This Betterment Review breaks down how one of the first robo-advisors continues to shape modern investing. With personalized portfolios and tax-efficient tools, it promises smarter returns. Here’s what you need to know before signing up.
Betterment Review: Quick Stats
- Founded: 2008, New York City
- Assets Under Management: $50+ billion
- Active Users: 900,000+
- Management Fee: 0.25% annually (Digital); 0.65% annually (Premium)
- Account Minimum: $10 to start investing
- Headquarters: New York, NY
- Regulatory Status: SEC-registered investment advisor, FINRA/SIPC member
Best For:
✅ Beginners seeking automated, hands-off investing
✅ Goal-focused investors (retirement, house, emergency fund)
✅ Socially responsible investors (3 SRI portfolios)
✅ Those wanting optional human CFP access ($100K+ for Premium)
✅ Investors prioritizing tax-loss harvesting
✅ Cash management with high APY (3.75%)
Not Ideal For:
❌ Active traders wanting sophisticated charting tools
❌ Investors seeking lowest possible fees (Vanguard 0.15%)
❌ Those needing 529 college savings plans (not offered)
❌ Advanced investors wanting direct indexing
❌ International investors (US only)
What is Betterment?
Betterment is an American SEC-registered investment advisor and financial advisory company founded in 2008 that provides digital investments, retirement, and cash management services. As one of the first robo-advisors, Betterment pioneered automated investing for everyday Americans.
Betterment has over $65B in assets under management and more than 1,000,000 customer accounts as of 2025. The platform combines low-cost automated investing with goal-based planning tools and sophisticated tax optimization.
Two Service Tiers
Betterment Digital (0.25% fee)
- Automated portfolio management
- Goal-based investing tools
- Tax-loss harvesting (TLH+)
- Email and live chat support
- Access to financial planning resources
Betterment Premium (0.65% fee, $100K minimum)
- All Digital plan features
- Unlimited phone access to certified financial planners (CFPs)
- Financial planning for assets outside Betterment
- Priority customer service
- Enhanced Cash Reserve APY boost (0.25% additional)
- 20% discount on Trust & Will estate planning
Betterment remains a stellar performer in Bankrate’s reviews of the top robo-advisors, offering key features such as portfolio management alongside premium ones such as tax-loss harvesting—all at a competitive price. Unlike competitors, Betterment offers the broadest range of expert-curated portfolio strategies (12+ options) and goal-based planning that makes it especially beginner-friendly.
Pricing and Fees
Betterment Digital
Management Fee: 0.25% annually for the Digital plan
Monthly Fee Option: $4 per month for accounts under $20,000 without recurring deposits of $250+
Example Costs:
- $1,000 balance: $48/year ($4/month) = 4.8%
- $10,000 balance: $48/year ($4/month) = 0.48%
- $20,000+ balance: $50/year (0.25%) = 0.25%
- $100,000 balance: $250/year = 0.25%
How to Avoid $4/Month Fee:
- Maintain $20,000+ across all Betterment accounts
- OR set up automatic deposits of $250+/month
Betterment Premium
Management Fee: 0.65% annual fee, requires minimum $100,000 balance
Note: The premium plan charges 0.65 percent of assets (up from 0.4 percent previously)
Premium Benefits Worth the Extra 0.40%:
- Unlimited CFP consultations (phone, scheduled calls)
- Financial planning for ALL assets (not just Betterment)
- Backdoor Roth IRA conversion guidance
- Tax-efficient asset transfer strategies
- Retirement income planning
- 0.25% APY boost on Cash Reserve (Premium clients only)
Additional Costs
ETF Expense Ratios: 0.06-0.20% annually (industry-low, varies by portfolio)
Crypto Portfolio: 1% management fee (higher than standard portfolios)
No Hidden Fees
Zero fees for:
