Betterment Review 2023: Features, How It Works, and More (2023)

Investing is an important part of saving for retirement and earning passive income with savings account interest rates at historic lows.

However, many people are hesitant to invest because researching investments and managing your portfolio can be stressful and time consuming.

Betterment offers managed investment portfolios and other financial products that can help new and experienced investors improve their finances with minimal effort.

Betterment Review 2023: Features, How It Works, and More (1)

4.2

Overall Rating

Summary

Betterment is one of the larger robo-investor sites which offers investors an alternative to more traditional human financial advisers. As one of the first financial groups to launch a robo-investor, they offer low fees and an easy to use app for your investing needs.

  • Ease of use

    4.5

  • Fees

    4

  • Investing options

    4

Pros

  • Low fees
  • Easy to use app
  • No minimums

Cons

  • No direct indexing
  • Limited investment options
  • Fees to access expert help
  • Visit Betterment

Table of Contents

  • What is Betterment?
    • Fees
    • Who Can Join Betterment?
  • Betterment Investing Features
    • Account Options
    • Digital and Premium Accounts
    • Betterment Premium
    • Core Portfolio
    • Advanced Portfolios
    • Flexible Portfolios
    • Automatic Portfolio Rebalancing
    • Tax Loss Harvesting
    • Tax Coordination
    • Charitable Giving
    • SmartDeposit
    • Goal Forecaster
  • Investment Options
    • Which Stock ETFs are Used in Betterment’s Portfolio?
    • Which Bond ETFs are Used in Betterment’s Portfolio?
  • Betterment Banking Features
    • Checking
    • Cash Reserve
  • Betterment Planning Tools
    • Financial Advice Packages
    • Retirement Planner
    • Track Savings Goals
  • Is Betterment a Good Match For You?
  • Betterment Pros and Cons
  • FAQs
  • Summary

What is Betterment?

Betterment is one of the first robo-advisors that fully manages your investments. The service uses the Modern Portfolio Theory to build a diversified portfolio of stock and bond index funds.

You might prefer this platform if don’t have the time or desire to pick your own investments and rebalance your portfolio. This investing app makes these decisions once you share your investing goals and risk tolerance.

In addition to being one of the best robo-advisors, several additonal services are available.

Additional features include:

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  • Online checking account
  • Cash management account
  • Rewards debit card
  • Retirement planning tools
  • Financial advisor access

While the investment products can be the best reason to use Betterment, you can also use the platform exclusively for its banking accounts.

Fees

Fees apply for the investment services but the banking accounts are free.

Investing Fees

You will pay an annual advisory fee for an investment account. The service withholds the fees on a monthly basis.

There are two different investing pricing plans:

  • Digital investing: 0.25% annual fee ($0 minimum balance)
  • Premium investing: 0.40% annual fee ($100,000 minimum balance)

The annual advisory fee covers all expenses including automatic portfolio rebalancing to buy or sell ETFs.

ETF expense ratios the fund manager collects are an additional charge. However, the fees are the same as if you buy the same funds in a self-managed account.

One optional fee are for financial advisor advice packages. These packages can cost between $299 and $399.

You can get unlimited financial advisor access with the Premium plan. However, the minimum account balance is $100,00 and the annual advisory fee is 0.40%.

Banking Fees

There are no service fees for the Checking or Cash Reserve accounts.

Betterment can also offer these banking perks:

  • Worldwide ATM fee reimbursements
  • Bill pay
  • Paper checks

While it’s not a fee, you will need to make a minimum $10 deposit to open a Cash Reserve account.

Who Can Join Betterment?

The minimum age is 18 years old for investment accounts.

Due to state laws, you may need to be 19 or 21 years old to open a banking account.

Unfortunately, the platform currently doesn’t offer custodial accounts for minors under the age of 18.

Betterment Investing Features

Here is a look at how investing with Betterment works and some of the core benefits each member enjoys.

Account Options

You can open the following investment accounts:

  • Individual taxable accounts
  • Joint taxable accounts
  • Traditional IRA
  • Roth IRA
  • SEP IRA
  • Inherited IRA
  • Trust accounts

You can open any taxable or retirement account with a $0 initial balance. Opening an account lets you develop your investing goals and asset allocation.

However, your account balance must be at least $10 to make your first investment. The investment minimum is $10 for all future trades.

Digital and Premium Accounts

Betterment offers two types of investment accounts:

  • Digital
  • Premium

The investment options are the same. However, the Digital plan provides more advisory options.

