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Betterment Review – Robo-Investing & Banking Platform

Betterment New Logomark Color

Our rating



  • Investing Plans: Digital plan, 0.25% annual fee or $4 monthly fee, depending on balance; Premium plan, 0.40% annual fee (percentage of assets under management).
  • Investing Account Types: Taxable brokerage account, traditional IRA, Roth IRA, SEP IRA, Roth conversion.
  • Banking and Cash Management Products: Betterment Checking with rewards on eligible debit card purchases, Betterment Cash Reserve (cash management account).
  • Additional Features and Capabilities: Free retirement planning tools, free customizable savings goals, a la carte financial advice packages starting at $299.
  • Advantages: No minimum balances for banking or investment accounts, no cash account fees, reasonable investment management fees, DIY financial planning tools available at no charge, a la carte financial advice available at reasonable hourly fees, seamless backdoor Roth conversions in the Betterment app.
  • Disadvantages: No self-directed investing options, no full-service wealth management options, limited access to alternative investment opportunities.

Betterment is a pioneering robo-advisor fiduciary that still offers tremendous value for hands-off, cost-conscious investors eager to build market-tested passive investment portfolios without paying more than they should.

More recently, Betterment has also made a name for itself as a low-cost online bank. Its checking and cash management accounts make it easy to manage day-to-day and long-term funds with Betterment, even if you’re not ready or willing to open an investment account here.

Is Betterment perfect for everyone? Not quite. Although its automated asset management tools are at once sophisticated and beginner-friendly, Betterment doesn’t have a self-directed investing platform and omits alternative asset classes like cryptocurrencies, forex, and options. And Betterment only offers two deposit accounts.

Still, whether you’re thinking about replacing your current financial advisor or seeking a better branchless bank to park your funds, Betterment is worth a closer look.

Betterment’s Products and Key Features

Betterment has two core plans for investors, both of which assess fees based on users’ asset balances. Betterment also offers a cash management and checking account for day-to-day and longer-term money management needs along with some other value-added features available to all users.

Account Opening Bonus

For a limited time, get up to one year managed free when you open a Betterment account and make a qualifying deposit within 45 days. Your bonus is calculated based on your account funding amount:

  • 1 Month Free: Fund your account with $15,000 to $99,999 within the qualification period.
  • 6 Months Free: Fund your account with $100,000 to $249,999 within the qualification period.
  • 12 Months Free: Fund your account with $250,000 or more within the qualification period.

This offer is available to U.S. residents only and can’t be combined with any other offers. See our list of the top brokerage account promotions for more details.

Investing Plans and Pricing

Betterment offers two investing plans: Digital and Premium. Both plans allow investors to open and invest with a variety of taxable and tax-advantaged brokerage accounts (individual retirement accounts), including:

Both plans also allow investors whose income or tax filing status disqualify them from contributing to Roth IRAs to convert traditional IRA balances to Roth IRA balances right in the Betterment app. This maneuver is known as a backdoor Roth conversion (or simply Roth conversion) and may have significant tax benefits.

Betterment Digital Plan

The Digital plan has no minimum deposit requirements or ongoing balance requirements. It has a flat annual fee of 0.25% of assets under management (AUM) if your balance is above $20,000 and a $4 monthly fee if your balance is under $20,000.

The Digital plan’s capabilities and benefits include:

  • Flexible portfolio construction (a version of Betterment’s core portfolio, composed of sector and ETFs backed by low-cost issuers like Vanguard) based on your stated risk tolerance, financial goals, and investing objectives
  • Optional access to Betterment’s three socially responsible investing (SRI) portfolios: Broad Impact (focused on broad environmental, social, and governance goals), Climate Impact (focused on low-carbon companies and industries), and Social Impact (focused on minority empowerment and gender diversity)
  • Standard robo-advisor portfolio management functions, like periodic portfolio rebalancing to optimize asset allocation and dividend reinvestment via fractional share investing
  • Automatic tax minimization activities, like tax-loss harvesting (which reduces taxable capital gains)
  • Access to Betterment Checking and Cash Reserve accounts at no additional charge

Betterment makes these features and benefits available regardless of account type or investment strategy. With the Digital plan, they’re yours whether you have a taxable account, a tax-advantaged account, or both.