- Account opening or closing
- Deposits or withdrawals
- Rebalancing (automatic)
- Trading commissions
- Transfer fees (incoming over $5,000)
Account Types Available
Retirement Accounts (IRAs)
Betterment offers Traditional, Roth, and SEP IRAs for individual retirement savings with annual advisory fees of 0.25% for standard plan and 0.40% for Premium plan
Traditional IRA
- Pre-tax contributions
- Tax-deferred growth
- Required minimum distributions (RMDs) at age 73
Roth IRA
- After-tax contributions
- Tax-free growth and withdrawals
- No RMDs
- Income limits apply
SEP IRA
- For self-employed and small business owners
- Higher contribution limits ($69,000 for 2025)
Rollover IRA
- Transfer 401(k) from former employers
- Streamlined rollover process
Taxable Accounts
- Individual investment accounts
- Joint accounts
- Trust accounts
Cash Management
Cash Reserve Account
- As of September 23, 2025, the APY offered for Cash Reserve is 3.75%
- FDIC insurance up to $2 million at program banks ($4 million for joint accounts)
- No monthly fees
- No minimum balance (after $10 initial deposit)
- Unlimited withdrawals
Betterment Checking
- Debit card with no fees
- ATM fee reimbursements
- No overdraft fees
- Mobile check deposits
What Betterment DOESN’T Offer
❌ 529 College Savings Plans (major gap vs. Wealthfront)
❌ HSA (Health Savings Accounts)
❌ Custodial accounts (UGMA/UTMA)
Investment Philosophy and Portfolio Options
Core Investment Strategy
Betterment uses Modern Portfolio Theory (MPT) with passive index investing through low-cost ETFs. Betterment focuses on a goal-based investing approach, allowing users to allocate funds toward specific financial objectives such as retirement savings, homeownership, or general wealth accumulation.
12+ Expert-Built Portfolio Strategies
Betterment offers eight additional customized portfolio options:
1. Core Portfolio
- Globally diversified portfolio of low-cost ETFs across stocks and bonds
- 101 possible stock-to-bond allocations
- Automatic rebalancing when allocation drifts 3%+
- Primary ETFs from Vanguard
2. Socially Responsible Investing (SRI) – 3 Options
Broad Impact Portfolio
- ESG criteria across environmental, social, governance
- Eliminates harmful industries
- Broadly diversified
Climate Impact Portfolio
- Lower carbon emissions focus
- Green energy investments
- Climate-conscious companies
Social Impact Portfolio
- Gender diversity emphasis
- Minority empowerment
- Includes JUST, SHE, VETZ ETFs
3. Innovative Technology Portfolio
- High-growth tech companies
- AI, semiconductors, clean energy, blockchain
- Higher risk/higher potential returns
4. Value Tilt Portfolio
- Focus on undervalued stocks
- Potential to outperform market
- Based on value factor investing
5. Crypto ETF Portfolio
- Bitcoin and Ethereum ETF exposure in taxable and IRA accounts with 1% management fee
- Launched November 2024
- Automatic rebalancing
6. Flexible Portfolio
- Custom asset class weights
- For experienced investors
- Adjust allocations beyond preset models
7. Goldman Sachs Smart Beta
- Risk-adjusted returns
- Factor-based investing
- Institutional-grade strategy
8. BlackRock Target Income
- 100% bonds with various yields and risk tolerance levels
- For higher-income individuals
- Municipal bond optimization
Asset Classes
- US Stocks (large-cap, mid-cap, small-cap)
- International Developed Markets
- Emerging Markets
- US Bonds (government, corporate, municipal)
- International Bonds
- Real Estate (REITs)
- Commodities
Tax Optimization Features
Tax-Loss Harvesting+ (TLH+)
Betterment offers an automated tax loss harvesting feature called Tax Loss Harvesting+ (TLH+), an algorithm that regularly checks for opportunities to sell securities at a loss and replaces them with similar ones, allowing investors to offset taxes on gains and income.