Betterment Digital

You will most likely start with Betterment Digital as it doesn’t have a minimum balance requirement.

Account benefits include:

  • Automatic rebalancing
  • Tax-loss harvesting
  • Passive index fund investing
  • Advanced investment strategies
  • Dividend reinvesting
  • Add-on financial advice packages

The annual advisory is only 0.25% (instead of 0.40% for Premium). If your account balance exceeds $100,000, you can keep this account plan if you don’t need the additional Premium features.

Betterment Premium

You will need an investment account balance of at least $100,000 to qualify for the Premium pricing plan.

Additional plan perks include:

  • Unlimited calls and emails with a CFP
  • In-depth advice for non-Betterment investments

You will need to decide if these benefits are worth the 0.40% annual advisory fee.

Core Portfolio

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The Core Portfolio is the standard investment strategy as they can have the lowest fund fees and base your asset allocation on the Modern Portfolio Theory.

Betterment recommends a mixture of stock and bond index ETFs with low fund fees that align with your risk tolerance and age.

As you grow older, the platform automatically rebalance to hold more bond funds that are inherently more risk-averse and less volatile than stocks.

Advanced Portfolios

You can also add an advanced portfolio strategy to focus on a specific strategy. These portolfios are optional.

The platform lets you invest in these strategies in addition to a Core Portfolio. If you don’t want a Core Portfolio, you can invest exclusive in one or several of the advanced strategies.

Your advanced portfolio options include:

  • Socially responsible investing (SRI)
  • Climate impact
  • Social impact
  • BlackRock Target Income (100% bonds)
  • Goldman Sachs Smart Beta (Tries to outperform a traditional index fund strategy)

These portfolios have more of an active investing approach that doesn’t try to track the overall market performance as closely as a Core Portfolio.

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Depending on which strategy you try, you may sell assets more often. Each sale is a taxable event in a non-retirement account.

Flexible Portfolios

Users can also modify the asset classes and geographic weights of your portfolio.

This feature is optional and can be beneficial to experienced investors that still prefer automated investing but want to control some of the investment options.

Automatic Portfolio Rebalancing

Portfolio rebalancing is necessary because it helps you maintain your target asset allocation.

You don’t want the balance between stocks and bonds to stray too far from their target allocation.

Betterment rebalances your portfolio as necessary when positions “drift” from their target percentage.

With each new investment, the first portion of your cash buys funds that have the highest underallocation.

The service may sell overallocated positions and reinvest your profits into underallocated positions.

You can create customized rules for how often the service rebalances your portfolio.

Tax Loss Harvesting

Tax loss harvesting is when you sell a security that has experienced a loss and then replace it by purchasing a similar one.

This selling and replacing gives the investor the opportunity to claim a capital loss on their taxes while still maintaining “exposure to the asset class.”

These losses can minimize your taxable gains in non-retirement accounts.

This feature is free and Betterment suggests if your portfolio balance is large enough to benefit from this rebalancing tool.

Other robo-advisors may charge an additional fee for this convenience.

Tax Coordination

When you have taxable and tax-advantaged retirement accounts at Betterment, the platform uses a tax coordination feature to optimize your tax situation.

The service will primarily invest in assets with more taxable income in tax-advantaged account.

Therefore, your taxable account will hold funds that generate less taxable income.

Charitable Giving

Along with offering socially responsible market assets to invest in, Betterment has Charitable Giving.

You can donate shares directly from your account to charities, which is tax deductible. You’ll avoid capital gains taxes on whatever you decide to donate.

SmartDeposit

Once you link your checking account to Betterment, you can automatically transfer money directly into the account.

If you want to take it one step further to really automate your savings, Betterment has a feature called SmartDeposit that takes out unneeded cash from your checking account and invests it for you.

This feature is similar to Acorns, except SmartDeposit allows you to set a budget for yourself so it knows not to take out too much out from your account.

Goal Forecaster

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You can project your potential portfolio value in future years with the Goal Forecaster tool. Simply enter your initial investment and recurring contribution amount to adjust the prediction.

This tool estimates your average, favorable and unfavorable outcome depending on how the market performs and your portfolio rebalances.

Investment Options

Here are some of the stock and bond ETFs your portfolio can invest in. Your portfolio will primarily invest in Vanguard, iShares and Schwab ETFs.

Which Stock ETFs are Used in Betterment’s Portfolio?

