Betterment vs. Acorns: Which Broker Is Right for You?

Betterment and Acorns are two of our highest-rated robo-advisors, as both do an excellent job of automating appropriate investment portfolios for their customers. However, there are some key differences between these two platforms that are important to know if you're choosing one. In this article, we'll do a side-by-side comparison of Betterment and Acorns, so you can determine if one is a good fit for you.

Both Betterment and Acorns are pure robo-advisors. They don't offer individual stock trading, mutual funds, or other active investment options like you'd find with a traditional brokerage account. Like most robo-advisors, both platforms charge a management fee. However, the way each charges fees is very different.

Betterment charges a fee of either 0.25% of invested assets annually, or a flat fee of $4 per month for its standard plan. It also has a Premium plan for investors with over $100,000 in their accounts that provides unlimited access to Certified Financial Planners™ by phone, and this comes with a slightly higher 0.40% annual management fee.

Acorns, on the other hand, charges a flat monthly fee for its services. It has three monthly plans, with varying levels of account features, with costs of $3, $5, and $9 per month.

As mentioned earlier, Betterment and Acorns are robo-advisors. They don't allow customers to buy individual stocks or any other investment options directly.

Having said that, like most robo-advisors, both Betterment and Acorns use exchange-traded funds (ETFs) when creating an investment portfolio for their customers, and since neither has an account minimum, they naturally incorporate fractional shares into investment strategies.

It's also worth noting that both offer cryptocurrency investment choices. Betterment offers managed and automated cryptocurrency portfolios that consist of multiple digital assets. Acorns doesn't offer standalone cryptocurrency portfolios, but gives investors the option to allocate as much of 5% of their money into a Bitcoin ETF.

Since both Betterment and Acorns are robo-advisors, they offer automated investment accounts. But it's important to point out that these come in several different forms.

Both platforms offer individual standard (taxable) robo-advisor accounts, traditional and Roth IRAs, and SEP IRAs. Betterment is the only one that offers joint accounts, while Acorns is the only one that offers custodial (UGMA/UTMA) accounts.

Both offer checking accounts in partnership with banks. Betterment offers an excellent cash reserve account that is competitive with the top high-yield savings accounts in the market.

Both of these robo-advisors are app-centered, so they both have top-notch mobile apps. Betterment's app is one of the most highly rated financial apps in the App Store and Google Play store, and the same is true for Acorns. In short, having a user-friendly app is an area where both of these platforms shine.

As mentioned, these are both top-tier robo-advisors, but there are some key differences that could make one more appealing to you than the other. For larger accounts, Acorn's flat monthly fee could make it a significantly cheaper option, just to name one example. And if you're planning to open a joint investment account with your spouse, Betterment is the clear winner. The bottom line is that the best one for you depends on what features matter the most to you.