Which One Is Greatest For Investing?


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If you want a serving to hand with investing, Betterment and Acorns are two of the preferred apps you should use. One is a fully-fledged robo-advisor, whereas the opposite is a microsavings app with many similarities. But each require $0 to open an account and are excellent for brand new buyers.

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

That’s why our Betterment vs. Acorns breakdown is overlaying the options that you must know and how one can finally decide the proper investing possibility.

About Betterment

Betterment is a number one robo-advisor that was based in 2008. It presently has over 730,000 buyers and $33 billion in belongings beneath administration. And with a $0 funding requirement, it is a superb technique to make investments with a small sum of money.

About Acorns

AcornsFounded in 2012, Acorns is the preferred micro investing app available on the market. With over 9 million clients, 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

Both Betterment and Acorns make investments your cash in numerous portfolios that match your investing targets and threat tolerance. This is a foundational characteristic for robo-advisors and microsaving apps alike, and it is why Betterment and Acorns are perfect for passive buyers.

With Betterment, you possibly can put money into quite a lot of portfolios like:

  • Betterment Core Portfolio: Includes numerous Vanguard inventory and bond ETFs.
  • BlackRock Target Income Portfolio: A diversified basket of 100% bonds.
  • Goldman Sachs Smart Beta Portfolio: Another bond portfolio that is designed for retirees who need decrease threat.
  • Innovative Technology Portfolio: Includes corporations in sectors like robotics, AI, blockchain know-how, and different progressive industries.

You reply an investing questionnaire whenever you join. 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, earnings, targets, and threat tolerance. Like Betterment, you are free to decide on no matter portfolio you need no matter what the app suggests.

Currently, Acorns has 5 core portfolios you possibly can put money into:

  • Conservative: A mixture of authorities and company bonds.
  • Moderately Conservative: A roughly even cut up between shares and bonds.
  • Moderate: A wide range of massive, mid, and small cap shares plus some bond publicity.
  • Moderately Aggressive: Mostly massive cap shares and a few worldwide shares plus bonds.
  • Aggressive: A totally stock-based portfolio with some worldwide publicity.

However, Acorns solely invests in 12 completely 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 quite a lot of ETFs and bonds.

Betterment vs. Acorns – Management Fees

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

  • Betterment Fees: Betterment prices 0.25% in annual administration charges for accounts beneath $100,000 and 0.40% for premium accounts over $100,000. Premium clients additionally get entry to a human monetary advisor.
  • Acorns Fees: Acorns prices $3 or $5 per thirty days relying on the plan you select. The Personal plan, which prices $3 per thirty days, unlocks the principle investing characteristic plus options like retirement financial savings and Acorns checking. The $5 Acorns Family plan consists of the whole lot from the Personal plan in addition to Acorns Early, the app’s investing account for teenagers.

With its Personal plan, Acorns prices $36 per 12 months in administration charges. With Betterment, spending this a lot in annual charges requires investing roughly $15,000.

winner — Betterment is considerably less expensive for portfolios beneath $15,000 however progressively prices extra for bigger portfolios.

Betterment vs. Acorns – Minimum Investment

There’s a $0 funding requirement for Betterment and Acorns, so anybody can open an account. Once you make a deposit with Betterment, it begins investing your cash within the portfolios you choose. With Acorns, it might probably begin investing by rounding-up your spare change or by one-time or recurring investments. There’s a $5 minimal for one-time or recurring investments.

The major 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 robotically. This helps newbie buyers construct good habits and make investments robotically.

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

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

Betterment vs. Acorns – Account Types

With Betterment, you possibly can open quite a lot of account sorts, together with:

  • Roth, Traditional, and SEP IRA
  • Individual taxable accounts
  • Joint taxable accounts
  • Trust accounts
  • Betterment Cash Reserve
  • Betterment checking account

Currently, Betterment does not assist 529 accounts, custodial accounts, solo 401(okay)s, or self-directed accounts.

As for Acorns, eligible account sorts embody:

  • Roth, Traditional, and SEP IRA by Acorns Later
  • Individual taxable account
  • 401(okay) rollover
  • Custodial accounts by Acorns Family
  • Acorns checking account

The major 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 together with your accomplice whereas Acorns is healthier for instructing your youngsters how one can make investments.

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

Betterment vs. Acorns – ESG Investing

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

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

    • Broad Impact: Invests in ETFs that think about all ESG parts, together with moral labor, reducing carbon emissions, and extra firm range.
    • Climate Impact: Supports corporations making an effort to decrease carbon emissions and ones that fund inexperienced initiatives whereas divesting from holders of fossil-fuel reserves.
    • Social Impact: This portfolio helps corporations that promote minority empowerment and better gender range.

In distinction, Acorns has one ESG portfolio referred to as Acorns Sustainable Portfolios. This portfolio is powered by iShares BlackRock ETFs. But you possibly can select 4 completely 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

Both Betterment and Acorns provide automated portfolio rebalancing at no additional value. This means every firm can sell-off and buy completely different ETFs or bonds to maintain your portfolio composition aligned together with your general targets.

winner — Both platforms robotically rebalance portfolios.

Betterment vs. Acorns – Security

Both Betterment and Acorns are safe monetary companies that use encryption and security measures like two-factor authentication to assist shield your private and monetary info. Cash balances additionally get FDIC insurance coverage and as much as $500,000 in SIPC insurance coverage to your investments.

