Betterment review: Is it still one of the best robo-advisors?

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By Larry Ludwig

🗓️

Updated: February 15, 2026

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4.5

4.5

Commissions and fees 4

Customer service4.5

Ease of use 4.5

Tools and resources 4.5

Investment options 4.5

Asset allocation 4

Paid non-client of Betterment. Views may not be representative, see more reviews at the App Store and Google Play Store. Learn more about this relationship.

Betterment has risen to the forefront as one of the most popular robo-investing platforms in the industry. It makes it easy for beginner investors to get started, while also providing useful tools for those who are more experienced.

Perhaps best of all, Betterment's basic account comes with an annual advisory fee of just 0.25%. If you need one-on-one help, you can also upgrade to Premium for an additional 0.40% which gets you unlimited access to human advisors.

In addition to its investing features, Betterment has a high-yield cash account which makes it easy for clients to organize all of their finances in one place. Keep reading our full Betterment review to get the full details about each of these features and more.

Pros and cons

What is Betterment?

Betterment is a robo advisor that uses computer algorithms to generate personalized advice and manage your investment portfolio. It's designed so that you have access to a lot of automated options. And because the process is streamlined, it requires little day-to-day involvement. Compared to traditional investment options, it's “set it and forget it.”

This robo advisor is all about the endgame, walking you back through the steps required to meet your end goal. From your initial deposit, monthly savings, and time horizon, Betterment will tell you the chances of achieving your objective.

The company's goal is to maximize your return while at the same time minimizing your risk. Although this sounds like an impossible task, in reality, it's not. So how the heck does Betterment do this? The service uses Modern Portfolio Theory or MPT for short. By investing in a diverse pool of assets, it should collectively lower your risk yet stabilize your returns over the long term.

But is Betterment the best robo-investing service out there?

Betterment features

Betterment portfolios: Choose different investing strategies

Betterment has grown beyond offering just one portfolio, and there are now options to customize. It recommends a portfolio to you based on two parts- asset allocation and fund selection. It includes a combination of stocks and bonds.

Depending on your allocation of stocks to bonds, Betterment adjusts the allocation of each individual ETF to meet the efficient frontier. In plain English: Betterment has optimized the portfolio to give you the best performance possible.

Available portfolios:

Betterment Core Portfolio

Investors who are looking for reasonable growth rates at moderate risk often turn to Betterment’s signature Core Portfolio. As the original investment vehicle on Betterment, this plan has the longest track record of success with an annualized return at 10%. To achieve this average rate of return, Betterment focuses on diversification in its ETF choices (which account for 90% of the portfolio) as well as some bond exposure for extra stability. A few major holdings that often appear in the Betterment Core Portfolio include the SPDR Portfolio S&P 500 ETF, Vanguard Mega Cap Growth ETF, and iShares Core US Aggregate Bond ETF.

In addition to their core portfolio, Betterment also offers the BlackRock Target Income Portfolio and the Goldman Sachs Smart Beta Portfolio.

BlackRock Target Income Portfolio

The BlackRock Target Income Portfolio is a diversified 100% bond basket. Investors can choose from four risk levels, each with its own targeted level of income yield. The higher the potential income, the greater the risk.

This portfolio could be a solid choice for retirees looking for stable, dependable income as well as a way to preserve their nest eggs. It's also a solution for investors who would like a lower-risk investment than stocks.

Goldman Sachs Smart Beta Portfolio

For investors who feel OK taking on slightly higher risk for potentially higher returns, Betterment offers a Goldman Sachs Smart Beta Portfolio that invests primarily in ETFs that meet certain valuation characteristics. To be considered for this portfolio, managers have to identify one of four potential factors such as the company’s value relative to the market, overall volatility, or sustained upward momentum.

By focusing on these factors, Betterment aims to acquire shares that have greater potential gains versus the overall market. Although this portfolio has slightly higher risk than income-focused options like the BlackRock Target Income Portfolio, it’s also well-diversified with a mix of various ETFs and bonds.

With a smart beta approach, overall market performance is considered only one of many factors that can affect investment returns. By addressing other factors, this strategy means more risk but also the potential for higher returns.

Socially Responsible Investing Portfolio

In addition to the three portfolios outlined above, Betterment also offers socially responsible investing (SRI). 

In designing its SRI portfolio, Betterment took two goals into account:

1. 1 Reducing exposure to companies involved in activities deemed irresponsible on either an environmental, social, or governmental level.
2. 2 Increasing exposure to companies that are striving to solve ecological and social challenges.

