not help 529 accounts, custodial accounts, solo 401(ok)s, or self-directed accounts.
As for Acorns, eligible account sorts embrace:
- Roth, Conventional, and SEP IRA via Acorns Later
- Particular person taxable account
- 401(ok) rollover
- Custodial accounts via Acorns Household
- Acorns checking account
The principle distinction is that Betterment helps joint and belief accounts whereas Acorns helps custodial accounts. This may make Betterment superior if you wish to make investments along with your companion whereas Acorns is best for educating your youngsters the way to make investments.
![](https://investorjunkie.com/wp-content/uploads/2019/08/investorjunkie-icon-small.png)
Betterment vs. Acorns – ESG Investing
If you wish to spend money on firms that worth environmental and social nicely being, ESG investing is for you. However not each robo-advisor or microsavings app gives ESG targeted portfolios.
Fortunately, each Betterment and Acorns have ESG choices you may discover. However Betterment is definitely superior because it has three socially accountable investing (SRI) portfolios:
-
- Broad Affect: Invests in ETFs that think about all ESG parts, together with moral labor, reducing carbon emissions, and extra firm range.
- Local weather Affect: Helps firms making an effort to decrease carbon emissions and ones that fund inexperienced initiatives whereas divesting from holders of fossil-fuel reserves.
- Social Affect: This portfolio helps firms that promote minority empowerment and higher gender range.
In distinction, Acorns has one ESG portfolio referred to as Acorns Sustainable Portfolios. This portfolio is powered by iShares BlackRock ETFs. However you may select 4 completely different portfolio kinds, starting from reasonably conservative to aggressive, equally to common Acorns portfolios.
![](https://investorjunkie.com/wp-content/uploads/2019/08/investorjunkie-icon-small.png)
Betterment vs. Acorns – Portfolio Rebalancing
Each Betterment and Acorns provide automated portfolio rebalancing at no further price. This implies every firm can sell-off and buy completely different ETFs or bonds to maintain your portfolio composition aligned along with your total objectives.
![](https://investorjunkie.com/wp-content/uploads/2019/08/investorjunkie-icon-small.png)
Betterment vs. Acorns – Safety
Each Betterment and Acorns are safe monetary companies that use encryption and security measures like two-factor authentication to assist shield your private and monetary data. Money balances additionally get FDIC insurance coverage and as much as $500,000 in SIPC insurance coverage on your investments.
![](https://investorjunkie.com/wp-content/uploads/2019/08/investorjunkie-icon-small.png)
Betterment vs. Acorns – Different Distinctive Options
Betterment Distinctive Options
Some distinctive options you get as a Betterment buyer embrace:
- Betterment Money Reserve: This money reserve account has a $10 minimal deposit requirement and is a superb account for parking idle money. It pays 0.75% APY on the time of writing, which is on-par with many high-yield financial savings accounts.
- Betterment Checking Account: Get pleasure from a no-fee checking account that gives no ATM charges, international transaction charges, or overdraft charges. Plus, money will get as much as $250,000 in FDIC-insurance. You even earn cash-back rewards at hundreds of manufacturers once you spend along with your Betterment Visa debit card.
- Crypto Investing: Betterment does not at present help crypto investing, nevertheless it’s coming to the platform since its acquisition of Makara. Search for automated crypto portfolio investing sooner or later for this robo-advisor.
- Human Recommendation: Premium investing prospects with portfolios over $100,000 get limitless calls and emails with Betterment’s workforce of licensed monetary planners. Common Digital investing prospects with smaller portfolios may purchase recommendation packages starting from $299 to $399 to assist with completely different areas of economic planning, like retirement financial savings or faculty planning.
- Planning Instruments: Clients can use instruments like Betterment’s retirement planner or create goal-based investments and observe their progress and internet value with a centralized dashboard.
- Tax-Loss Harvesting: Not like Acorns, Betterment makes use of tax-loss harvesting to assist optimize your returns by promoting off particular belongings at a loss to cut back a few of your capital good points.
Betterment Money Reserve APY Disclosure – The annual share yield (“APY”) on the deposit balances in Betterment Money Reserve (“Money Reserve”) is 0.75% and represents the weighted common of the APY on deposit balances on the banks collaborating in Money Reserve (the “Program Banks”) and is present as of Might 11, 2022. This APY is variable and topic to vary day by day. Deposit balances usually are not allotted equally among the many collaborating Program Banks. A minimal deposit of $10 is required, however there isn’t any minimal stability required to be maintained. The APY accessible to a buyer could also be decrease if that buyer designates a financial institution or banks as ineligible to obtain deposits. APY applies solely to Money Reserve and doesn’t apply to checking accounts held via Betterment Checking. Money Reserve and Betterment Checking are separate choices and usually are not linked accounts.
Acorns Distinctive Options
- Spare-Change Spherical-Ups: Acorns is among the pioneers of the spare-change round-up methodology of investing, and that is the inspiration of how the app helps you repeatedly make investments.