Betterment offers the following stock ETFs:

US Total Stock Market – Vanguard U.S. Total Stock Market Index ETF (VTI)
In a nutshell: These are stocks that give you broad exposure to the entire U.S. stock market.

US Large-Cap Value Stocks – Vanguard US Large-Cap Value Index ETF (VTV)
In a nutshell: It’s similar to the US Total Stock Market. But, it’s geared to focus the portfolio on large-size companies that have low price-to-earnings ratios.

US Mid-Cap Value Stocks – Vanguard US Mid-Cap Value Index ETF (VOE)
In a nutshell: It’s similar to the US Total Stock Market, except it’s geared to focus the portfolio on medium-size companies that have low price-to-earnings ratios.

US Small-Cap Value Stocks – Vanguard US Small-Cap Value Index ETF (VBR)
In a nutshell: It’s similar to the US Total Stock Market, except it’s geared to focus the portfolio on small size companies that have low price-to-earnings ratios.

International Developed Stocks – Vanguard FTSE Developed Market Index ETF (VEA)
In a nutshell: You get exposure to various international countries such as the UK, Europe, Japan, and others.

Emerging Market Stocks – Vanguard FTSE Emerging Index ETF (VWO)
In a nutshell: You have the opportunity to have your portfolio grow with developing nations as they modernize and grow, but these tend to also have higher risk.

Which Bond ETFs are Used in Betterment’s Portfolio?

These are the Bond ETFs that are available:

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Short-Term Treasuries – iShares Short-Term Treasury Bond Index ETF (SHV)
In a nutshell: These are low-risk and can mature between one month and a year.

Inflation Protected Bond – Vanguard Short-term Inflation-Protected Treasury Bond Index ETF (VTIP)
In a nutshell: Part of your portfolio assets are protected from the depreciating effects of inflation.

US High-Quality Bonds (IRA and 401(k) accounts) – Vanguard US Total Bond Market Index ETF (BND)
In a nutshell: These bonds are generally stable, have low risk and take an average of seven years to mature.

National Municipal Bonds (Taxable accounts) – iShares National AMT-Free Muni Bond Index ETF (MUB)
In a nutshell: These bonds are federally tax-exempt, which can make excellent additions to your taxable portfolios.

US Corporate Bonds – iShares Corporate Bond Index ETF (LQD)
In a nutshell: These types of bonds are made to finance business activities and help diversify fixed-income portfolios.

International Market Bonds – Vanguard Total International Bond Index ETF (BNDX)
In a nutshell: These bonds are issued by non-US based governments and organizations and can offer interest rate diversification.

Emerging Market Bond – iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)
In a nutshell: These are issued by governments in fast-growing countries and pose a higher risk but also a higher expected return.

Betterment Banking Features

You can open two different fee-free banking accounts. An investment account isn’t necessary to have either of these accounts.

Checking

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The Betterment Checking account is a fee-free checking account with several exciting. Individual and joint accounts are available.

Some of the best perks include:

  • Unlimited ATM fee reimbursement worldwide
  • Foreign transaction fee reimbursements
  • Rewards debit card
  • No overdraft fees
  • Online bill pay
  • Can mail paper checks
  • Up to $250,000 in FDIC insurance ($500,000 for joint accounts)
  • Up to $600 in cell phone protection

This account doesn’t earn interest but you can earn cash rewards at participating purchases. Most offers let you get up to 5% back at stores and restaurants.

You may also consider these other free checking accounts to find the best option.

Cash Reserve

The interest-bearing Cash Reserve account is also fee-free but requires a $10 minimum opening deposit.

You might use this account to store your uninvested cash for short-term savings goals. The account can also be a competitive alternative to high-yield savings accounts but you can make unlimited monthly withdrawals.

Account benefits include:

  • Entire balance earns interest (1.60% to 2.25% APY, as of September 26, 2022)
  • Unlimited account withdrawals and transfers
  • Up to $1 million in FDIC insurance ($2 million for joint accounts)

This account is able to provide above-average FDIC insurance as Betterment has four partner banks. Each partner bank provides up to $250,000 in FDIC insurance.

The platforms offers several free and paid financial planning tools.

Financial Advice Packages

All users can request advice sessions with CFP® professionals. These sessions last 45-60 minutes and cost approximately $299.

Each session is free for Premium Plan members and the session can be longer than 60 minutes.

