Betterment vs. Acorns

Betterment and Acorns are both popular investing platforms for people who want help building a portfolio without managing every trade themselves. Betterment is best known for automated investing, goal-based planning and tax tools, while Acorns focuses on making investing automatic through features like Round-Ups® and recurring contributions. However, the comparison is no longer limited to robo-advice alone: Betterment now offers self-directed investing for eligible taxable accounts, and Acorns Gold users can add individual stocks and ETFs through Custom Portfolios. Deciding between Betterment and Acorns depends on whether you want a more robust robo-advisor experience, a spare-change investing system or limited control over individual investments.

For help deciding between Betterment vs. Acorns, consider talking to a financial advisor who can make a professional recommendation based on your long-term goals, risk tolerance and broader financial plan.

Betterment vs. Acorns: Fees

When comparing Betterment vs. Acorns, it’s important to look beyond investment options and consider how each platform charges users. Both platforms are designed to be relatively low-cost, but their pricing models are different. Betterment generally charges either a monthly fee or an annual advisory fee based on your balance and deposit setup, while Acorns uses a flat monthly subscription model.

There are usually four types of fees to look out for when choosing a trading platform.

• Trading Fees. Trading fees are a fixed charge attached to each trade that you make. This can come in the form of a flat fee, also known as the spread. This is the difference between the buying and selling price of an asset, if any.
• Trading Commissions. Your broker may charge trading commissions, which are usually a percentage based on the volume or value of each trade.
• Inactivity Fees. Inactivity fees are any fees the broker charges you for not trading.
• Non-Trading/Other Fees. There may be other fees for trading on the platform. For example, a brokerage might charge you for making deposits or withdrawals into your brokerage account or signing up for additional services.

As robo-advisors, Betterment and Acorns have a different fee structure compared to most platforms.

Betterment Digital charges either a flat monthly fee or an annual advisory fee. Betterment’s current fee structure says Digital costs $5 per month if your household balance is below $24,000 and you do not have at least $200 per month in recurring deposits enabled across your Betterment accounts. ¹ If your eligible household balance is $24,000 or more, or you have at least $200 per month in recurring deposits, Betterment Digital charges 0.25% annually.

Betterment Premium costs 0.65% annually on eligible balances under $1 million and requires a $100,000 minimum investing balance. Premium includes access to Betterment’s team of CFP® professionals for more in-depth investment advice, along with additional benefits. Betterment also applies discounted management fees to eligible balances above $1 million.

Acorns keeps its pricing simple with a flat monthly subscription model. There are three main tiers: Bronze, Silver and Gold.

• Acorns Bronze costs $3 per month and includes the firm’s basic investing tools, including Round-Ups® and a diversified base portfolio. ²
• Acorns Silver costs $6 per month and offers a broader package of investing and financial tools.
• Acorns Gold costs $12 per month and includes the widest set of features, including Custom Portfolios, which allow users to add individual stocks and ETFs alongside their diversified base portfolio. Gold also includes additional family, retirement and financial planning features.

Neither platform charges typical trading commissions for its automated portfolios in the same way a traditional brokerage might. However, investors should still pay attention to underlying fund expenses, advisory fees, subscription costs and any optional services they use. For smaller balances, Acorns’ flat monthly fees and Betterment’s $5 monthly fee can represent a higher percentage of assets than they would for larger portfolios.

Ask a financial advisor about the best brokerage for your accounts based on your long-term investment goals.

Betterment vs. Acorns: Services & Features

Betterment and Acorns both offer automated investing, but they are built around different user habits.

Acorns is designed primarily for beginner investors and people who want investing to happen automatically in the background. Its best-known feature is Round-Ups®, which lets users link a spending account and automatically invest spare change from purchases. For example, if you buy coffee for $2.78, Acorns can round the purchase up to $3 and invest the extra $0.22.

This feature is built for people who may not have a large amount to invest at once or who want to build the habit gradually. Investing small amounts will not build wealth quickly on its own, but over long periods, automatic contributions can help users start investing without needing to manually transfer money each month. Acorns also allows users to make recurring deposits or one-time contributions, so Round-Ups® are not the only way to invest.

Betterment, by contrast, is more focused on goal-based portfolio management. When you sign up, Betterment asks about your goals, risk tolerance and time horizon, then recommends an automated portfolio. Investors can set goals for retirement, major purchases, general investing or other financial priorities. Betterment’s platform then manages the portfolio with features such as automatic rebalancing and, for eligible taxable accounts, tax-loss harvesting.

Betterment may appeal more to investors who want a dedicated robo-advisor with more advanced planning features. It offers multiple portfolio strategies, including diversified ETF portfolios and options designed around specific themes or tax considerations. Betterment also offers tax-coordinated portfolio features for some users, which can help place different types of assets across taxable and tax-advantaged accounts more efficiently.

Both platforms are still built primarily around automated investing, but each now offers some level of investor control. Betterment customers can open self-directed investing accounts for eligible taxable accounts and select from eligible individual stocks and ETFs. Acorns Gold customers can use Custom Portfolios to add individual stocks and ETFs alongside their diversified base portfolio.