Betterment Premium Plan

The Premium plan requires a $100,000 minimum balance across all tax-advantaged and taxable accounts, at which point Betterment prompts both Digital plan members and new account holders to upgrade. The upgrade is strictly optional.

Premium has a flat annual fee of 0.40% of AUM, regardless of balance. It includes all the features and capabilities of the Digital plan, including automatic rebalancing and access to a variety of low-cost exchange-traded funds across multiple flexible portfolios, plus:

  • Unlimited access via phone and text with Betterment’s in-house team of Certified Financial Planners (CFP professionals)
  • Advice on investments held outside Betterment (including those held with other brokerages) from Betterment’s in-house financial planners, including asset allocation and tax minimization guidance
  • Optional access to Goldman Sachs Smart Beta Portfolios, a more sophisticated (and potentially higher-risk) investment strategy developed by Goldman Sachs Asset Management

Banking and Cash Management Products

Betterment has two deposit account options with virtually no fees: Betterment Checking and Betterment Cash Reserve.

Betterment Checking

Betterment Checking is an online checking account that’s FDIC-insured up to $250,000 through NBKC Bank, Betterment’s partner bank. It’s available for individuals and joint account holders.

Betterment Checking’s top features include:

  • A tap-to-pay Visa debit card that earns rewards on purchases with thousands of merchant partners, including major consumer products vendors like adidas and national retailers like Walmart
  • ATM fee and foreign transaction fee reimbursement worldwide
  • Card security controls (including card locking) through the Betterment mobile app

Betterment Cash Reserve

Betterment Cash Reserve is a cash management account with a competitive interest rate (APY) on all balances and virtually no account fees. Its key features include:

  • No limits on inbound and outbound transfers from and to external accounts, unlike most savings accounts
  • FDIC insurance up to $1 million, compared with the typical savings account limit of $250,000 per account
  • Savings buckets for specific goals with automatic, recurring transfers for each

Retirement Planning Tools

Betterment offers free retirement planning tools for DIY savers and investors. While these can’t replace customized, one-on-one advice from a human financial planner, they’re useful for Betterment users who aren’t sure where to start on the road to retirement and other long-term goals.

Among other things, Betterment’s retirement planning tools help users estimate how much they’ll actually need in retirement and provide semi-customized advice about getting there in the most efficient way possible.

Betterment Savings Goals

Betterment can also help with nonretirement savings goals, both nearer-term (like saving for a new car) and longer-term (like funding a child’s college education).

Financial Advice Packages

For Digital plan and banking-only users who aren’t eligible for unlimited financial planning assistance, Betterment offers a la carte financial advice packages that cost $299 for a 45-minute session and $399 for a 60-minute session. These packages cover five broad themes:

  • Getting started with Betterment (basic account setup and optimization), 45 minutes
  • Retirement planning, 60 minutes
  • Financial check-up (general review of investments and financial position), 60 minutes
  • College planning, 60 minutes
  • Marriage planning, 60 minutes

Betterment Satisfaction Guarantee

Betterment has a satisfaction guarantee that, while not without exceptions, provides some peace of mind. The terms of the guarantee are simple: If you’re not satisfied with your Betterment advisory experience for any reason, Betterment will waive your advisory and brokerage fees for an upcoming period of 90-days.


Betterment is a low-cost robo-advisor and online banking platform that makes it easy to plan, save, and invest for the future. Although not a replacement for a full-service financial advisor or planner, it does replicate some of the functions offered by those professionals.

