Which One Is Best For Investing?

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When you want a serving to hand with investing, Betterment and Acorns are two of the preferred apps you need to use. 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 spanking new traders.

Nonetheless, choosing the proper platform to speculate with is determined by your targets, how a lot you are investing, and timeframe.

That is why our Betterment vs. Acorns breakdown is overlaying the options it’s essential to know and tips on how to finally decide the appropriate investing possibility.

About Betterment

Betterment is a number one robo-advisor that was based in 2008. It presently has over 730,000 traders and $33 billion in belongings underneath administration. And with a $0 funding requirement, it is a wonderful technique to make investments with a small amount of cash.

About Acorns

AcornsBased in 2012, Acorns is the preferred micro investing app available on the market. With over 9 million prospects, Acorns helps tens of millions 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 targets and threat 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 possibly can put money into a wide range of portfolios like:

Betterment Core Portfolio: Consists of varied Vanguard inventory and bond ETFs.
BlackRock Goal Revenue Portfolio: A diversified basket of 100% bonds.
Goldman Sachs Sensible Beta Portfolio: One other bond portfolio that is designed for retirees who need decrease threat.
Modern Expertise Portfolio: Consists of corporations in sectors like robotics, AI, blockchain expertise, and different modern industries.

You reply an investing questionnaire whenever you enroll. From there, Betterment builds a portfolio of low-cost ETFs and bonds that matches your targets and threat 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, revenue, targets, and threat 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 possibly can put money into:

Conservative: A mixture of authorities and company bonds.
Reasonably Conservative: A roughly even break up between shares and bonds.
Average: Quite a lot of giant, mid, and small cap shares plus some bond publicity.
Reasonably Aggressive: Largely giant cap shares and a few worldwide shares plus bonds.
Aggressive: A very stock-based portfolio with some worldwide publicity.

Nonetheless, Acorns solely invests in 12 totally different ETFs throughout all portfolios, so it is extra restricted versus Betterment’s portfolios.

winner — Betterment has extra portfolio selection than Acorns, however each platforms put money into a wide range of ETFs and bonds.

Betterment vs. Acorns – Administration Charges

One primary distinction between Betterment and Acorns are the charges you pay:

Betterment Charges: Betterment expenses 0.25% in annual administration charges for accounts underneath $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 per 30 days relying on the plan you select. The Private plan, which prices $3 per 30 days, unlocks the principle investing characteristic plus options like retirement financial savings and Acorns checking. The $5 Acorns Household plan consists of every part from the Private plan in addition to Acorns Early, the app’s investing account for teenagers.

With its Private plan, Acorns prices $36 per yr in administration charges. With Betterment, spending this a lot in annual charges requires investing roughly $15,000.

winner — Betterment is considerably cheaper for portfolios underneath $15,000 however regularly prices extra for bigger portfolios.

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 by means of 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 fashion is that this round-up characteristic. For instance, if you 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 mechanically. This helps newbie traders construct good habits and make investments mechanically.

You may also create automated deposits with Betterment if you wish to make investments often. The robo-advisor helps you to arrange weekly, biweekly, and month-to-month deposits. You may also arrange two deposits on particular days per 30 days, which is ideal for investing cash proper after your paycheck deposits. Lastly, one-time deposits are additionally out there.

winner — Each Betterment and Acorns have a $0 funding requirement and are very beginner-friendly.

Betterment vs. Acorns – Account Varieties

With Betterment, you possibly can open a wide range of account varieties, 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(okay)s, or self-directed accounts.

As for Acorns, eligible account varieties embrace:

Roth, Conventional, and SEP IRA by means of Acorns Later
Particular person taxable account
401(okay) rollover
Custodial accounts by means of 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 healthier for instructing your youngsters tips on how to make investments.

winner — Betterment is healthier for {couples} with its joint account whereas Acorns provides custodial accounts.

Betterment vs. Acorns – ESG Investing

If you wish to put money into corporations that worth environmental and social nicely being, ESG investing is for you. However not each robo-advisor or microsavings app provides ESG centered portfolios.

Fortunately, each Betterment and Acorns have ESG choices you possibly can discover. However Betterment is actually superior because it has three socially accountable investing (SRI) portfolios:

Broad Influence: Invests in ETFs that take into account all ESG elements, together with moral labor, decreasing carbon emissions, and extra firm variety.
Local weather Influence: Helps corporations making an effort to decrease carbon emissions and ones that fund inexperienced initiatives whereas divesting from holders of fossil-fuel reserves.
Social Influence: This portfolio helps corporations that promote minority empowerment and higher gender variety.

