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2022 Betterment Review – Automated Robo Advisor with a Human Touch

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No minimum deposit
Socially-Responsible & Crypto investing options
Great flexibility for hands-on investors
Access to human advisors (Betterment Premium)
Excellent banking features
$100,000 minimum deposit required for Premium plan
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Is Betterment the ideal automated investing service for you? We’ll answer that question with our comprehensive Betterment review for 2020. 

Betterment was one of the very first robo advisors in the world of automated investing. The company manages more than $18 billion AUM (Assets Under Management) as of June 2019.

 We’ll show you the pros and cons of the robo advisor so you can decide if Betterment is worthy of your investment funds.

Betterment Fees

First off, we’ll start our Betterment review by analyzing the management fees and deposit limits.

Back in 2016, Betterment offered the distinct benefit of not imposing any transaction, trade or rebalancing fees.

Betterment’s fees are either 0.25% or 0.40% annually, depending on which plan you choose. The Betterment Digital plan is good for most investors at 0.25%, but if you have over $100,000 to invest, you can get premium features and investment tools for Betterment Premium, at 0.40% annually.





Betterment Digital

This is the traditional hands-off Robo Advisor that gives advice on how to save for your retirement, saving for other financial needs (buying a new house or a new car), and choosing the best IRA. You get all this with no minimum balance, and it will only cost you 0.25% per year.

This is not bad. Considering the fact that the Betterment Digital Plan includes tax loss harvesting, tax-coordinated portfolios, automatic rebalancing, and unlimited access to licensed financial experts, this service will also allow you to sync all your external accounts so you can get a clearer view of all your investments

Betterment Premium

Think of Betterment Premium as an upgraded version of the Betterment Digital plan. You get unlimited access to CFPs who track the changes in your investment accounts, even when you’re sipping coconut water and soaking up the sun in Barbados.

Betterment Premium also gives you access to expert advice on all your investments outside of Betterment so you can manage and grow your real estate or individual stocks and grow your external investment portfolio.

This plan is perfect for those who own multiple assets or want to be more involved, while getting access to unlimited financial advice. The Betterment Premium Plan requires an initial deposit of $100,000 and has a fee of 0.40%, so it’s definitely more suited for high-net-worth investors.

Betterment Performance & Returns

Betterment provides data that compares their various portfolios to average returns based on real performance numbers provided by participating investment managers. Betterment has compared their returns with the average returns of independent investment managers for more than 30,500 periods. Comparing these returns has shown Betterment to outperform the average return 88% of the time.

Betterment offers performance data from 10 different portfolios ranging from 0% stock and 100% bond to 100% stock and 0% bond. A 100% stock portfolio would be the most aggressive portfolio, while a 100% bond portfolio would be conservative.

From 2004, since Betterment started, the average return has been between 2.5 – 6%. But, your gains depend on your risk tolerance and the timing of your investments.

There is an interactive widget that provides insight into how different portfolios have performed over every period. For example, you can see that if you invested in a 50/50 portfolio in 2013, the Betterment return is 30.9%, and the average return is 18.5%. You will also see the best month, worst month, and last 12 months.


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Flexibility is a crucial aspect in our Robo Advisor reviews. Betterment is a fully-automated investment service, with the option of being more hands-on with Betterment Premium.

This is Betterment’s way of attracting more investors; especially big players who want more control and flexibility in managing their accounts. The Premium plan comes at a price, but it’s hard to fault Betterment when it comes to flexibility. We do wish they had a lower account minimum for the Premium plan.

However, kudos to Betterment for retaining the Digital plan. This means that after signing-up, transferring your funds, and making some early allocation decisions, the portfolio management process is taken completely out of your hands.

Betterment takes control of reinvesting dividends and rebalancing your portfolio, so there is no need for you to do anything.

Sounds perfect for newbie and hands-off investors, right? Indeed, as long as you prefer the hands-off approach to investing. This is the core of what a true robo advisor is.

Ease of Use

The whole point of using a robo advisor is to make your life easier and to make you money from your investments. With that in mind, we’re proud to say that Betterment is easy to use, and it starts with the quick and simple sign-up process.

The first step is to link your checking account for quick deposits and withdrawals. Next, you’ll answer a few questions about your investment preferences, then you will receive your first portfolio advice.

