Updated
Fact Checked
Eric McWhinnie
E*TRADE and Betterment are two of our highest-rated investment platforms, but they have major differences. Betterment was one of the pioneers in the automated investing, or robo-advisor business, while E*TRADE is a full-featured brokerage platform (which also has a robo-advisor of its own). In this article, we'll compare the two to see which might be the best fit for you.
E*TRADE vs. Betterment: At a glance
| Offer |
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|---|---|---|
| Rating |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
| Commissions |
Commission-free; other fees apply |
$0 per trade, management fee of $4 per month or 0.25% per year |
| Account Minimum | $0 | $0 |
| Next Steps |
|
E*TRADE vs. Betterment: Commissions & fees
As a full-featured brokerage that primarily offers self-directed investments, E*TRADE has joined the rest of the industry in eliminating commissions on stock trades. It charges a reasonable fee for options trades on a per-contract basis.
Betterment is a robo-advisor, so it charges a management fee based on the amount of assets invested. For the standard plan, Betterment's management fee is 0.25%, and there's also a Premium plan that is offered to clients with $100,000 or more in their accounts. The Premium plan costs 0.40% annually, but includes access to real-live financial planners.
It's also worth noting that E*TRADE has its own robo-advisor platform, known as E*TRADE Core Portfolios, which has a 0.30% annual management fee.
| E*TRADE | Betterment | |
|---|---|---|
| Stock & ETF commissions | $0 | N/A |
| Options commissions | $0 + up to $0.65/contract | N/A |
| Crypto commissions | N/A | N/A |
| Mutual fund commissions | $0 | N/A |
| Account transfer fee | $75 (full transfers only) | $75 |
| Account maintenance fee | $0 | 0.25%-0.40% annually |
Data source: E*TRADE and Betterment.
E*TRADE vs. Betterment: Investments available
E*TRADE offers a wide variety of investment choices. Clients can invest in stocks and ETFs, options, mutual funds, bonds, and futures. E*TRADE also offers brokered CDs (CDs offered through third-party banking partners). On the other hand, E*TRADE is one of the few major brokers that has not adopted fractional share investing, and doesn't offer any exposure to cryptocurrencies.
Betterment's robo-advisory platform invests clients' money into portfolios of ETFs, and with no minimum to invest, it supports fractional share allocations. While Betterment doesn't offer direct cryptocurrency investments, it offers managed (automated) cryptocurrency portfolios as a choice for its robo-advisor customers.
| E*TRADE | Betterment | |
|---|---|---|
| Stocks and ETFs | Yes | Yes |
| Fractional shares | No | Yes |
| Options | Yes | No |
| Mutual funds | Yes | No |
| CDs | Yes | No |
| Bonds | Yes | No |
| Futures | Yes | No |
| Crypto | No | Yes |
| Currencies | No | No |
Data source: E*TRADE and Betterment.
E*TRADE vs. Betterment: Account types available
You'll see a lot of "yes" answers in E*TRADE's column in the table below. The firm offers pretty much any major type of investment account you can think of. It offers an excellent checking account and savings account through Morgan Stanley Private Bank.
Betterment offers robo-advisor accounts in several different forms. You can open an individual or joint taxable brokerage account, traditional or Roth IRA, or a SEP IRA. Betterment also offers checking and savings accounts through partner banks, and its Betterment Cash Reserve savings account product is an especially strong choice, even compared with our top high-yield savings accounts.
| E*TRADE | Betterment | |
|---|---|---|
| Taxable brokerage | Yes | Yes |
| Joint tenant | Yes | Yes |
| Margin | Yes | No |
| Robo-advisor | Yes | Yes |
| Traditional IRA | Yes | Yes |
| Roth IRA | Yes | Yes |
| Other IRA | Yes | Yes, SEP IRAs |
| Custodial | Yes | No |
| Checking | Yes | Yes |
| Savings | Yes | Yes |
| Credit card | Yes* | No |
Data source: E*TRADE and Betterment. *E*TRADE brokerage customers are eligible for the Morgan Stanley Blue Cash Preferred® American Express Card (Morgan Stanley is the parent company of E*TRADE).
E*TRADE vs. Betterment: Mobile app and trading platforms
E*TRADE offers several different ways to trade. It offers a web-based trading platform that is sufficient for most people, but it also offers its award-winning Power E*TRADE desktop platform that is popular amongst advanced traders. In addition, E*TRADE has two different apps -- the user-friendly E*TRADE Mobile app, and the feature-packed and powerful Power E*TRADE app.
Betterment's app is one of the highest-rated robo-advisor apps in both the App Store and Google Play Store. It's easy to navigate and to get started with investing.
Final take
As you can see, these are two very different platforms. If you're looking for a robo-advisor, we'd probably give the edge to Betterment, with a lower standard management fee and no minimums to get started. On the other hand, if you want to be able to automate some of your investing and have the ability to buy individual stocks in the same place, E*TRADE could be a great fit for you.
Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
| Account | Fees | Account Minimum | |
|---|---|---|---|
|
Featured Offer
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
$0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold | $0 | |
|
$0 for stocks, $0 for options contracts | $0 | |
Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
$0 commission for online U.S. stock and ETF trades; trade fractional shares for as little as $1 | $0 |
FAQs
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E*TRADE's Core Portfolios service is a solid robo-advisor, but Betterment was one of the pioneers in the space and is very good at what it does. Betterment has a significantly lower management fee, no account minimums, and some excellent features that make it one of the best robo-advisors in the industry.
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Robo-advisor management fees are expressed as a percentage of the assets in your account, per year. In other words, if you have a $100,000 portfolio and a 0.25% management fee, you'll pay $250 per year in management fees.
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Whether you make money on E*TRADE or not depends on a few factors, including the particular investments you buy, the stock market's performance, and the trading and investing strategies you use. There's absolutely no guarantee you'll make money on E*TRADE over any given period.
Our Brokerages Experts
Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
Fact Checked
Eric McWhinnie
Eric McWhinnie has been writing and editing digital content since 2010. He specializes in personal finance and investing. He also holds a bachelor’s degree in Finance.
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Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.
Fidelity disclosure
Fractional share quantities can be entered out to 3 decimal places (.001) as long as the value of the order is at least $1.00. Dollar-based trades can be entered out to 2 decimal places (e.g. $250.00)
E*TRADE services are available just to U.S. residents.
Betterment disclaimers
†Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.
Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC's Form ADV Part II.
**The annual percentage yield ("APY") on the deposit balances in Betterment Cash Reserve ("Cash Reserve") is 4.00% and represents the weighted average of the APY on deposit balances at the banks participating in Cash Reserve (the "Program Banks") and is current as of Feb. 6, 2023. This APY is variable and subject to change daily. Deposit balances are not allocated equally among the participating Program Banks. A minimum deposit of $10 is required, but there is no minimum balance required to be maintained. The APY available to a customer may be lower if that customer designates a bank or banks as ineligible to receive deposits. APY applies only to Cash Reserve and does not apply to checking accounts held through Betterment Checking. Cash Reserve and Betterment Checking are separate offerings and are not linked accounts.
For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.