Charles Schwab vs. Betterment: Which Broker Is Right for You?
Review
Updated
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Schwab is a behemoth financial services company and full-service broker that offers a bevy of choices no matter what your level of investment savvy. Meanwhile, Betterment is a leader in robo-advisor services and simplifies things by limiting its investment menu to prebuilt portfolios.
Read on for a head-to-head comparison of Charles Schwab vs. Betterment, including commissions and fees, account types, and what you can invest in.
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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.
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= 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 |
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Commissions |
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Account Minimum |
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With Charles Schwab, you have plenty of investment options. You can choose from individual stocks, mutual funds, and fixed-income investments. Schwab offers trading and investing tools via its thinkorswim platforms, including live financial news, Level 2 stock data, and advanced charting. Schwab is best for investors who want control over their portfolios, while Betterment is a robo-advisor that is better suited for investors who don't want to be deeply involved with every aspect of their investments.
Charles Schwab offers a wide variety of low-cost investment options and account types, as well as apps and a desktop trading platform. Its selection of research and screening tools empower investors to make informed decisions.
Betterment is a robo-advisor that will manage your investment portfolio without you lifting a finger. Better yet, it's affordable. While Charles Schwab lets you choose from basically any security without commissions or fees, Betterment simplifies the investment process with its selection of prebuilt managed portfolios. If you're working toward a long-term investment goal and want a platform that will do most of the work for you, Betterment is a solid choice.
Investors who don't want to deal with hand-picking and monitoring stocks will appreciate the simplicity of Betterment's diversified portfolio offerings and automated tracking, rebalancing, and reinvestment. It costs just $10 to get started with Betterment, and as long as you maintain a minimum of $50 in your accounts, it will automatically rebalance your investments.
Charles Schwab and Betterment both get generally positive reviews online. Customers praise Betterment's attractive and easy-to-use user interface and like that they don't have to research funds or make manual adjustments to their portfolio. There are some complaints about Betterment's fees and some customers find it hard to get in touch with Betterment over the phone, but these issues don't seem to be deal breakers for many.
Charles Schwab customers love the company's customer support and low fees, with many reviews applauding its responsive and knowledgeable customer service agents. Many of Charles Schwab's negative reviews come from previous TD Ameritrade customers who reported issues with their accounts after Schwab acquired the brokerage firm.
| Charles Schwab | Betterment | |
|---|---|---|
| Stock & ETF commissions | $0 | N/A |
| Options commissions | $0.65 per contract | N/A |
| Crypto commissions | Depends on trade type | 1% |
| Mutual fund commissions | 4,000 no-load mutual funds with no transaction fees | N/A |
| Account transfer fee | $50 for full transfer out | $75 for outgoing transfer from an investing account |
| Account maintenance fee | $0 | 0.25% annual fee or $4 monthly membership |
Charles Schwab has no minimum investments or maintenance fees for its accounts, whereas Betterment charges a 0.25% annual fee or a $4 monthly membership. You'll be switched from the $4 monthly fee if your balance reaches $20,000 or you set up a recurring monthly direct deposit of $250. On a $10,000 investment, Betterment's 0.25% annual fee amounts to $25, which is reasonable.
It's not quite an apples-to-apples comparison. Betterment is a robo-advisor and proponent of passive investing. You can't select your own stocks or exchange-traded funds (ETFs). Once you sign up, you'll answer questions about your goals and choose from around a dozen premade ETF portfolios. You only need $10 to get started. Betterment will then automatically rebalance your investments as needed if you have at least $50 in your accounts.
Schwab also offers robo-advisor services through its Schwab Intelligent Portfolios -- but there's a $5,000 minimum. Though there's no advisory fee, the upfront minimum could be a high barrier if you're a beginning investor who wants to put things on autopilot.
Both brokerages also offer access to human advisors. Schwab customers with at least $25,000 invested can upgrade to Schwab Intelligent Portfolios Premium® and get unlimited access to a team of Certified Financial Planners™ on top of robo-advisory services. But the premium plan also requires a $300 one-time planning fee and a $30 monthly advisory fee. Betterment Premium also gives you CFP® access, but you'll need at least a $100,000 balance and pay a 0.65% annual management fee.
| Charles Schwab | Betterment | |
|---|---|---|
| Stocks and ETFs | Yes | Yes (through managed portfolios) |
| Fractional shares | Yes | No |
| Options | Yes | No |
| Mutual funds | Nearly 17,000 (4,000 no-load, no-transaction fee funds) | No |
| CDs | Yes | No |
| Bonds | Yes | Yes (through managed portfolios) |
| Futures | Yes | No |
| Crypto | Yes | No direct trading (crypto managed portfolios are available) |
| Currencies | Yes | No |
Schwab is clearly the better platform for DIY investors. You can invest in pretty much any security under the sun, including individual stocks, bonds, mutual funds, and ETFs, and you have the ability to trade options.