The advice package topics can include:

  • Financial checkup
  • Retirement planning
  • Marriage
  • College

Retirement Planner

The free retirement planning tool is an interactive retirement calculator.

Some of the best planning features include:

  • Create a retirement savings plan
  • Connect and track external bank accounts
  • Plan multiple savings goals
  • Prioritize savings goals
  • Schedule auto-deposits and one-time contributions

This tool can be an effective planning tool but you may appreciate NewRetirement to run multiple assumptions to simulate your retirement savings.

Track Savings Goals

You can also create non-retirement savings goals on your online dashboard.

This feature is similar to what many online banks offer so you can calculate your monthly savings amount to achieve your goal.

Some of the goals you may track include:

  • Buying a new car
  • Wedding
  • Gifts
  • Education
  • Vacation

The service can recommend an investing or banking account that can help you earn the most passive income and manage risk.

Is Betterment a Good Match For You?

Betterment can be worth using if you want a fully automated investing account that only invests in index funds. The platform offers several features that can make investing easy.

Being able to have a taxable and retirement investment account on the same platform makes tax-loss harvesting and tax-coordinated investing easy to use.

The banking products and planning tools are also worth a look if you desire these features.

However, you may decide to avoid Betterment if you’re comfortable managing your own investments. The investment account advisory fee is reasonable for robo-advisors but can still be a nuisance when there are many free investing apps.

Betterment Pros and Cons

Here are the positives and negatives of using this platform.

Pros

  • Flexible investment options
  • Automatic portfolio rebalancing and tax-loss harvests
  • Low $10 minimum investments
  • Fee-free Checking and Cash Reserve accounts
  • Financial planning tools

Cons

  • Cannot invest in individual stocks
  • Annual advisory fee for investment accounts
  • Premium plan requires $100,000 minimum balance
  • CFP financial advice packages can be pricey
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FAQs

Here are some lingering questions you may have about how Betterment works?

Is Betterment worth the fee?

The 0.25% annual advisory is competitive with similar robo-advisors. It can be worth paying the fee if you want a fully-automated portfolio and only want to invest in index funds.

The best reasons to use Betterment include automatic rebalancing, tax-loss harvesting and financial advisor access.

The Betterment banking accounts are fee-free and are a great option if you want a checking account or interest-bearing savings account.

Is my money safe with Betterment?

Your Betterment investments have up to SIPC Insurance if the platform closes. However, your investments are subject to normal market losses.

A Betterment Checking account has $250,000 in FDIC Insurance and the Cash Reserve account has $1 million in FDIC Insurance.

What are the Betterment customer support options?

The platform has an extensive online knowledge library. You can also send an email. Another option is having a 1-on-1 financial advisor session for personal advice.

Wealthfront vs Betterment: Which platform is better?

Both platforms have competitive advisory fees, investment options and banking accounts.

Betterment can be the better option if you want financial advisor access. However, Wealthfront can have a better free financial planning tool and may offer more portfolio customization if you have a portfolio balance above $100,000.

Does Betterment have a mobile app?

Yes, a mobile app is available for iOS and Android devices. It has the same features as the web platform. It is easy to set up a Betterment account.

Is Betterment easy to use?

The Betterment investment platform is very easy to navigate which can be good for new and experienced investors.

Summary

When it comes to saving for retirement, time is both your friend and enemy. Invest too late, and you’ll probably end up working for much longer than you wanted. Or you may run out of money in your retirement years.

Invest early, and you’ll have the freedom to retire early, travel, work (or not), and do whatever you want.

Betterment can help you invest, create an investment portfolio and save for your short-term and long-term goals. It’s one of the best robo-advisors to use because of its many features and competitive fees.

Betterment Disclosures:

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†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 visitwww.FDIC.gov.Deposits held in Program Banks are not protected by SIPC. For more information see thefull terms and conditionsandBetterment LLC’s Form ADV Part II.

***The annual percentage yield (“APY”) on the deposit balances in Betterment Cash Reserve (“Cash Reserve”) is 2.25% 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 September 26, 2022. 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.

FAQs

Is Betterment really worth it? ›

Our Verdict. One of the original robo-advisors, Betterment has grown its platform over the past decade to include an excellent range of features and tools, including cryptocurrency investing. Its sophisticated and highly functional investing platform earned it Forbes Advisor's choice as the best robo-advisor.