Bettement has three SRI focused portfolios:

• Broad Impact Portfolio — This includes ETFs with high ESG ratings and keeps investments balanced.
• Climate Impact Portfolio — For investors that want to make sure they're supporting companies working to reduce carbon emissions. Includes ETFs that are focused on green investments.
• Social Impact Portfolio — This includes two ETFs that support companies empowering minorities and promoting gender equality in the workplace.

Alternatively, Betterment lets investors donate their shares to causes they care about through the donor-advisor fund Daffy. Not only is this a great way to support charities you care about, it helps lower capital gains taxes on whatever shares you donate.

Betterment's socially-responsible portfolio options are great for investors who want their dollars to impact the world and make sure they are investing in companies that are helping make the world a better place.

Innovative Technology Portfolio

Betterment's Innovative Technology Portfolio includes several emerging industries such as clean energy, semiconductors, robots, virtual reality, blockchain, nanotechnology, and more. With this portfolio, you get access to a variety of high-growth potential innovation trends with increased exposure to risk.

Because innovation is constantly changing, this portfolio also refreshes regularly. It invests in new early-state innovators on a regular basis. It's balanced across a variety of asset types to keep your portfolio diversified over the long-term.

Keep in mind that high-growth innovation stock exposure decreases with increasing bond allocation.

Value Tilt Portfolio

Although the Value Tilt Portfolio includes an array of ETFs and bonds from around the world, it’s unique feature is the “tilt” toward undervalued US companies. By trying to buy US stocks that are perceived to be lower than their intrinsic value or below the overall market, Betterment is trying to get a more favorable entry price so the gains are higher if these stocks rally. Similar to the Goldman Sachs Smart Beta Portfolio, the Value Tilt Portfolio has a higher degree of risk but also potentially outsized gains.

Crypto ETF

If investors have a strong tolerance for risk and want growth at all costs, then Betterment offers a Crypto ETF Portfolio that invests almost all of its funds into Bitcoin and Ethereum ETFs. Although there’s some bond exposure in this automated account, the value of these holdings will mirror the price performance of the world’s top two cryptocurrencies. Although the Crypto ETF grew 57% between September 2024 and December 2025, investors have to keep in mind that crypto assets are some of the most unpredictable and don’t have as long of a track record as more traditional assets like stocks, bonds, and mutual funds.

Goldman Sachs Tax-Smart Bonds

For anyone in a higher tax bracket, Betterment’s Goldman Sachs Tax-Smart Bonds Portfolio may be the ideal way to optimize annual yield. As the name highlights, this investment portfolio focuses on the most tax-efficient bonds so investors enjoy more after-tax interest compared with other Betterment products like the Cash Reserve. Just keep in mind that unlike the Cash Reserve there’s no FDIC insurance with these bonds, and there’s always the potential for price volatility. Betterment recommends this particular portfolio for anyone with a federal tax rate of above 32%.

Who Is Betterment best for?

Betterment makes investing easy for beginners. With Betterment, there’s no need to research which investments you need to purchase for your portfolio. The service does this for you automatically. But more advanced investors may want to take advantage of Betterment's tax-conscious advice and features, as well.

Recently, Betterment strengthened its holistic approach to help you reach your goals by allowing you to link up external investing and retirement savings accounts. This way you can get a better, more complete picture of where you are on reaching retirement (or a new house, college education for your kids, etc.). Betterment analyzes these external accounts to advise you on their asset allocation, as well as projecting what your money would look like if you rolled those accounts over to the robo advisor.

Also, you can now manage all of your finances through Betterment's Cash Reserve and Checking service. Not only does this make it easy to fund your investing account, but you can also earn interest on the cash you aren't using and spend with a debit card.

Other Betterment accounts and features

Betterment's variety of investment portfolios is where this robo advisor shines. But there are also several other account types and features customers can take advantage of:

1. Betterment Cash Reserve

Do you have a stash of savings? Not thrilled about your current bank’s interest percentage? If so, you may want to consider transferring your money into Betterment’s Cash Reserve feature. This account works similar to a high-yield savings account, typically with percentage returns multiple times higher than the national average.

Plus, since Betterment partners with multiple program banks, it can offer FDIC insurance of $2 million for individual accounts. There’s no minimum, no fee, and no restrictions on withdrawals to open your Cash Reserve. Simply send as much or as little into your Betterment Cash Reserve and enjoy the higher-than-average interest.

Betterment Cash Reserve APY Disclosure - Annual percentage yield (variable) is as of 9/26/2022. Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities.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.

Further Reading: Betterment Cash Reserve review.

2. Betterment Checking

If you don’t mind a digital-only banking experience, you can also open a no-fee, FDIC-insured checking account through Betterment. In partnership with NBKC bank, Betterment Checking gives you the flexibility to store and spend your money through multiple convenient ways, including a Visa debit card, Apply Pay, Google Pay, and paper checks.

