Plan your finances with an automatic investment account that does more with less
Investing can be intimidating, so any financial service that clears up confusion and makes it easy to get started is always welcome.
The largest independent automatic investment site, Betterment aims to improve your returns and support good financial habits. Financial planning tools can take the guesswork out of investing and help you create a personalized financial plan.
- Automatic, passive investing
- Customized retirement planning
- Low management fees
- Hands-off investing approach
- No choosing individual stocks and bonds
- Only ETF portfolios
How does it work?
Betterment’s investing philosophy focuses on a diversified portfolio of low-cost index funds. They target low cost, tax-efficient ETFs across domestic and international markets.
Your online investment account can include almost any kind of retirement account, including Roth IRA, Traditional IRA, Rollover IRA and SEP, as well as individual or joint non-retirement funds and trusts.
Choose from different risk profiles with a mix of stocks and bonds based on when you’ll need to access the money in your account. Plans range from low risk profiles with 100% bonds for retired people to profiles with higher percentages of stocks for younger, riskier investors.
Customized advice plus automatic investing
Betterment offers a hands-off, basic plan with no minimum deposits and a low management fee. The Betterment Digital plan is perfect for first-time investors who need help planning or investors who just want to set it and forget it.
The Betterment Premium plan is ideal for investors with more capital who want access to personal account management services to optimize their Betterment account or investments outside elsewhere. With the Premium plan, your higher management fee pays for access to messages or to call Certified Financial Planner® professionals, who aim to respond less than 24 hours.
You’ll get access to personalized financial advice and licensed financial experts with both plans.
|Betterment Digital||Betterment Premium|
|Annual, transfer & closing fees||None||None|
How much does it cost?
Your management fee covers all transfer, rebalance and trade fees, so you don’t have to worry about fees when your money is moving.
What are the benefits?
- Automatic rebalancing. Your portfolio adjusts daily and when you make contributions, withdrawals or gain dividends — so your portfolio is no more than 3% off its target ratios, This means your risk level stays the same.
- Fractional shares. No minimum stocks means no uninvested cash sitting in your portfolio.
- Microsavings. Invest your spare change automatically with SmartDeposit. Set the maximum amount you need in your checking account, and let SmartDeposit move any extra cash to your investment account every week. Pause a deposit or set a limit on how much money to move at any time. Most Americans haven’t met their savings goals, so this is a great feature to consider.
- Retirement planning. Use the RetireGuide to determine if you’re saving enough to meet your goals and find out when you can retire. Link your Betterment accounts with your company 401k, savings and other accounts.
- Tax benefits. Betterment automates asset location and tax loss harvesting to minimize taxes and increase your wealth.
- Socially responsible investing. Choose funds for companies meeting certain social or ethical standards in the way they do business.
- Deductible charitable giving. Betterment recently announced its charitable giving feature, allowing clients to donate directly to charities they support for tax deductions. This feature offers clients and nonprofits more security, fewer middleman fees and easier tax reporting.
What should I watch out for?
- Index fees. Portfolios are subject to fund level fees, which aren’t included in your management fee. Understand the fees associated with each fund you invest in.
- Limited options for taxable accounts. While Betterment doesn’t offer a direct indexing option, tax loss harvesting on taxable accounts automatically reviews your investments daily, reducing tax exposure on taxable accounts. The Tax-Coordinated Portfolio’s asset location strategy helps optimize accounts by automatically putting tax efficient investments into taxable accounts and tax-heavy investments into sheltered tax-advantaged accounts.
How do I apply?
Applying online is quick and easy. Answer a series of questions designed to help you create your own financial goals and save for retirement. Set up savings, retirement and investing goals and start enjoying automatic investing.
- Go to Betterment.com and click Get started.
- Answer a few questions about your job status, investing goals, current investing strategy and how much you want to invest.
- Fill in your personal information including name, phone number US mailing address and email.
- Verify your identity. Your Social Security number is required.
- Answer questions about your financial background to get better tax recommendations.
- Set up security questions to get into your account.
- You’re ready! Fund your account and pick your profile.
How can I get customer support from Betterment?
Call, chat or email Betterment customer service Monday through Friday 9 am to 6 pm ET. Live chat is also available Saturday and Sunday 11 am to 6 pm ET. The Betterment app also gives customers access to financial advisors.
I set up my Betterment account. Now what?
Take advantage of Betterment’s guides and planning tools. Try out Betterment’s online financial checkup tool to see if you’re meeting your saving and retirement goals.
You can also link your external accounts with Betterment to get a comprehensive view of your financial status. This makes it easier to make informed financial decisions, knowing where your money is and how it’s doing across every profile.
Betterment makes it easy to create a financial plan and start investing. Guides, calculators and personalized advice can help transform your relationship with money. With no minimum and low management fees, Betterment is a good option for investors who want a customized investing plan for less.
Compare your options before choosing the right investment platform for you.