In distinction, Acorns has one ESG portfolio known as Acorns Sustainable Portfolios. This portfolio is powered by iShares BlackRock ETFs. However you possibly can select 4 totally different portfolio types, starting from reasonably conservative to aggressive, equally to common Acorns portfolios.

winner — Betterment has extra ESG portfolio choices than Acorns.

Betterment vs. Acorns – Portfolio Rebalancing

Each Betterment and Acorns supply automated portfolio rebalancing at no further value. This implies every firm can sell-off and buy totally different ETFs or bonds to maintain your portfolio composition aligned along with your total targets.

winner — Each platforms mechanically rebalance portfolios.

Betterment vs. Acorns – Safety

Each Betterment and Acorns are safe monetary providers 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 in your investments.

winner — Betterment and Acorns are each safe and supply FDIC and SIPC insurance coverage.

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 wonderful 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: Take pleasure in 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 1000’s of manufacturers whenever you spend along with your Betterment Visa debit card.
Crypto Investing: Betterment does not presently help crypto investing, but it surely’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 group of licensed monetary planners. Common Digital investing prospects with smaller portfolios may also purchase recommendation packages starting from $299 to $399 to assist with totally different areas of monetary planning, like retirement financial savings or school planning.
Planning Instruments: Clients can use instruments like Betterment’s retirement planner or create goal-based investments and observe their progress and internet price 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 scale back a few of your capital positive aspects.

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 taking part in Money Reserve (the “Program Banks”) and is present as of Might 11, 2022. This APY is variable and topic to alter each day. Deposit balances are usually not allotted equally among the many taking part Program Banks. A minimal deposit of $10 is required, however there isn’t any minimal steadiness required to be maintained. The APY out there 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 by means of Betterment Checking. Money Reserve and Betterment Checking are separate choices and are usually not linked accounts. 


Acorns Distinctive Options

Spare-Change Spherical-Ups: Acorns is among the pioneers of the spare-change round-up technique of investing, and that is the inspiration of how the app helps you often make investments.
Acorns Checking Account: This fee-free checking account helps you mechanically make investments your cash whenever 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 whenever you store from 350+ manufacturers in individual plus from 1000’s of on-line manufacturers.
Bits of Bitcoin ETF: Select to put money into Bitcoin by means of 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 by means of a crypto trade.

Betterment Professionals & Cons


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


It is advisable to pay for monetary recommendation or have a portfolio over $100,000
Custodial accounts aren’t out there

Acorns Professionals & Cons


Helps new traders construct good habits with common contributions
Enables you to put money into crypto by means of Bits of Bitcoin
Custodial accounts can be found by means of Acorns Household
Easy pricing construction
Earn more cash with Acorns by means of the Acorns Earn program


Not as many portfolio choices as Betterment
Portfolios are much less diversified than Betterment and solely put money into 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 Choice Ought to You Select?

We want Betterment over Acorns if you’d like extra portfolio choices and want to constantly make investments cash with recurring deposits or by means of 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 when you’re comparatively new to investing and wish a serving to hand with constructing good habits. However Betterment is our advice for long-term investing and retirement planning.

If something, you possibly can view Acorns because the coaching wheels in your investing bicycle. It is a helpful app for studying tips on how to constantly make investments. And the very fact you possibly can open a custodial account in your youngsters can also be a promoting level.

Nonetheless, Acorns month-to-month pricing is steep for very small portfolios, which is a draw back since this app excels for brand spanking new traders. With Betterment, you have got steady, low charges and way 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. Selecting the best possibility is determined by your targets, how a lot cash you are investing, and the way lengthy you intend on investing for as nicely.

Acorns is a wonderful app for newbie traders because it teaches the facility of standard investing and compound curiosity. And Betterment is considered one of our favourite robo-advisors due to its low price construction and portfolio selection.

Simply examine Betterment’s charges to Acorns and see which app is cheaper. And take into consideration the varieties of portfolios you wish 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 by means of their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its associates is a financial institution. By Money Reserve, purchasers’ 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 purchasers with the chance to earn curiosity on money meant to buy securities by means of Betterment LLC and Betterment Securities. Money Reserve shouldn’t be seen as a long-term funding possibility. Funds held in your brokerage accounts are usually 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 period funds are eligible for FDIC insurance coverage however are usually 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, purchasers won’t essentially have deposits allotted in a fashion that may 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 purchasers elect to exclude a number of Program Banks from receiving deposits the quantity of FDIC insurance coverage out there by means of Money Reserve could also be decrease. Shoppers are liable 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 are usually not exceeded, which may lead to some funds being uninsured. For extra data on FDIC insurance coverage please go to www.FDIC.gov. Deposits held in Program Banks are usually not protected by SIPC. For extra data see the total phrases and circumstances and Betterment LLC’s Type ADV Half II. 

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