To cut down on costs, Betterment eliminated overdraft fees and reimburses all ATM and foreign transaction fees through this checking account. You can also open a joint Betterment Checking account if you want to pool money with your partner.

Although you won’t get the convenience of physical branches, the Betterment Checking portal is a cost-effective, safe, and mobile-friendly option — especially if you’re already saving and investing on Betterment.

Further Reading: Betterment Checking Account review

3. Betterment Premium

Betterment’s claim to fame is its robo-advisory features that make it simple to use and affordable. However, there may be situations where you want more of a personal touch when managing your money. For these cases, Betterment created a Premium account where you get to speak with a Certified Financial Planner (CFP) and build a tailored investment strategy. A Premium account also includes many other benefits, such as tax advice, a securities-backed line of credit, and an extra 0.25% APY for Betterment’s Cash Reserve. Betterment Premium members can also get started with estate planning with a 20% discount at Trust & Will. 

But unlike Betterment’s standard services, there is a minimum to become a Premium member. You need to deposit at least $100K to get a Betterment Premium account. Also, the annual fee for Betterment Premium is 0.65%, which is higher than the ordinary robo-advisor service.

4. IRAs, 401(k)s, and rollovers

If you want to use Betterment’s services while enjoying tax breaks, you could easily open a Traditional, Roth, or SEP IRA and start contributing to your preferred portfolio. Betterment also offers rollover assistance if you have a pre-existing plan with an employer and even solo 401(k)s for self-employed individuals. All of these accounts have the same IRS maximums and tax benefits you’d find on other IRA-friendly websites, but they let you invest in the approved assets on Betterment. 

5. Easy account setup

The signup process for Betterment is easy and takes approximately five minutes.

1. 1 First of all, you respond to a series of short questions about your investment needs.
2. 2 There is also a slide bar that allows users to set the allocation of their assets — e.g., 60% stocks with 40% bonds. It will also suggest an asset allocation to keep you on track with your goals.
3. 3 Once you've made your choices, you must then link your personal checking account. You can either transfer money into your Betterment account whenever you want or set up an automated deposit.

When money is moved into the account, Betterment will then automatically purchase exchange-traded funds (ETFs). The purchases will be made based on the way you've defined your asset allocations. Your investments are very liquid, and selling your investments is also made simple. Betterment will perform the “sell” trades for you. Any dividends earned will be automatically reinvested. Portfolios are rebalanced, and tax-loss harvesting is applied (if required) daily.

6. Goal-based investing

Investing has an aim, and Betterment wants to help get you there with its “goal-based” features. With your Betterment account, you can set multiple goals for purchases large and small as well as your overarching objective for retirement savings. Betterment will take all of this data into account when suggesting portfolios that have the highest chance of getting you where you want to be financially.

You can also get a more realistic picture of your performance by linking external accounts for a more comprehensive look into your current situation. Incorporating these forecasting tools into your Betterment account helps you track your progress and make adjustments along the way for the best odds of success.

Customer service

Betterment offers both phone and email customer support for all of its cash and investment accounts. Betterment's phone support is available Monday to Friday from 9:00 am-8:00 pm (ET).

They also offer email support if you're rolling over or transferring an account to their service.

Betterment security

Betterment has many safety features in place to protect its users data and prevent unauthorized access. To start, this company uses a storage system called “bcrypt hash” for password data, and it restricts access to personal information to a minority of its high-ranking employees.

To further prevent unauthorized access, Betterment offers two-factor authentication to all of its users. Betterment also uses Transport Layer Security (TLS) encryption between its website and your web browser to create a privacy connection, and it automatically logs users out after a specific period of time. If you have any concerns about fraud, you can reach out to Betterment’s customer care team to get the issues addressed ASAP.

How much does it cost to use Betterment?

One of the attractive features of robo-advisors like Betterment is they offer lower fees than personal financial advisors. Since you’re relying on algorithms on a digital native platform, there’s a lot less overhead Betterment has to worry about, which translates to lower fees on your investments. 

The amount you’ll pay Betterment depends on how much you deposit into an investment portfolio and whether you’re using the standard or a Premium account. For the standard investing account, there’s a flat fee of $5 per month if you have a balance below $24,000. For any account over $24K, however, there’s an annualized fee of 0.25% of your portfolio. One caveat to this fee structure is that Betterment allows a 0.25% fee on accounts below $24K provided you set up a monthly recurring deposit of at least $250. 