How TLH+ Works:
- Monitors portfolio daily for loss opportunities
- Sells losing positions to realize losses
- Buys similar (not identical) ETF immediately
- Maintains optimal asset allocation
- Protects against violating the wash sale rule across all linked accounts
Tax Benefits:
- Offset short-term capital gains (taxed up to 37%)
- Offset long-term capital gains (taxed up to 20%)
- Deduct up to $3,000 against ordinary income annually
- Carry forward unused losses indefinitely
Performance: 69% of TLH users had fees covered by tax savings in 2022
Tax Coordination
Tax Coordination optimizes asset location across accounts
How It Works:
- Places tax-inefficient assets (bonds, REITs) in tax-deferred accounts (IRAs)
- Places tax-efficient assets (stocks) in taxable accounts
- Minimizes overall tax burden
- Automatic optimization
Additional Tax Features
Tax-Impact Tool:
- Shows how portfolio changes affect your taxes before you act
- Estimates capital gains/losses
- Helps with withdrawal planning
Charitable Giving Tool:
- Donate securities directly through app to your choice of charity, potentially netting you a tax benefit
- Avoid capital gains taxes on appreciated shares
- Receive charitable deduction
Municipal Bonds:
- Available in Target Income portfolio
- Tax-free interest for high-income earners
- State and federal tax benefits
Goal-Based Investing
Multiple Financial Goals
Betterment allows you to create multiple goals within one account:
Retirement
- 401(k) rollover guidance
- Social Security integration
- Required minimum distribution (RMD) planning
- Retirement income strategies
Major Purchase
- Home down payment
- Car purchase
- Wedding planning
Emergency Fund
- Conservative allocation
- High liquidity
- Cash Reserve integration
General Wealth Building
- Long-term growth focus
- Aggressive allocations available
Goal Tracking Features
Visual Progress Monitoring:
- Likelihood of success percentage
- Time to goal achievement
- Required monthly contributions
- Portfolio performance tracking
Personalized Recommendations:
- Increase contributions when behind
- Adjust timeline when ahead
- Rebalance suggestions
- Risk tolerance adjustments
Human Advisor Access
Betterment Premium CFP Services
Betterment Premium offers clients unlimited access to a team of CFPs who offer comprehensive financial planning to clients, including consultation on assets held outside of Betterment
What CFPs Can Help With:
- Retirement planning and projections
- Backdoor Roth IRA conversions
- Tax-efficient withdrawal strategies
- Portfolio rebalancing recommendations
- Major life event guidance (marriage, children, divorce)
- Asset allocation across all accounts
- Social Security claiming strategies
What CFPs DON’T Provide:
- Business planning advice
- Real estate investment guidance
- Active trading recommendations
- Estate planning (20% discount with Trust & Will)
Access Methods:
- Scheduled phone consultations
- Unlimited calls (no per-consultation fees)
- Email follow-ups
- Priority customer service
Digital Plan Support
Available Support:
- Email support during business hours
- Live chat support
- Comprehensive help center
- FAQ database
Limited:
- No phone access to CFPs
- Slower response times during peak periods
Customer Feedback: Digital plan users primarily interact through email and live chat during business hours, which works well for routine questions but can feel limited compared to competitors with 24/7 availability
User Experience and Technology
Mobile App
App Store Ratings:
- 4.8/5 rating on Apple App Store and 4.5/5 on Google Play
- The mobile app design makes it simple to track balances, set up recurring deposits, and monitor progress toward goals
Key Features:
- Portfolio tracking and performance