That said, neither Betterment nor Acorns is a full substitute for a traditional brokerage account if you want broad, hands-on control over individual securities. Betterment’s self-directed investing feature and Acorns’ Custom Portfolios offer more flexibility than earlier versions of these platforms, but both are still designed around simplified, long-term investing rather than active trading.

Betterment vs. Acorns: Online & Mobile Experience

Both Betterment and Acorns are designed to be easy to use, especially for investors who do not want to spend much time researching securities or managing their own allocations. Each platform walks users through a setup process that includes basic personal information, investment goals and risk preferences.

Acorns leans heavily into simplicity. Its app is built around automatic investing, recurring contributions and everyday financial habits. Because Round-Ups® are central to the platform, users are encouraged to link spending accounts early in the setup process. That can be convenient for people who want Acorns to automate small contributions, but it may feel premature for users who are still comparing platforms.

Betterment’s app and website are also designed for hands-off investing, but the experience is more planning-oriented. Users can create goals, view recommended allocations, adjust risk levels and track progress toward specific financial targets. Betterment may feel more comprehensive for users who want their investing app to double as a broader planning dashboard.

The main difference is how each platform frames the investing process. Acorns is built around making investing feel automatic and approachable. Betterment is built around helping users organize money around specific financial goals and manage a portfolio more efficiently over time.

Betterment vs. Acorns: Tax Considerations 

Taxes are one of the clearest differences between Betterment and Acorns.

Betterment offers several tax-focused tools that may help investors with taxable accounts. One of its best-known features is tax-loss harvesting, which automatically looks for opportunities to sell investments at a loss and use those losses to offset taxable gains, subject to IRS rules. This can be especially useful for investors with larger taxable balances, though the value depends on market conditions, account size and the investor’s broader tax situation.

Betterment also offers tax-coordinated portfolio features for eligible users with multiple account types. This approach generally aims to place less tax-efficient investments in tax-advantaged accounts and more tax-efficient investments in taxable accounts. The goal is to improve after-tax returns over time, although the outcome depends on each investor’s account mix and tax profile.

Acorns takes a simpler approach. It does not currently offer tax-loss harvesting or advanced tax-coordination tools. For many beginner investors with small balances, that simplicity may be acceptable. But investors who expect to build a significant taxable portfolio may prefer Betterment’s more tax-focused features.

Regardless of which platform you use, investment income can still create tax obligations. Dividends, interest, capital gains and sales of investments may need to be reported on your tax return. Automated investing can simplify portfolio management, but it does not eliminate the need to understand how your investments are taxed.

Betterment vs. Acorns: Who Should Use It?

Acorns and Betterment are both designed for investors who want a simpler way to build wealth, but they are suited to different types of users.

Acorns may be a better fit for new investors, younger investors or people who struggle to save and invest consistently. Its Round-Ups® feature can help turn everyday spending into small, automatic investments. It may also appeal to people who prefer a flat monthly subscription and want a simple app that combines investing with basic financial tools.

However, Acorns’ subscription fee can be relatively expensive for very small account balances when measured as a percentage of assets. For example, paying $3 per month may not seem like much, but it can be a meaningful drag if the account balance is only a few hundred dollars. Acorns may make the most sense for users who will contribute regularly and use enough of the platform’s features to justify the monthly cost.

Betterment may be a better fit for investors who want automated portfolio management, tax-loss harvesting and goal-based planning. It may also appeal to people who are building larger taxable portfolios or who want access to more advanced planning tools over time. Betterment Premium may be especially relevant for investors who meet the account minimum and want access to CFP® professionals.

Betterment’s fee structure can be more attractive as balances grow, particularly for users who qualify for the 0.25% annual Digital fee. However, the $5 monthly fee can also be meaningful for smaller balances if the user does not meet the balance or recurring deposit requirements for percentage-based pricing.

Investors who want full control over individual securities may want to compare both platforms with a traditional brokerage. Betterment’s self-directed investing and Acorns Gold’s Custom Portfolios provide more flexibility than these platforms once did, but they are still not primarily designed for active trading or complex investment strategies.

Bottom Line

Betterment and Acorns are for people who have decided that the pros of robo-advisory services outweigh the cons. They do not offer the option to directly trade assets, so that if you are looking to manage your own investments, neither of these products will serve you well. However, if you would like to build wealth without having to dive into financial research, both of these platforms have a lot to offer.

Tips on Investing

• Betterment and Acorns both let you set long-term financial goals, and they’ll help you build your portfolio around those targets. But what if you want more hands-on guidance from a human? Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Don’t go! Now that you know the highlights of these two products, it’s time to get a bit more into the weeds. In our dedicated brokerage reviews we go into detail on how exactly Betterment and Acorns differ.

Photo credit: ©iStock.com/JIRAROJ PRADITCHAROENKUL, ©iStock.com/stevecoleimages, ©iStock.com/popba