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

Betterment vs. Acorns – Other Unique Features

Betterment Unique Features

Some distinctive options you get as a Betterment buyer embody:

  • Betterment Cash 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: Enjoy 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 whenever you spend together with your Betterment Visa debit card.
  • Crypto Investing: Betterment does not presently assist crypto investing, nevertheless it’s coming to the platform since its acquisition of Makara. Look for automated crypto portfolio investing sooner or later for this robo-advisor.
  • Human Advice: Premium investing clients with portfolios over $100,000 get limitless calls and emails with Betterment’s crew of licensed monetary planners. Regular Digital investing clients with smaller portfolios may also purchase recommendation packages starting from $299 to $399 to assist with completely different areas of monetary planning, like retirement financial savings or school planning.
  • Planning Tools: Customers can use instruments like Betterment’s retirement planner or create goal-based investments and monitor their progress and web price with a centralized dashboard.
  • Tax-Loss Harvesting: Unlike 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 Cash Reserve APY Disclosure – The annual proportion yield (“APY”) on the deposit balances in Betterment Cash Reserve (“Cash Reserve”) is 0.75% and represents the weighted common of the APY on deposit balances on the banks collaborating in Cash Reserve (the “Program Banks”) and is present as of May 11, 2022. This APY is variable and topic to alter each 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 a minimal stability 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 Cash Reserve and doesn’t apply to checking accounts held by Betterment Checking. Cash Reserve and Betterment Checking are separate choices and usually are not linked accounts. 


Acorns Unique Features

  • Spare-Change Round-Ups: Acorns is without doubt one of the pioneers of the spare-change round-up technique of investing, and that is the inspiration of how the app helps you frequently make investments.
  • Acorns Checking Account: This fee-free checking account helps you robotically make investments your cash whenever you store. It additionally supplies 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 particular person plus from hundreds of on-line manufacturers.
  • Bits of Bitcoin ETF: Choose to put money into Bitcoin by Acorns and diversify as much as 5% of your portfolio in crypto. Acorns invests within the ProShares Bitcoin Strategy (BITO) so as to add BTC publicity to your portfolio with out having to really buy BTC by a crypto change.

Betterment Pros & Cons


  • Low annual administration charges
  • $0 funding requirement
  • Wider portfolio selection than Acorns, together with ESG portfolios
  • Betterment Cash Reserve account pays curiosity in your money deposits
  • Utilizes tax-loss harvesting


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

Acorns Pros & Cons


  • Helps new buyers construct good habits with common contributions
  • Lets you put money into crypto by Bits of Bitcoin
  • Custodial accounts can be found by Acorns Family
  • Simple pricing construction
  • Earn more cash with Acorns by 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
  • Monthly charges are very excessive for small account balances
  • Doesn’t make the most of tax-loss harvesting

Acorns vs. Betterment – Which Option Should You Choose?

We desire Betterment over Acorns if you would like extra portfolio choices and wish to persistently make investments cash with recurring deposits or by bigger lump-sum deposits. It’s additionally superior to Acorns if you would like extra ESG-friendly portfolios. In distinction, we desire Acorns over Betterment when you’re comparatively new to investing and wish a serving to hand with constructing good habits. But Betterment is our suggestion for long-term investing and retirement planning.

If something, you possibly can view Acorns because the coaching wheels to your investing bicycle. It’s a helpful app for studying how one can persistently make investments. And the very fact you possibly can open a custodial account to your youngsters can be a promoting level.

However, Acorns month-to-month pricing is steep for very small portfolios, which is a draw back since this app excels for brand new buyers. With Betterment, you might have secure, low charges and way more portfolio selection, making it a greater long-term investing answer than Acorns.

Bottom Line

Both Betterment and Acorns are helpful instruments for investing on autopilot. Choosing the proper possibility is determined by your targets, how a lot cash you are investing, and the way lengthy you intend on investing for as effectively.

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

Just examine Betterment’s charges to Acorns and see which app is less expensive. 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 Cash Reserve Disclosure – Betterment Cash Reserve (“Cash Reserve”) is obtainable by Betterment LLC. Clients of Betterment LLC take part in Cash Reserve by their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its associates is a financial institution. Through Cash 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. Cash Reserve supplies Betterment purchasers with the chance to earn curiosity on money meant to buy securities by Betterment LLC and Betterment Securities. Cash Reserve shouldn’t be seen as a long-term funding possibility. 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 period funds are eligible for FDIC insurance coverage however usually are not protected by SIPC. See Betterment Client Agreements for additional particulars. Funds deposited into Cash 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 if there are greater than 4 Program Banks, purchasers won’t essentially have deposits allotted in a way 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 primarily based on all accounts held in the identical insurable capability at a financial institution, not simply money in Cash Reserve. If purchasers elect to exclude a number of Program Banks from receiving deposits the quantity of FDIC insurance coverage out there by Cash Reserve could also be decrease. Clients are chargeable for monitoring their whole belongings at every Program Bank, together with present deposits held at Program Banks exterior of Cash Reserve, to make sure FDIC insurance coverage limits usually are not exceeded, which may end in some funds being uninsured. For extra info on FDIC insurance coverage please go to www.FDIC.gov. Deposits held in Program Banks usually are not protected by SIPC. For extra info see the total phrases and circumstances and Betterment LLC’s Form ADV Part II. 


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