For Betterment Premium, you’ll need to pay 0.65% per year on your investment portfolio. Also, remember that Betterment Premium has a minimum deposit of $100K.

Personalized financial advice with a human advisor

Although the annual fee to work with a CFP through Betterment Premium is 0.65%, there is a way to get financial advice without paying anything. You don’t even need a Betterment account to take advantage of this call. Currently, Betterment offers one courtesy call with a financial advisor to go over your financial situation if you’re eligible to open a Betterment account and plan to invest at least $20K. To schedule an exploratory call, you’ll need to send your email to the Betterment concierge team and explain what services you’re most interested in to better tailor your session.

Cash and checking account:

Unlike Betterment’s investment accounts, you don’t need to pay any fees to deposit money into Betterment Checking or the Cash Reserve. There are also no fees to withdraw or transfer money in the Betterment Checking account.

Betterment promotion: Get up to one year free

Before setting up a Betterment account, it’s worth checking whether there are any limited time offers to get an extra boost when you start saving. For example, at the time of writing, you could enjoy a temporary 0.65% increase in the Cash Reserve’s base rate.

Betterment is also currently offering a tiered cash bonus for new investors after they deposit money into their investment portfolio. These cash bonuses range from $50 - $1,000 for deposits between $1,000 - $175,000+.

Since promotions constantly change, be sure to check Betterment’s official website for the latest details on any special introductory incentives.

How Is Betterment different?

Betterment was created to make investing as easy as opening a bank account. But let me be clear: Although the service is an SEC-registered broker-dealer and a member of FINRA/SIPC, its investment options are not FDIC insured. Only Betterment’s Cash Reserve and Checking accounts are FDIC insured. Therefore, your returns are not guaranteed and are subject to market risk. It's possible your investment could lose principal. But if you look at other investment options that don't have the principal risk, you'll see that they still have different risk types.

With Betterment, you don't own individual stocks or bonds; instead, investments are held in the form of exchange-traded funds (ETFs). The ETFs own a portion of the equities market via indexing. As a plus, the asset allocation among these various ETFs ensures your account is not weighted too heavily in one particular area, company, country, or sector. While this doesn't lead to unreasonable returns, it prevents you from putting all of your eggs in one basket.

Betterment is the largest independent robo advisor (we think it's one of the best). Unlike the robo investing products offered by big names such as Schwab Intelligent Portfolios or Fidelity Go, Betterment doesn't own any of its recommended funds. It's also a fiduciary, meaning it's legally bound to act in your best interest. So you can have peace of mind that the platform is working for you.

Add the fact that you can manage all of your personal finances with Betterment’s Cash Reserve and Checking account, and it’s a service that even the most experienced investor could find appealing.

Betterment competitors

Betterment is one of our favorite robo-advisors because of its low fees and the variety of portfolio strategies you can choose.

However, it's far from the only robo-advisor on the market. And depending on your goals and net worth, certain Betterment alternatives might be better options.

Empower isn't actually a robo-advisor, but if you have at least $100,000 to invest, you get to work with a professional investment manager to build a portfolio that matches your goals. The downside is that annual management fees start at 0.89% which is significantly higher than Betterment.

Empower also has a host of free tools to help you optimize your investing to save on fees and a useful financial tracking dashboard to monitor your net worth.

As for Wealthfront, it's another beginner-friendly robo-advisor like Betterment. The main differences are that Wealthfront requires $500 to get started but has slightly more customization control for the ETFs you invest in. However, Wealthfront doesn't provide access to human advisors unlike Betterment.

For more reading on Betterment competitor's, you can check out:

• Betterment vs. Wealthfront
• Empower vs. Betterment
• Betterment vs. Ellevest vs. M1 Finance
• Betterment vs. Fundrise
• E*TRADE vs. Betterment vs. Fidelity
• Betterment vs. E*TRADE vs. Robinhood

Bottom line: Is Betterment worth it?

Without question, Betterment's fees are much lower than you'd find if you were to hire a traditional financial advisor. If anything, with a professional money manager, you would get similar or weaker returns but pay much more in management fees.

And with the introduction of human advisors, Betterment has become a formidable competitor to Vanguard's Personal Advisor Services. Still, the more advanced investor might be better off managing their investments themselves to access a more diverse asset allocation selection and save money in annual fees in the process.

With a focus on the end-user, Betterment aims to provide users with a holistic plan to help them maximize their portfolios and meet their goals. If you're looking for strategies for improving all of your investment portfolios, Betterment might be a great fit for you.

Betterment Cash Reserve Disclosure - 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. 

Larry Ludwig Contributor

Larry Ludwig Contributor

Larry Ludwig is a freelance contributor for Moneywise.

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