Betterment and Acorns are two popular financial services that aim to automate saving and investing for their users. But what happens when you compare Betterment vs. Acorns head to head?
With $0 account minimums, automated portfolio management, and several investment accounts, the platforms have a lot in common.
While both companies offer similar features, there are some key differences to consider as well. Read on for a comparison of Betterment and Acorns’ features, cost, and customer experience to decide which app is right for you.
|Robo Advisor Quality||Provides more flexibility and easier goal tracking||Better if you’re beginning or just want a way to put your spare change to use|
|Mobile Banking||Debit card and mobile money management plus a high-yield savings option||Debit card and mobile money management|
|Promotions & Rewards||Up to 1 year of free portfolio management for referrals||$5 bonus for referrals|
|Pricing||$4/month or 0.25% annual fee||$3 – $5/month|
|Customer Support||Direct one-on-one access to advisors, plus chat & phone support||Phone support, email, & chat, but no advisory services|
|App Performance||Secure, full encryption, identity verification, & fraud protection||Secure, full encryption, identity verification, & fraud protection|
Betterment is a mobile investing app and a robo-advisor service. It also offers access to checking and savings accounts, taxable accounts, and tax-friendly accounts.
Betterment launched in 2008. In 2023, the platform has over $36 billion in assets under management (AUM) and upwards of 775,000 customers.
Like Betterment, the Acorns app funnels money into investing, checking, and retirement accounts. It specializes in taking found money, or spare change, and putting it to work on your behalf.
Acorns was a bit later to the game than Betterment, entering the market in 2014.
The company now has more than 8.2 million customers and over $4.7 billion in assets under management.
Betterment vs Acorns: Features
Here’s an overview of Betterment and Acorns’ key features:
- Automated investing: Betterment is a top hands-off investment option. Betterment will assess your financial situation and goals to make investment decisions on your behalf. It builds customized portfolios with low-cost, diversified exchange-traded funds (ETFs), which are one of the least risky asset classes.
- Tax Loss Harvesting: Tax-loss harvesting involves selling investments at a loss to offset capital gains taxes. This is a sophisticated strategy that individual investors shouldn’t attempt on their own. Betterment offers tax-loss harvesting on investment accounts, whereas Acorns doesn’t. The feature is known as TLH+.
- Goal tracking: This tool helps you set financial goals and monitor your progress. You can customize goals like a family vacation then connect outside accounts, schedule deposits, and calculate how to reach your target with a goal forecaster.
- All-in-one financial dashboard: Betterment provides an all-in-one financial dashboard that makes it easy to see your net worth, connect outside accounts, view performance, and track savings progress. You can also add shared accounts and track deposits, spending, and transfers.
- Betterment Rewards: When you use the Betterment Visa Debit Card, you can receive cashback rewards from brands and retailers like Adidas, Walmart, Staples, and Dunkin.
- Round-ups: Acorns invests spare change through the Round-Up program. When you make a purchase, Acorns can round up the amount of money you spend to the nearest dollar and set aside the remaining amount for investing.
- Automated investing: Anytime you invest spare change, the company puts the money into diversified ETF portfolios with optimal expense ratios. Acorns provide automatic rebalancing for ongoing performance optimization.
- Smart deposit: In addition, Acorns has a smart deposit feature, which pulls money from a direct deposit for investing.
- Learning resources: Acorns has a library filled with educational resources that you can use to learn more about investing.
- Acorns Sustainable Portfolios (ESG Investing): Acorns offers ESG (environmental, social, and governance) investing or socially responsible investing. Acorns offers a Sustainable Portfolios feature that automatically disperses your funds across ESG-friendly assets.
- Acorns Earn: Acorns Earn is a Chrome extension that unlocks special discounts when you shop online at over 15,000 retailers. Similar to how you can earn cash back with the Betterment Visa Debit Card, you have to spend money to earn rewards.
Betterment vs Acorns: Accounts
Both Betterment and Acorns have several account types to choose from:
- IRAs and 401(k)s: Betterment offers several tax-friendly retirement accounts, including traditional IRAs, Roth IRAs, SEP IRAs, and rollovers. It has a goal-based investment allocation system and features a tax coordination tool, which increases after-tax returns on retirement money.
- Brokerage account: Betterment also offers taxable investment accounts, with joint and individual accounts available.
- No-fee checking: In addition to investing, Betterment offers a no-fee checking service with a tap-to-pay Visa debit card and access to Apple Pay and Google Pay. Your funds are FDIC insured through a partnership with NBKC Bank, up to $250,000 per account.
- Cash Reserve: Betterment also provides access to a no-fee, high-yield account with a current APY of 4.50%. You can automate savings for specific goals and access spending analysis and guidance. Betterment now offers joint Cash Reserve accounts, with up to $4 million in FDIC insurance.
- IRAs: With Acorns Later, you can invest for retirement with a Roth, Traditional, or SEP IRA. Acorns will ask questions to help you pick the right account for your needs. Acorns Later provides age-based portfolios, a Smart Deposit feature that automates contributions from your paycheck.
- Brokerage account: Acorns also offers individual taxable investment accounts and an Acorns Early investment custodial account for kids.
- Acorns Checking: With Acorns Checking, you can store money, make direct deposits, transfer funds, and send checks, with no minimum balance. You’ll also receive a tungsten metal debit card. Acorns accounts are backed by Lincoln Savings Bank and NBKC Bank. Unlike Betterment, Acorns doesn’t offer a high-yield savings account.