The Betterment site itself also has some handy tools to help you understand the different types of investments. One tool will help to allocate your funds between stocks and bonds by giving allocation advice based on your age and retirement plans.

Betterment Digital remains one of the easiest robo advisors to use. It is a fully-automated service which automatically rebalances your portfolio and reinvests dividends with little supervision.

With Betterment Premium, you can talk to expert financial advisors to make sure your investments are optimized to their full potential.

Account Types and Services

An easy-to-use Robo Advisor with fair management fees is important, but if it doesn’t offer the accounts and investment types you need, then you better look elsewhere.

In terms of account types, Betterment covers a full range of options by providing taxable accounts, Individual Retirement Accounts (IRAs) and even the Simplified Employment Pension version of those accounts (SEP IRAs) for individuals retiring from self-employment.

When it comes to types of investments, Betterment tends to focus on a selection of low-cost stocks, bonds and ETFs depending on your initial allocation. Once the investments are made, Betterment will handle all the portfolio rebalancing and dividend re-investments.

It also boasts features such as tax loss harvesting for taxable accounts worth at least $50,000, and a service that buys fractional shares to ensure that the cash in your portfolio is invested.

Betterment Cash Reserve

Betterment Cash Reserve is purported to be a better alternative to a traditional savings account. If you already have a Betterment Investment account, this could be the perfect place to store your emergency fund.

Betterment invests 80% of your money with U.S. Treasury bonds while the remaining 20% is invested in low-volatility corporate bonds. With Betterment Cash Reserve, you can earn up to 0.40% compared to the national average savings yield of 0.05%. This is FDIC-insured up to $1 million.

Keep in mind, Wealthfront also offers their own version of a savings account called “Wealthfront Cash”, which is currently returning an industry-leading 0.10% APY.

Betterment will also be introducing a checking account with debit card in the near future.

Betterment App

Betterment launched its mobile app for Android and iOS devices back in 2013. This enables you to manage your investment accounts using a compatible smartphone or tablet. The app has the same user-friendly interface as the desktop version and comes loaded with a full suite of features including:

  • Managing the stock and bond allocation in your portfolio.
  • Deposit and withdraw money from anywhere in the world.
  • Checking and analyzing the balance and returns of your investments.
  • Review your investment goals and account activity.

The Betterment app is free to download in the Apple App Store and Google Play Store.

Suitability for Different Investment Budgets

Betterment Digital is a solid choice for newbie investors. The lack of a minimum deposit makes Betterment accessible for any budget, big or small. You don’t have to pay trade, rebalancing or any transaction fees, either.

If you have a larger sum to invest (over $100,000) we would suggest going with Betterment Premium. The choice is yours.

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Betterment vs. Wealthfront

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Both Wealthfront and Betterment are fully automated robo advisors. Both of them are easy to use and are ideal for newbie investors. However, Betterment has the edge in terms of flexibility and account types. Betterment’s Premium account allows you to get involved while still having access to unlimited financial advice.

When it comes to fees and deposit limits, Wealthfront and Betterment Digital share the same 0.25% annual fee. But Betterment has a very slight edge since the service requires no minimum deposits. On the other hand, Wealthfront has a $500 minimum deposit – which is still not bad and remains one of the most affordable in the market.

The true test of a robo advisor is the historical returns. In this regard, Betterment is the winner with a higher 0.9% average annual return, but Wealthfront is not far behind with a 5-year return of 6.08% (taxable portfolios) and 6.92% (tax-advantaged portfolios) respectively.

Wealthfront does have a savings, or “cash” account that offers a higher return and is still one of the best hands-off robo advisors on the market. When it comes down to it, which service you should choose depends on your personal preferences. Both are great services and will serve you well, although we think Betterment currently has a slight advantage.


Betterment is one of the longest-established Robo Advisors online. It should come as no surprise that they are an excellent choice for newbie investors, especially if you choose the hands-off Betterment Digital plan.

The full range of account types and features (including automatic rebalancing and automatic dividend reinvestment) are impressive.

Added extras like tax loss harvesting (for accounts over $50,000) make Betterment one of the best robo advisors around.

Betterment is a brilliant choice for many, but the Premium plan is only suitable for investors with a higher amount to invest.


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