You can also invest in ETFs and mutual funds with crypto exposure, including new spot Bitcoin ETFs that won U.S. Securities Exchange Commission (SEC) approval in January 2024. While spot trading of cryptocurrency isn't available at the time of this writing, you can trade cryptocurrency futures contracts directly.
Your choices are a lot simpler with Betterment: You can't invest in individual securities; you'll choose from prebuilt managed portfolios instead. Its Core Portfolio, which consists of thousands of stocks and bonds, is a solid choice if you're investing for retirement. You can also choose a 100% bond portfolio for fixed income or a high-yielding Betterment Cash Reserve account.
Other Betterment portfolios focus on certain themes, like technology, climate change, and undervalued stocks. The robo-advisor also offers a fully automated crypto ETF portfolio.
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 2025.
| Broker | Best For | Commissions | Learn More |
|---|---|---|---|
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 |
Managing your finances under one roof | $0 for stocks,¹ $0 for options contracts⁴ |
Learn More for SoFi Active Investing
On SoFi Active Investing's Secure Website. |
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 |
Low mutual fund fees. | $0 per trade |
Learn More for J.P. Morgan Self-Directed Investing
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 |
Low fees on stocks, ETFs, crypto, and options | $0 for stocks, ETFs, and options |
Learn More for Robinhood
On Robinhood's Secure Website. |
| Charles Schwab | Betterment | |
|---|---|---|
| Taxable brokerage | Yes | Yes |
| Joint tenant | Yes | Yes |
| Margin | Yes | No |
| Robo-advisor | Yes | Yes |
| Traditional IRA | Yes | Yes |
| Roth IRA | Yes | Yes |
| Other IRA | SEP IRA, SIMPLE IRA, rollover IRA, custodial IRA, beneficiary IRA | SEP IRA, beneficiary IRA |
| Custodial | Yes | No |
| Checking | Yes | Yes |
| Savings | Yes | No |
| Credit card | Yes | No |
Unsurprisingly, Schwab offers more types of investment accounts than Betterment -- but Betterment still has a robust selection of accounts, including individual and joint brokerage accounts, Roth and traditional IRAs, and SEP IRAs (for self-employed people). At Schwab, you'll find all of the above, plus a wider selection of retirement accounts. Schwab also offers some of the best custodial accounts for minors.
One area where Betterment stands out is its Betterment Cash Reserve account, which pays nearly 10 times the national average savings account APY as of this writing. Though Schwab offers the Schwab Bank Investor Savings™, it only pays an average APY.
Schwab's primary platforms are Schwab.com and the Schwab mobile app that allow you to manage your account and access investing and trading tools, and the thinkorswim platforms available through desktop and a mobile app. These offer charting and trading tools.
The thinkorswim platforms are tailored specifically for active traders with live financial news, Level 2 stock data, and advanced charting. You can also use thinkorswim's paperMoney® Virtual Stock trading to simulate trades without putting actual money at risk.
Betterment also lets you manage your account through its desktop version or top-rated app. You can transfer money, manage your account, and connect outside accounts to track your overall financial picture with either platform.
But because Betterment is designed for passive investing and isn't a stock trading brokerage, its platforms don't provide real-time market information or trading simulations. You will find limited educational resources on Betterment's website, though.
Charles Schwab and Betterment are top robo-advisors, though Betterment's low minimum investment makes it easier for beginning investors to get started with automated investing. Schwab offers robo-advisor portfolios, but the $5,000 minimum to create one may be a difficult hurdle.
You'll get far more investment options with Schwab, though. You can invest in practically any security of your choosing and avoid commissions and fees. If you're a DIY investor, Schwab is clearly the better choice. But if you're a mostly hands-off investor who's investing with retirement or another long-term goal in mind, Betterment deserves consideration, particularly if you crave simplicity.
Charles Schwab pioneered the low-cost brokerage model decades ago, and that legacy continues with its lineup of no-commission-fee offerings. The robust lineup of account types, investment vehicles, and high quality app round out the stacked feature set.
$0 stock, ETF, and Schwab Mutual Fund OneSource® trades. No fees to buy fractional shares.
$0
Betterment is a good fit for passive investors who want to put their investments on cruise control at a low cost. Betterment also offers a great cash management account with a high APY.
$0 per trade, management fee of $4 per month or 0.25% per year
$0
At Motley Fool Money, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and user experience; however, we also take into account features like research, education, tax-loss harvesting, and customer service. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.
See our full methodology here: Ratings Methodology
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands. Terms may apply to offers listed on this page.
SoFi Disclosure:
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
Value Prop Disclosures
Promotion Disclosures
Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.
Investing is risky. Bonus offers subject to terms and conditions, visit robinhood.com/hoodweek for more information. Margin is not suitable for all investors. Robinhood Gold is offered through Robinhood Gold LLC and is a subscription offering services for a fee. Brokerage services offered through Robinhood Financial LLC (member SIPC), a registered broker dealer.
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.