Why am I losing money with Betterment? ›

Can you lose money with Betterment? Yes, as with any investment, your investments with Betterment can lose money. If the market drops, your investment could lose value. Unlike checking or savings account deposits, investments are not FDIC insured, and there is no bank guarantee.

What is Betterment and how does it work? ›

Betterment is a clear leader among robo-advisors, offering two service options: Betterment Digital provides automated portfolio management at $10 to start an account; Betterment Premium provides unlimited phone access to certified financial planners for a $100,000 account minimum. of free management for new clients.

What is the average return on Betterment? ›

Based on the numbers above, Betterment has an average annual investment return of just under 8.8%.

What happens to my money if Betterment goes out of business? ›

What happens to my money if Betterment goes public, is acquired, or closes? Betterment Securities is a member of the Securities Investor Protection Corporation (SIPC). At a high level, you can think of SIPC as providing protection for funds held in a brokerage account in the event that the brokerage fails.

Can you get scammed on Betterment? ›

We are committed to protecting your account from fraud. If you see any unauthorized activity in your account, report it immediately. We'll work with you to address any issues that result from unauthorized use of your Betterment account.

How do I avoid Betterment fees? ›

Will I be charged the whole annual fee if I use Betterment for just part of the year? No, you will not. If you withdraw your entire balance before the end of the month or year, you're only charged the fee for the days your money was managed by Betterment.

Does Betterment charge a monthly fee? ›

We do not have fees for accounts with a $0 balance, so you can still keep your account open without penalty. If your total Betterment balance is below $20,000 and you do not have a recurring deposit of $250/mo or more, Betterment charges $4 per month.

Can you make money on Betterment? ›

Interest on Bank Deposits

If you choose to, you can make more money in interest from cash reserve than the average savings account out there. So, the very first way to make money with Betterment is using their checking/savings accounts to earn a higher rate of interest as well as cutting down on fees.

Do I need to report Betterment on taxes? ›

Please note that while Betterment is not required to issue you a 1099 if you earned a relatively small amount of income from your account, taxpayers are still required under IRS rules to report and pay taxes on any earned income. Copied!

Which is better Robinhood vs Betterment? ›

Both Betterment and Robinhood offer relatively low fees and let you start investing without much money, which could be a great way to break into the market. But if you're new to investing, Betterment might be the better choice for you, as its robo-advisor tool builds and rebalances your portfolio on your behalf.

Is my money safe with Betterment? ›

Yes. Betterment is a fiduciary company that's registered with the SEC and a member of the FINRA. It hires Certified Financial Planners to give advice. While investments could lose value over time — a risk with all investing — funds in Betterment accounts are protected by SIPC in case of emergencies.

Is Betterment good for beginners? ›

Betterment is a robo advisor that is great for beginners, but advanced investors will like its many features as well. It's easy to set up, and you can get access to a human advisor if you need it.

Is Betterment as good as Vanguard? ›

The two share similar features: automated investment offerings, human advisor access, IRA accounts, and socially responsible investment options. Both offer low fees, but Betterment manages your investment portfolio for you, while Vanguard gives you the option to trade on your own or invest in a managed portfolio.

How much interest does Betterment pay? ›

Benefits: Earn a variable rate of 3.75% APY* FDIC insurance covering up to $1,000,000 at our program banks† Access your cash in 1-2 business days No limits on withdrawals No minimum balance No fees on your balance Cash Reserve is only available to clients of ...

How much money do you need to invest in Betterment? ›

No minimum balance

Unlike many of its competitors, Betterment doesn't require a minimum account balance, making it a good stock broker for beginners. However, you need to deposit at least $10 to start investing. In contrast, many competitors have minimums of $500 or more.

How does Betterment affect taxes? ›

Any dividends you receive are automatically reinvested by Betterment, and grow tax-deferred until you withdraw. When you withdraw from the account, taxes are generally due at your ordinary income tax rate applicable at that time, both on earnings and on all contribution amounts that were previously deducted.

What bank owns Betterment? ›

Hassle-free, no-fee checking. Betterment Checking is our mobile-first checking account and Visa® Debit Card for your daily spending. Checking accounts and the Betterment Visa® Debit Card provided and issued by nbkc bank, Member FDIC.

How much does it cost to close Betterment account? ›

Are there fees for closing an account? Betterment does not charge trading fees or penalties for closing/deleting accounts. However, for crypto accounts, Betterment's crypto custodian, Gemini, charges a crypto trading and custody fee that fluctuates based on trading volume, up to 0.15% per trade.

