Home » Comparisons » Betterment vs. Acorns

Betterment vs. Acorns – Which Robo-Advisor Is The Right One For You?

By Dave

Last Updated

Betterment vs Acorns

Advertising Disclosure

Betterment vs. Acorns

For individuals who want to invest their money without navigating the ups and downs of the market, a robo-advisor is an excellent option. These platforms invest your money automatically so that you can grow your wealth over time and save for big goals like retirement. The benefit of a robo-advisor is that you don’t need to do much at all to develop and maintain a balanced portfolio after setting up your account. 

Choosing the right robo-advisor for your needs is critical, though. Two of the biggest players in the space are Betterment and Acorns. Both offer low-cost plans and investment in similar types of assets, but they differ in the types of investing tools you’ll have at your disposal. In this guide, we’ll compare Betterment and Acorns head to head so you can decide which platform is right for you.

About Betterment And Acorns

Betterment was one of the earliest robo-advising platforms on the market. It was founded by CEO Jon Stein in 2010 and has swelled to more than 400,000 users over the past decade. Betterment now has an estimated $16 billion in assets under management.

Betterment vs Acorns - Betterment

Acorns was founded in 2014 by Walter and Jeff Crutenden. The company has been backed by financial partners, including PayPal, Blackrock, and Bain Capital, although it manages just over $1 billion in total assets.

Betterment vs Acorns - Acorns

Betterment vs. Acorns: Account Types

Betterment and Acorns each offer several different account types for banking and investing.

For investing, Betterment and Acorns each offer both standard investing accounts and retirement accounts, including traditional, Roth, and SEP IRAs. However, only Betterment offers 401(k) accounts, and neither platform offers education savings accounts or other types of investment accounts.

If you need checking and savings accounts, Betterment offers both for free. Betterment checking accounts come with $250,000 in FDIC insurance and a debit card, while savings accounts come with $1 million in FDIC insurance and a highly competitive 0.30% interest rate. Acorns only offers a checking account, and it isn’t free. The advantage to this account, though, is that you can get cashback when you use your Acorns debit card at any of around 350 US retail and restaurant chains. Cashback on your debit card purchases is automatically rolled into your investing account.

Betterment vs Acorns - Betterment Checking

Betterment vs. Acorns: Investing Flexibility

Betterment and Acorns each invest your money in low-cost ETFs that cover a few basic asset classes: large-cap stocks, small-cap stocks, emerging market stocks, and bonds. Notably, Acorns also gives you exposure to the real estate market through real estate investment trusts.

The degree of control you have over your portfolio mix is very different between the two platforms. Acorns requires you to choose between five premade portfolio mixes, which range from “Conservative” to “Aggressive” depending on how heavily they are weighted towards stocks. You can’t customize the mix at all, although you can switch between these preset balances at any time.

Betterment vs Acorns - Acorns Portfolios

Betterment, on the other hand, lets you tightly adjust the balance of asset classes you’re investing in. The algorithm will suggest a portfolio based on your risk tolerance and investing goals, but you can override the suggested asset balance and, for example, add more or less portfolio weight to large-cap stocks. 

Betterment vs. Acorns: Investing Platform

Since most of your investments are managed for you, the investing platforms that Betterment and Acorns use are relatively simple. You can track how much money you have in your account and get a rough estimate of your investment return over time.

🏆 Top Rated Services 🏆

Our team has reviewed over 300 services. These are our favorites:
📈  Best Day Trading Service
Investors Underground
🎯  Best Stock Scanner
Trade Ideas
📉 Best Stock Charts
💰  Best Stock Picking Service
Motley Fool
📱  Best Mobile Broker
📊   Best for Stock Research
Seeking Alpha

That said, there are some important features that each platform offers. With Betterment, you can create individual goals within your account. Each goal can have its own portfolio balance, so you can set up a more aggressive portfolio for funding a home purchase and a more conservative portfolio for saving for retirement. When you transfer money to Betterment, you get to decide which goal you want to put that money towards.

Betterment vs Acorns - Betterment Goals

Acorns’ most unique feature is automatic rollovers. You can link your current debit card or your Acorns debit card to your investing account. Then, anytime you make a purchase, the amount is rounded up to the nearest dollar, and the difference is deposited into your investing account. You can increase the amount you transfer for investments by applying multipliers. Keep in mind that while rollovers can encourage saving, they are probably not enough on their own to keep your retirement contributions on track.

Betterment vs. Acorns: Pricing And Fees

Neither Betterment nor Acorns requires a minimum deposit to open an account. But, the pricing structure is different in important ways.

Betterment charges a flat fee of 0.25% per year based on the amount of money in your investing accounts, regardless of what types of accounts you have. Money in a Betterment checking or savings account is not counted for this annual fee.

Acorns, on the other hand, charges a $1 per month subscription fee for a standard investment account of a $3 per month fee for a standard investment account, retirement account, and checking account. This pricing is cheaper than Betterment if you have at least $5,000 in a standard investment account or $15,000 across standard and retirement accounts.

Betterment vs Acorns - Acorns Pricing

Notably, the ETFs that Betterment invests your money in also tend to have slightly higher fees. The platform’s most expensive ETFs charge around 0.4%, compared to less than 0.2% for the ETFs that Acorns invest in. While this is a small difference, it can add up to a significant amount of money in fees over decades of investing.

Which Service Is Better?

Betterment and Acorns are similar in the assets they invest in, but there are many important differences between them. Acorns is the better choice if you don’t mind the relative lack of investing flexibility and can invest at least $5,000 in your account (or $15,000 if you need a retirement account). If you want the ability to create multiple portfolios for different goals or need a high-interest savings account, Betterment may be the better choice. Ultimately, Betterment’s pricing structure and higher-cost ETFs make it less favorable for those investing for retirement.

Betterment And Acorns Alternatives

The primary competitor to Betterment and Acorns is Wealthfront, one of the largest robo-advising platforms in the US. Wealthfront offers exposure to a wider range of assets than Betterment for the same 0.25% annual fee, although this platform doesn’t offer checking accounts. Wealthfront also matches Acorns’ low-cost ETF fees. Choosing between Wealthfront and Acorns comes down largely to which service is cheaper based on the amount you plan to invest.

Conclusion: Betterment vs. Acorns

Betterment and Acorns can help you invest your money for long-term goals like buying a home or retiring. The two platforms each allow you to set and forget your investments to a large extent. We like the control that Betterment provides over your portfolio balance, but Acorns’ flat fee structure and low-cost ETFs make it the better choice for the majority of long-term investors.

Day Trade Review


Dave has been a part-time day trader and swing trader since 2011 when he first became obsessed with the markets. He focuses primarily on technical setups and will hold positions anywhere from a few minutes to a few days. Over his trading career, Dave has tried numerous day trading products, brokers, services, and courses. He continues to test and review new day trading services to this day.

Leave a Comment