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Betterment vs. Robinhood

Consider your investment management style when choosing between these trading platforms.

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Both Betterment and Robinhood let you trade securities and are geared toward specific types of investors. Betterment is a robo-advisor that puts your portfolio in the hands of a computer algorithm, while Robinhood doesn’t have the commissions and fees.

Which one is better?

  • Choose Betterment if you want a portfolio curated by an expert.
  • Choose Robinhood if you want to pick and choose individual securities.

Betterment and Robinhood get you access to the stock market, with no account minimums so you can start investing with as little as $1. The better platform depends on your investment management style.

Betterment matches you to a recommended portfolio. While it allows you to make changes, it doesn’t have the research tools to screen and analyze securities. Instead, it uses algorithms to manage and allocate your funds for a fee, making it better suited for a hands-off investor not looking to actively trade on the stock market.

If you’re looking to break into the stock market and buy securities yourself, Robinhood might be a better option. Its commission-free trades and basic research tools make it a good place for newbies and cryptocurrency traders. But you won’t find any tax-saving features or get any financial planning advice.

How do Betterment and Robinhood compare?

BettermentRobinhood
Betterment logo
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Robinhood logo
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OverviewBetterment is an online financial advisor that makes investing easy by creating a portfolio just for you, based on your preferences and financial goals. It’s a solid choice for those new to investing.Robinhood is an online trading platform that offers self-directed brokerage services. Investors can trade commission-free stocks, ETFs and options with 24-hour access to 17 different cryptocurrencies. It’s well-suited to new investors looking to start buying and selling their own stocks.
Annual fee0.25%0%
Minimum deposit to open$0$0
Benefits
  • Customizable portfolios. Start with its recommended portfolio and make changes as you see fit.
  • Tax benefits. An algorithm that checks your portfolio daily for securities that have lost value so you can sell them to help offset taxes on capital gains.
  • Automatic rebalancing. Your portfolio adjusts daily so it doesn’t stray more than 3% off its target allocation weight (or 5% off if you have mutual funds). Your risk level doesn’t change, even when you deposit or withdraw funds.
  • No minimum deposit. Its digital account doesn’t have an account minimum. But you’ll need $100,000 to open a premium plan.
  • $0 commissions and fees. Trade US-listed stocks, ETFs and options for free. And unlike most brokers, Robinhood doesn’t charge commissions on options contracts.
  • Trade crypto. Unlike its competitors that only trade crypto futures, you can buy and sell cryptocurrency directly from Robinhood.
  • Instant deposits. Utilize your funds immediately with a deposit of up to $1,000.
  • No account minimums. Robinhood doesn’t have a minimum account balance or initial deposit requirement. Sign up and start investing any amount.
Drawbacks
  • Advisory fee. Although Betterment charges a management fee of 0.25% — lower than the industry standard of 1% — it doesn’t cost anything to use Robinhood.
  • No direct indexing. Betterment’s tax-loss harvesting service doesn’t include direct indexing.
  • No immediate deposits. Deposits generally take one to two business days to process before the money is invested.
  • Limited customer support. Customer service is only accessible by email and it takes about 24 hours to get a response.
  • Limited securities. Investments are limited to stocks, ETFs, options and crypto. Unlike Betterment, you can’t trade bonds.
  • No IRAs. Robinhood only offers individual brokerage accounts, whereas Betterment offers traditional, Roth and SEP individual retirement accounts.
  • Lacks in-depth research tools. The free service tier comes with basic stock analysis data and news feeds about the market and specific companies from sites like the New York Times and MarketWatch. No detailed fundamental or technical analysis is available for experienced traders.
Tools and research
  • Online financial planning tools. Choose a financial goal, such as saving for a house or retirement, and answer a series of questions to see an investment portfolio for your situation.
  • Certified financial planners. Get one-on-one guidance from Betterment’s network of financial advisors on its premium plan, or buy an advice package for a one-time call.
  • Educational resources. Betterment has a library of free financial articles, quizzes to test your knowledge and calculators to help you plan for the future.
  • Basic charting. Analyze market trends with line and candlestick charts for stocks and cryptocurrency. No screeners to filter stocks, ETFs or options.
  • News feed. Browse articles and market highlights from sites like Reuters and the Financial Post.
  • Third-party research reports. Robinhood Gold members who upgrade to a $5 monthly subscription can access research reports from Morningstar and Nasdaq Level II Market Datastock.
Reputation and customer reviews
  • Reviews are mostly negative.
  • Customers praise its user-friendly platform and tax-saving strategies.
  • Customers complain about holdups when withdrawing money from their accounts.
  • Reviews are mostly negative.
  • Customers praise its easy to learn platform and commission-free trades.
  • Customers complain about its inefficient customer service and delays when trying to retrieve money from their accounts. More recently, service outages from a flood in trading activity left investors trapped in adverse positions, resulting in monetary losses. But Robinhood has pledged to upgrade its platform.
Apple App Store reviews

★★★★★ 4.8/5

★★★★★ 4.8/5

Google Play Store reviews

★★★★★ 4.2/5

★★★★★ 4.3/5

Support
  • Phone. Call 646-600-8263
  • Email. Send a request to Betterment’s customer service Monday through Friday, 9 a.m. to 6 p.m
  • Live chat: Available Saturday and Sunday, 11 a.m. to 6 p.m. ET.
  • Email. Fill out an online support ticket request on Robinhood’s website for an email response from the customer service team.
Learn more

Read our review

Read our review

Bottom line

Betterment’s advisory fee is lower than its competitors, and the platform matches you with a recommended portfolio built for your financial goals and timeline. And if you want more personalized advice, you can buy a one-time call to speak with a financial advisor.

Robinhood is better suited for investors who want to trade on the stock market regularly. Its platform is free to use and stocks, ETFs and options trade for free. But what sets Robinhood apart from other brokers is the ability to trade cryptocurrency.

Experienced traders looking for in-depth research tools might want to consider other trading platforms.

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