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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.
4.0/5
Our 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
Rating
Rating image, 4.5 out of 5 stars.
4.5/5
Our 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
Commissions
Commissions
$3-$12 monthly
Commissions
$0 per trade, management fee of $4 per month or 0.25% per year
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.
Broker
Best For
Commissions
Learn More
Rating image, 4.0 out of 5 stars.
4.0/5
Our 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
4.0/5
Our 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
On
J.P. Morgan Self-Directed Investing's
Secure Website.
Rating image, 4.5 out of 5 stars.
4.5/5
Our 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
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.
4.0/5
Our 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.
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.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Bitcoin. The Motley Fool has a disclosure policy.
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J.P Morgan Disclosure INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Betterment disclaimers
†Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.
Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC's Form ADV Part II.
**The annual percentage yield ("APY") on the deposit balances in Betterment Cash Reserve ("Cash Reserve") is 4.00% and represents the weighted average of the APY on deposit balances at the banks participating in Cash Reserve (the "Program Banks") and is current as of Feb. 6, 2023. This APY is variable and subject to change daily. Deposit balances are not allocated equally among the participating Program Banks. A minimum deposit of $10 is required, but there is no minimum balance required to be maintained. The APY available to a customer may be lower if that customer designates a bank or banks as ineligible to receive deposits. APY applies only to Cash Reserve and does not apply to checking accounts held through Betterment Checking. Cash Reserve and Betterment Checking are separate offerings and are not linked accounts.
For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.
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