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Betterment

Betterment

UNVERIFIED PLATFORM

4.6

(5 Reviews)

Robo Advisor

Betterment

Betterment

Whether you're new to investing or a seasoned pro, it's time to partner with a company that believes you could and should be getting more from your money.

Join investors

UNVERIFIED PLATFORM

Highlights

+4.12%

Asset Class Return30d

#37 Rank

In Robo Advisor30d

avatars

Invest from

$1

Overview

Betterment helps you manage your money through cash management, guided investing, and retirement planning. They are a fiduciary, which means they act in your best interest. For your long-term financial needs (like retirement, next year's vacation, or a down payment), their investment strategy is built on low-cost ETFs (exchange-traded funds) and a risk profile based on how long you plan to invest. For your daily saving and spending, you can use their cash management products that include Checking (which they partner with nbkc bank to offer) and Cash Reserve, a high-yield cash account.

 

Their platform combines powerful technology with personalized advice developed by a passionate team of experts. When you have questions, their Customer Support team is ready to help you with account questions and troubleshooting. They help you manage the full spectrum of your money, together in one place for a low, transparent cost. Even if you don't fund, they provide advice on your existing outside accounts, as they help you compile your full financial picture.

Things to Know

  • You make money on

    Value + Dividends

  • Fees

    0.25%

  • Min Investment

    $1

  • Payout frequency

    Quarterly

  • Term of investment

    Zero

  • Target Return

    Varied

  • Liquidity

    Easy

  • Open to

    All Investors

  • Mobile Application

    iOS, Android

Top Perks

  • Potentially 38.8% extra post-tax retirement cash.

  • Fractional shares mean all your cash is invested

  • Robust goal-based tools

How you make money

Betterment combines powerful technology with personalized advice developed by their passionate team of experts. For your long-term financial needs (like retirement, next year's vacation, or a down payment), their investment strategy is built on low-cost ETFs (exchange-traded funds) and a risk profile based on how long you plan to invest. For your daily saving and spending, you can use their cash management products that include checking (which they partner with nbkc bank to offer) and cash reserve, a high-yield cash account.

How Betterment makes money

Betterment makes money in four simple ways:

  1. Their flat management fee for investing and advice—0.25% for most customers, 0.40% for their Premium advice plan.
  2. Their over-the-phone advice packages, which cost between $199 and $299 per package.
  3. Payments from Cash Reserve program banks, which Betterment expects will result in annualized revenue of more than 0% but less than 0.25% of the average, aggregate balance of the daily program deposits at program banks.
  4. Finally, for Checking, Betterment Financial LLC receives a portion of interchange fees from merchants whenever you use your debit card (just like any bank or credit union), and a small portion of the net interest margin from deposits in your account. Checking will be provided by Betterment Financial LLC, in partnership with nbkc bank.

They don't earn revenue from any funds they've selected for your portfolio. They also don't make money in their trading practices. That's all because they're built to align Betterment's interests with your own.

Is it safe?

Betterment was established over a decade ago, and now has over 700,000 investors and over $33 billion under management. They have undergone multiple funding rounds, raising $435 million to date, with a current valuation of just under $1.3 billion.

 

In addition, they're a fiduciary—they are required by law to act in your best interests and they're intentional about avoiding conflicts of interest. For instance, they don't build their own funds and then recommend them to their own customers if it's not in their best interest.

 

Betterment Securities is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). With their cash management products, your money is insured by the FDIC. Individual Cash Reserve accounts have insurance up to $1,000,000 and joint Cash Reserve accounts offer up to $2,000,000 in FDIC Insurance. Checking is insured up to $250,000 through nbkc bank and is provided by Betterment Financial LLC. What you should remember is that the SPIC does not protect against market changes in your account. The risks inherent in investing are tradeoffs you make to pursue investment returns. Betterment designs their portfolio to aim for the highest projected returns given your risk level.

  • Established

    2008

  • Country Available

    US Only

  • Assets Managed

    $33B

How You’re Taxed

Capital Gains

Capital Gains

As with any stock realized stock gains, investors are subject to capital gains tax. If gains are realized within one year, you are taxed at your income tax rate. If gains are realized after one year, you are subject to a long-term capital gains tax of 0% to 20%. A common service that some robo-advisors offer through their systems is automatic tax-loss harvesting. Tax-loss harvesting is a deliberate strategy whereby any loss from the sale of a security in a taxable account is used to offset a capital gain or taxable income, thereby reducing the tax paid.

Reviews

4.6
  • 5

    3

  • 4

    2

  • 3

    0

  • 2

    0

  • 1

    0

Reviews (5)
J

Jesse

It's weird to get excited about saving my money, but betterment keeps me organized and I love visualizing how my money is being split into different goals.

R

Robert B.

Been great. Easy deposit and transfer.

C

Clement

Clean app but it lacks some functionality compared to the website.

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