  1. Betterment Is a Fiduciary. The Betterment investment platform operates as a fiduciary. In plain English, this means it’s required to act in its clients’ best financial interests. This is a fundamental advantage over non-fiduciary investment advisors and financial planners whose first loyalty is often to their own profit margins — and who can steer clients into subpar investments that pay higher commissions or fees.
  2. No Minimum Balance Required to Open a Checking or Investing Account. Betterment doesn’t impose any minimum balance requirements for its deposit or investment accounts. This is good news for low-asset savers and investors just starting out.
  3. Virtually No Cash Account Fees. Betterment’s Checking and Cash Reserve accounts are virtually fee-free. Notably, Betterment Checking automatically reimburses ATM fees worldwide, all but eliminating a hidden cost of using cash.
  4. Reasonable Asset Management Fees. Betterment’s asset management fees are reasonable by robo-advisor standards. The Digital plan charges a flat 0.25% of AUM for balances above $20,000 and $4 per month below that threshold, while the feature-rich Premium plan charges a flat 0.40% of AUM. Both are significantly less than a full-service human financial advisor.
  5. Backdoor Roth Conversion in the Betterment App. Betterment makes it easy to execute backdoor Roth conversions in the app, unlocking potentially significant tax savings for investors whose income or tax filing status make them ineligible to contribute directly to Roth IRAs. This might sound like a niche capability, but it’s often intimidating for DIY investors.
  6. DIY Financial Planning Tools at No Additional Charge. All Betterment users have access to free, DIY-friendly financial planning tools at no additional charge. For capable investors, Betterment’s retirement planning tools and savings goal architecture might just make human assistance redundant.
  7. Flexible Financial Advice Packages Available for an Additional Fee. Betterment makes a la carte financial advice packages available to all users for a reasonable additional fee, starting at $299 for a 45-minute consultation and $399 for a 60-minute meeting. These packages are useful for users looking ahead to major life events like marriage, college planning, and retirement.


Betterment has some significant drawbacks. As noted, it’s not a suitable replacement for a full-service financial advisor or planner, and it can’t accommodate self-directed investors or alternative investments.

  1. No Self-Directed Investment Options. Betterment is not suitable for self-directed investors looking to build fully customized portfolios composed of individual stocks and other market-traded instruments. As a fundamentally passive platform, it’s better for investors OK with allowing advisors — automated or human — to do the heavy lifting.
  2. No In-House Full-Service Wealth Management Option. Although Premium plan holders do have access to in-house financial planning professionals, Betterment doesn’t offer full-service wealth management. For investors hoping to consistently beat the market or take advantage of more advanced wealth management strategies that robo-advisors typically can’t accommodate, Betterment leaves something to be desired.
  3. Limited Access to Alternative Investment Opportunities. Betterment isn’t the place to profit from alternative investment opportunities like cryptocurrencies, forex (currencies), or even options. That’s fine for most investors, but more sophisticated, risk-tolerant market participants won’t be satisfied here.

Final Word

Betterment isn’t the only low-cost robo-advisor worth considering. It competes against other well-known robo-advisors and low-cost automated investing providers like Wealthfront, Personal Capital, and M1 Finance, to name just a few.

Betterment has some real advantages over the competition, though. It has been in business for more than a decade, giving risk-averse investors confidence that it won’t simply disappear overnight. It has a nice banking vertical that’s ideal for both day-to-day and long-term money management. And it offers flexible financial advice packages for an additional fee, going partway toward accounting for the lack of in-house human advisors.

Is Betterment right for you? That depends on what you hope to get out of a robo-advisor relationship. It certainly deserves your consideration.

The Verdict

Betterment New Logomark Color

Our rating



Betterment is a well-rounded investing and banking platform with low fees and no account minimum for new account holders.

On the bank account side, it’s ideal for managing day-to-day funds, short-term financial objectives, and longer-term savings goals. For investors, it’s a solid alternative to a full-service human wealth manager, although it can’t replicate sophisticated self-directed investing platforms (nor does it try). Useful DIY financial planning tools and a la carte financial advice packages add value for cost-conscious users.

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

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