- Goal progress visualization
- Recurring deposit setup
- Tax document access
- Direct messaging with support
- Cash Reserve management
- Crypto portfolio (if subscribed)
User Feedback: Many users find it especially helpful for staying engaged with long-term investing without needing complex tools
Limitations: The app is light on advanced charting and its crypto dashboard is less developed than core investing features
Website (Desktop)
Platform Features:
- Comprehensive account management
- Detailed portfolio analytics
- Tax-impact simulator
- Goal planning tools
- Performance reporting
- Educational resources
Ease of Use: Highly intuitive interface designed for beginners, with clean navigation and visual goal tracking
Security and Safety
Regulatory Protection
SEC-Registered: Betterment is a registered investment advisor
FINRA/SIPC Member: Securities protected up to $500,000
FDIC Insurance: Cash Reserve funds FDIC-insured up to $2 million ($4 million for joint accounts) once deposited into program banks
Security Measures
Encryption: Bank-level 256-bit SSL encryption
Two-Factor Authentication (2FA): Available for all accounts
Account Monitoring: Unusual activity detection and alerts
Secure Linking: Third-party bank connections through Plaid
Pros and Cons
Betterment Pros
- ✅ Low $10 minimum to start
- ✅ 0.25% management fee (Digital plan)
- ✅ No trading or rebalancing fees
- ✅ CFP access with Premium plan ($100K minimum)
- ✅ Responsive email and chat support
- ✅ 12+ portfolio options, including SRI and crypto ETF
- ✅ Flexible Portfolio customization
- ✅ Tax-Loss Harvesting+ with wash-sale protection
- ✅ Tax Coordination for better asset location
- ✅ 3.75% APY Cash Reserve, up to $2M FDIC insured
- ✅ Free checking with debit card
- ✅ Goal-based interface, great for beginners
- ✅ Highly rated mobile app (4.8 iOS, 4.5 Android)
- ✅ Bankrate’s #1 robo-advisor 2025
Betterment Cons
- ❌ Premium fee high at 0.65%
- ❌ $4/month charge for small balances without deposits
- ❌ 1% crypto portfolio fee
- ❌ CFP access locked to $100K+ accounts
- ❌ Limited live support hours (M–F, 9 AM–8 PM ET)
- ❌ No direct indexing or 529 plans
- ❌ No HSA or custodial accounts
- ❌ Slow support during busy periods
- ❌ US-only availability
- ❌ No international, margin, or options trading
How Betterment Compares
vs. Wealthfront
 |
 |
|
|---|---|---|
Management Fee |
0.25% (Digital); 0.65% (Premium) |
0.25% (flat) |
Account Minimum |
$10 |
$500 |
Human Advisors |
Yes (Premium, $100K min) |
No |
Tax-Loss Harvesting |
Standard (all accounts) |
Advanced daily (all accounts) |
Direct Indexing |
No |
Yes ($100K+) |
529 Plans |
No |
Yes |
Portfolio Variety |
12+ strategies |
5-6 options |
Cash Account APY |
3.75% |
3.75% |
Best For |
Beginners, human guidance |
Tax optimization, advanced features |
Winner: Betterment for beginners and human advisor access; Wealthfront for tax optimization and advanced features
vs. Vanguard Digital Advisor
|
 |
|
|---|---|---|
Management Fee |
0.25% |
0.15% |
Account Minimum |
$10 |
$3,000 |
Portfolio Variety |
12+ strategies |
1 standard portfolio |
Human Advisors |
Yes (Premium) |
Limited ($50K+) |
Goal-Based Tools |
Excellent |
Basic |
Brand Trust |
Strong (2008) |
Legendary (1975) |
Winner: Vanguard for lowest fees and brand trust; Betterment for technology, features, and accessibility
vs. Fidelity Go
|
 |
|
|---|---|---|
Management Fee |
0.25% |
$0 (under $25K); 0.35% (over $25K) |
Account Minimum |
$10 |
$10 |
Tax-Loss Harvesting |
Yes |
No (major disadvantage) |
Portfolio Variety |
12+ strategies |
1 standard portfolio |
Cash Management |
Excellent (3.75% APY) |
Basic |
Winner: Fidelity Go for free management under $25K; Betterment for tax optimization and features
Who Should Choose Betterment?