- Acorns Checking Account: This fee-free checking account helps you routinely make investments your cash once you store. It additionally gives free ATM withdrawals from 55,000+ AllPoint ATMs and has as much as $250,000 in FDIC insurance coverage like Betterment’s checking account.
- Acorns Earn: Earn money again once you store from 350+ manufacturers in individual plus from hundreds of on-line manufacturers.
- Bits of Bitcoin ETF: Select to spend money on Bitcoin via Acorns and diversify as much as 5% of your portfolio in crypto. Acorns invests within the ProShares Bitcoin Technique (BITO) so as to add BTC publicity to your portfolio with out having to truly buy BTC via a crypto trade.
Betterment Professionals & Cons
execs
- Low annual administration charges
- $0 funding requirement
- Wider portfolio selection than Acorns, together with ESG portfolios
- Betterment Money Reserve account pays curiosity in your money deposits
- Makes use of tax-loss harvesting
cons
- That you must pay for monetary recommendation or have a portfolio over $100,000
- Custodial accounts aren’t accessible
Acorns Professionals & Cons
execs
- Helps new traders construct good habits with common contributions
- Permits you to spend money on crypto via Bits of Bitcoin
- Custodial accounts can be found via Acorns Household
- Easy pricing construction
- Earn extra money with Acorns via the Acorns Earn program
cons
- Not as many portfolio choices as Betterment
- Portfolios are much less diversified than Betterment and solely spend money on 12 ETFs
- Month-to-month charges are very excessive for small account balances
- Does not make the most of tax-loss harvesting
Acorns vs. Betterment – Which Possibility Ought to You Select?
We want Betterment over Acorns if you’d like extra portfolio choices and want to persistently make investments cash with recurring deposits or via bigger lump-sum deposits. It is also superior to Acorns if you’d like extra ESG-friendly portfolios. In distinction, we want Acorns over Betterment for those who’re comparatively new to investing and wish a serving to hand with constructing good habits. However Betterment is our suggestion for long-term investing and retirement planning.
If something, you may view Acorns because the coaching wheels on your investing bicycle. It is a helpful app for studying the way to persistently make investments. And the actual fact you may open a custodial account on your youngsters can be a promoting level.
Nevertheless, Acorns month-to-month pricing is steep for very small portfolios, which is a draw back since this app excels for brand new traders. With Betterment, you have got steady, low charges and far more portfolio selection, making it a greater long-term investing resolution than Acorns.
Backside Line
Each Betterment and Acorns are helpful instruments for investing on autopilot. Choosing the proper choice is determined by your objectives, how a lot cash you are investing, and the way lengthy you intend on investing for as nicely.
Acorns is a superb app for newbie traders because it teaches the ability of standard investing and compound curiosity. And Betterment is one in every of our favourite robo-advisors due to its low payment construction and portfolio selection.
Simply evaluate Betterment’s charges to Acorns and see which app is less expensive. And take into consideration the sorts of portfolios you need to make investments with and if you wish to make investments your spare change or bigger sums of cash.
Betterment Money Reserve Disclosure – Betterment Money Reserve (“Money Reserve”) is obtainable by Betterment LLC. Shoppers of Betterment LLC take part in Money Reserve via their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its associates is a financial institution. Via Money Reserve, shoppers’ funds are deposited into a number of banks (“Program Banks”) the place the funds earn a variable rate of interest and are eligible for FDIC insurance coverage. Money Reserve gives Betterment shoppers with the chance to earn curiosity on money meant to buy securities via Betterment LLC and Betterment Securities. Money Reserve shouldn’t be considered as a long-term funding choice. Funds held in your brokerage accounts usually are not FDIC‐insured however are protected by SIPC. Funds in transit to or from Program Banks are usually not FDIC‐insured however are protected by SIPC, besides when these funds are held in a sweep account following a deposit or previous to a withdrawal, at which era funds are eligible for FDIC insurance coverage however usually are not protected by SIPC. See Betterment Shopper Agreements for additional particulars. Funds deposited into Money Reserve are eligible for as much as $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance coverage as soon as the funds attain a number of Program Banks (as much as $250,000 for every insurable capability—e.g., particular person or joint—at as much as 4 Program Banks). Even when there are greater than 4 Program Banks, shoppers won’t essentially have deposits allotted in a way that can present FDIC insurance coverage above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance coverage limits based mostly on all accounts held in the identical insurable capability at a financial institution, not simply money in Money Reserve. If shoppers elect to exclude a number of Program Banks from receiving deposits the quantity of FDIC insurance coverage accessible via Money Reserve could also be decrease. Shoppers are accountable for monitoring their whole belongings at every Program Financial institution, together with current deposits held at Program Banks exterior of Money Reserve, to make sure FDIC insurance coverage limits usually are not exceeded, which may end in some funds being uninsured. For extra data on FDIC insurance coverage please go to www.FDIC.gov. Deposits held in Program Banks usually are not protected by SIPC. For extra data see the complete phrases and situations and Betterment LLC’s Kind ADV Half II.