Is it safe to link bank account to Betterment? ›

Connecting a bank account instantly creates a secure, read-only connection with your financial institution through our data partner, Plaid. Betterment does not store your login information and will never share, sell, rent, or trade your information without your approval.

Does Betterment have hidden fees? ›

Betterment offers a free online checking account with no hidden fees, a cash back rewards program and free cellphone insurance. It's easy to get started, but you're limited to a maximum of two checking accounts and one debit card.

Is Betterment covered by insurance? ›

Yes, a personal condo insurance plan often covers betterment and improvements. You can't generally rely on an association policy to cover everything in your unit, which is one of the reasons why having condo insurance is so important.

What is the Betterment rule? ›

Owners may be entitled to cost of repairing, not improving, defective components. “Betterment” occurs when an owner makes repairs with a more expensive design, uses higher quality materials, or increases the defective building or component's useful life. Grossman v. Sea Air Towers, Ltd., 513 So. 2d 686, 688 (Fla.

Which is better acorns or Betterment? ›

We prefer Betterment over Acorns if you want more portfolio options and are looking to consistently invest money with recurring deposits or through larger lump-sum deposits. It's also superior to Acorns if you want more ESG-friendly portfolios.

Which Betterment portfolio strategy is best? ›

If your goal is short-term, we'll recommend a more conservative portfolio with lower expected returns with less volatility, and if your goal is longer term, we'll likely recommend a more aggressive portfolio with higher expected long-term returns with higher volatility.

Can you withdraw from Betterment at any time? ›

You can withdraw your money from Betterment at any time, without additional fees. We do not charge any trading fees or assess penalties for requested withdrawals or account closures. It's your money and is always accessible to you.

Does Betterment pay dividends? ›

The Betterment Robo Advisor 20 Portfolio granted a 1.78% dividend yield in 2022. It's a Low Risk portfolio and it can be implemented with 12 ETFs.

Will Betterment send me a 1099? ›

You will receive a 1099-INT if your interest amounts to $10 or more over the course of the year. If the amount of dividends received is below $10, a 1099-INT is required if there were any federal taxes paid due to backup withholding.

Is Betterment better than Charles Schwab? ›

We give Betterment the edge over Schwab Intelligent Portfolios because Betterment offers tax-advantaged investing to all accounts regardless of balance size. Betterment is not a licensed tax advisor. Tax Loss Harvesting+ (TLH+) is not suitable for all investors.

What is the difference between Betterment and fidelity? ›

Tax-Advantaged Investing

Betterment offers tax-loss harvesting for users with taxable accounts. Fidelity Go doesn't offer tax-loss harvesting but does provide tax-advantaged funds (i.e. municipal bonds) to reduce your tax burden over time.

Is Betterment a good high-yield savings account? ›

Betterment Cash Reserve is essentially a high-yield savings account. But unlike most savings accounts, it doesn't limit how many transactions you can make each month. Betterment Cash Reserve pays a high interest rate. You can also create buckets to save for different goals, such as "Travel Account" or "Emergency Fund."

Do you make money on Betterment? ›

The average checking balance in the US is $8,100, and it earns 0.08% ($6.48) interest a year. That's why Betterment created a new savings and checking platform. With Cash Reserve, you'll earn a competitive APY with Savings. As a result, you're able to earn substantially more than your average bank offers.

Can you make money off Betterment? ›

There are four main ways to make money with Betterment:

The first is dividends earned from your investments. These dividends are automatically reinvested, allowing you to earn compound interest. The second way is from the growth of the funds over time, as stocks and bonds tend to go up in value over the long run.

How much should I put in Betterment? ›

No minimum balance. Unlike many of its competitors, Betterment doesn't require a minimum account balance, making it a good stock broker for beginners. However, you need to deposit at least $10 to start investing. In contrast, many competitors have minimums of $500 or more.

How safe is my money in Betterment? ›

Yes. Betterment is a fiduciary company that's registered with the SEC and a member of the FINRA. It hires Certified Financial Planners to give advice. While investments could lose value over time — a risk with all investing — funds in Betterment accounts are protected by SIPC in case of emergencies.

What is the best Betterment portfolio strategy? ›

If your goal is short-term, we'll recommend a more conservative portfolio with lower expected returns with less volatility, and if your goal is longer term, we'll likely recommend a more aggressive portfolio with higher expected long-term returns with higher volatility.

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