Betterment vs Acorns: Pricing & Fees
Betterment and Acorns’ fee structures operate a bit differently.
- Betterment Checking and Cash Reserves: No monthly fees
- Crypto Trading: 1% fee, plus some trading fees
- Investing: $4 per month, or 0.25% annual fee with $250 monthly direct deposits or #20,000 balance across Betterment accounts
Betterment can help grow your money by making saving and investing easy. Invest in a tailored portfolio, set buckets for your goals, and earn rewards.
Acorns charges a monthly management fee with two subscription levels to choose from. The Personal Plan is $3 per month and provides access to Acorns’ retirement, investment, and checking account.
At $5 per month, the Family Plan provides access to Acorns Early accounts for kids.
It’s hard to look past Betterment’s free package, which provides access to a checking account, high-yield savings, and planning tools. Ultimately, you get more without having to spend any hard-earned cash.
Betterment charges more for its paid managed services, with an annual fee of 0.40%. However, Betterment offers more robust investing services, so it’s worth it for serious investors.
Price: $3 per month
Easily save & invest in the background of life. Invest your spare change, save for retirement, spend smarter, earn more, and grow your knowledge.
Betterment vs Acorns: Robo Advisor Services
Both Betterment and Acorns offer robo-advisory services for automated investing.
Of the two, Betterment is a better option for serious investors who want to maximize their returns because the platform provides more flexibility and easier goal tracking.
Acorns is a better option if you’re beginning or just want a way to put your spare change to use.
Betterment vs Acorns: Sign-Up Process
Both Acorns and Betterment are super-easy to use. With both services, all you have to do is sign up, download the app, and link your bank accounts.
Neither app requires a lengthy approval process or credit pull. As long as you live in the U.S., are 18 years old, and have a valid Social Security number and email address, you should be able to start using these apps in a matter of minutes.
Betterment vs Acorns: Customer Support
Acorns provides phone support at 855-739-2859, 24/7 live chat, and email tickets. However, the company doesn’t provide access to human advisors or offer direct financial advice.
For this reason, my vote goes to Betterment for customer support. The company provides direct one-on-one access to advisors.
In addition, Betterment offers technical support via chat and over the phone at 718-400-6898.
Betterment vs Acorns: Apps
Both Betterment and Acorns’ mobile apps are highly rated by Android and Apple users.
No app is perfect, and you’re bound to experience some issues from time to time regardless of which version you’re using. However, both apps are pretty solid and trustworthy.
Both apps are also very secure, with full encryption, identity verification, and fraud protection.
Out of the two apps, I prefer the mobile experience on Acorns because it’s highly effective at helping you save and invest extra money. So if you’re looking to optimize your savings strategy, you can’t go wrong with Acorns.
Alternative Investment Platforms To Consider
Here are alternative investment platforms to consider.
- Wealthfront: Wealthfront is an automated investing and savings app that caters to customized portfolios. You can either build a portfolio yourself or let Wealthfront handle the job for you.
- Robinhood: Robinhood offers commission-free investing over a user-friendly app. When you sign up for Robinhood, the company will send you a free share of stock. Robinhood is generally for beginner investors who want to dip their toes into the market.
- BlackRock: BlackRock is a leading asset manager that provides access to a wide array of funds and portfolios. The company offers great mutual funds and ETFs, among other products.
- Vanguard: Vanguard offers low-cost, high-performing index funds. If you’re looking for funds that can give you broad market exposure and solid long-term growth, you should strongly consider Vanguard.
Frequently Asked Questions
Here are the most frequently asked questions about Betterment vs. Acorns.
How does Acorns work?
Acorns rounds up each transaction to the nearest dollar, taking the “spare change” and automatically investing it on your behalf. For example, if you buy something for $7.12, Acorns will invest 88 cents for you, and the total transaction will show up as $8 on your statement.
Acorns offers a way to passively invest without having to manually transfer money. This is a very convenient feature for new investors and people who simply want to invest more without doing any legwork.
Is Acorns worth it?
At $3-$5 per month, Acorns can be worth it if you’re looking for a user-friendly simplified investing experience with a highly-reviewed robo-advisor.
The only real downside to Acorns is that it doesn’t offer much control over investments. For example, you can’t buy individual stocks, fractional shares, government bonds, corporate bonds, real estate, or cryptocurrencies.
What is a robo-advisor?
A robo-advisor is an investment algorithm that automatically allocates assets on your behalf. Robo-advisors study your overall financial situation to learn your goals and automatically invest to help reach your target objectives.
It’s a cost-effective alternative to working with a digital or in-person financial advisor. The best robo-advisors can help you diversify your portfolio without stressing your risk tolerance.
Does Betterment have account minimums?
Betterment does not have any account minimums to open a new account or start investing. However, investment accounts are required to have at least $50 to enable rebalancing.
The Bottom Line
Betterment and Acorns are top-rated financial planning and investment apps.
Both can help you build an investment portfolio and generate passive income from the stock market with very little effort on your end.
Acorns is better for beginners who are looking to save extra money, while Betterment is well-suited for experienced investors that have more capital. However, you can’t go wrong with either one, and there’s no rule that says you can’t use both.
Whatever you decide, if you’re investing and saving money that you would have otherwise spent, you’re already headed in the right direction.