Ideal Candidates
Beginners ($0-$10K)
- First-time investors
- Want simple, automated investing
- Need goal-based guidance
- Appreciate intuitive mobile app
- Don’t want to pick individual stocks
Young Professionals ($10K-$100K)
- Building retirement savings
- Want tax-loss harvesting
- Saving for house down payment
- Prefer hands-off approach
- Value goal tracking
Premium Clients ($100K-$500K)
- Want unlimited CFP access
- Need comprehensive financial planning
- Have assets across multiple institutions
- Willing to pay 0.65% for human guidance
- Appreciate priority support
Socially Conscious Investors
- Want ESG/SRI investment options
- Three distinct SRI strategies (Broad, Climate, Social)
- Willing to accept potentially lower returns for values alignment
Not Right For
Advanced Traders: Limited tools, no direct indexing, no options/futures
Fee-Sensitive Investors: Vanguard charges only 0.15%; Fidelity Go free under $25K
College Savers: No 529 plans (use Wealthfront, Vanguard, or Fidelity instead)
International Investors: US residents only
Small Account Without Auto-Deposits: $4/month fee can be prohibitive (4.8% on $1K account)
Compare
Wealthfront vs Betterment: Comprehensive Comparison Guide for Beginners
Acorns vs Betterment 2025: Which Robo-Advisor Is Best for You?
How to Get Started
Step-by-Step Account Opening
1. Visit Betterment: Go to betterment.com or download mobile app
2. Create Account: Provide email and create password
3. Choose Plan:
- Digital ($10 min, 0.25% fee)
- Premium ($100K min, 0.65% fee)
4. Answer Questions:
- Financial goals (retirement, house, etc.)
- Time horizon
- Risk tolerance
- Age and income
- Investment experience
5. Choose Account Type:
- Taxable (individual, joint, trust)
- Traditional IRA, Roth IRA, SEP IRA
- Cash Reserve
6. Select Portfolio:
- Core, SRI (Broad/Climate/Social), Innovative Tech, Value Tilt, Crypto, Flexible, Smart Beta, Target Income
7. Link Bank Account:
- Instant verification (Plaid)
- Or manual (routing/account numbers)
8. Fund Account:
- Minimum $10 to start investing
- ACH transfer (3-5 days)
- Set up recurring deposits (recommended to avoid $4/month fee)
9. Automatic Investing Begins:
- Portfolio built within 1 business day
- Daily monitoring and rebalancing
- TLH+ activates automatically
Timeline: 5-10 minutes to open; investing begins once funds clear (3-5 days)
Betterment Review: Final Verdict
Overall Rating: 4.5/5 ⭐⭐⭐⭐⭐
Betterment is a clear leader among robo-advisors. For most beginners and intermediate investors seeking automated, goal-based investing with optional human guidance, Betterment delivers exceptional value. The combination of low fees, sophisticated tax optimization, 12+ portfolio strategies, and top-rated mobile app make it the best all-around robo-advisor for 2025.
Get started at: betterment.com
Frequently Asked Questions
Is Betterment safe?
Yes. SEC-registered, FINRA/SIPC member with up to $500K securities protection. Cash Reserve offers up to $2 million in FDIC insurance. Strong security with 2FA available.
What are Betterment’s fees?
0.25% annually for Digital plan, 0.65% annually for Premium plan. $4/month for accounts under $ 20,000 without monthly deposits of $ 250 or more.
Can I talk to a financial advisor?
Yes with Premium plan ($100K minimum), which provides unlimited phone access to certified financial planners. Digital plan has email/chat only.
Does Betterment offer 529 college savings plans?
No. Major gap vs. competitors. Consider Wealthfront, Vanguard, or Fidelity for 529 plans.
How does tax-loss harvesting work?
TLH+ algorithm regularly checks for opportunities to sell securities at a loss and replaces them with similar ones, allowing investors to offset taxes on gains and income.
What’s the Cash Reserve interest rate?
3.75% APY as of September 23, 2025 (variable). Premium clients get additional 0.25% boost.
Can I avoid the $4/month fee?
Yes. Maintain $20K+ across all Betterment accounts OR set up automatic deposits of $250+/month.
Disclaimer: This review is for educational purposes. Investment decisions should be based on your personal situation. All information accurate as of October 2025 but subject to change.