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Acorns vs. Betterment: Which Broker Is Best For You?


Betterment and Acorns are reputable robo-advisors with significantly different approaches to automated investment management. You may transfer predetermined sums of money to your automatic portfolio objectives using Betterment. Acorns endeavors to convince you to invest in automatic portfolios using “roundup” money you never miss.

Since its introduction during the financial crisis of 2008, digital financial advisers have garnered immense appeal. Betterment, founded by Jon Stein in 2008, was one of the first so-called robo-advisors. Jeff and Walter Crittenden established Acorns in August of 2014. Both firms provide wealth management services, but the optimal investment strategy depends primarily on your personal position and risk tolerance.

Suppose you want to invest but don’t know where to start. In that case, robo-advisors such as Acorns and Betterment are an excellent alternative. Robo-advisors simplify investing by determining where to put your money depending on your objectives.

Betterment and Acorns handle costs and features differently. Acorns used Roundups and Found Money to provide a very low investment threshold. Betterment, in contrast, provides tax-loss harvesting and socially acceptable investing portfolios.

Choosing which robo-advisor is best depends on what you’re looking for in a service, and today I’ll compare these two to help you decide.

Acorns Overview

Acorns is designed for individuals who are new to investing and saving. The application is easy, straightforward, and entirely hands-free. In addition to investing spare change, it allows you to save for retirement, create a bank account, and invest for your children.

Founded in 2012, Acorns is the market’s most popular micro-investing app. With almost 10  million investors, Acorns helps millions of people save and invest on autopilot. It also offers inexpensive starting plans and allows everyone to begin investing regardless of financial standing.

Acorns is an investment platform that features investing with “spare coins.” Acorns, which is not a traditional robo-advisor, allows consumers to invest their spare change into fractional shares in ETFs (exchange-traded funds). The Acorns platform’s concept is that investing should be simple, automatic, and accessible to anyone.

Acorns offer a wide selection of account options. Although they do not currently provide a savings account, they offer an online checking account. Additionally, they provide custody accounts. All of their accounts are invested in low-cost exchange-traded funds (ETFs). In addition, Acorns has just introduced a Bitcoin fund, the ProShares Bitcoin Strategy ETF (BITO), for investors interested in adding a bitcoin futures fund to their portfolios.


Betterment Overview

Betterment was created in 2008 and is a top robo-advisor. It has approximately 730,000 investors and oversees $33 billion in assets. And because there is no minimum investment, it is an excellent method to invest a modest amount of money.

Betterment automated investment accounts are goal-oriented. The robot utilizes your risk tolerance and financial objectives to determine the optimal investment portfolio for you. The core digital Betterment account has no minimum balance. Everyone has access to socially responsible portfolios, cryptocurrencies, and financial advisors. In addition, they provide tax-loss harvesting to save money on taxes. Those who seek to outperform the market may choose a Smart Beta portfolio, while retirees may pick an income portfolio.

Betterment just acquired the cryptocurrency investing startup Makara. Betterment will soon provide crypto-based investing. Read also the Betterment VS Axos review.


Acorns vs. Betterment Service & Feature Comparison


As robo-advisors, Betterment and Acorns have a fee structure that differs from traditional trading platforms. Betterment’s fees are calculated as a proportion of your account’s total assets. Betterment Digital’s yearly fee is 0.25 percent of your investment portfolio, including cash and assets, with no minimum balance requirement. Thus, if you invested $10,000 in your portfolio, you would pay $25 annually.

Betterment’s premium service imposes a 0.40 percent yearly fee on all portfolio assets (cash and investments alike) with a minimum balance of $100,000. Thus, assuming you maintained a minimum of $100,000 in your Betterment Premium portfolio, you would pay $400 a year for the service. Additionally, users can open free checking and savings accounts.

Acorns use a flat-rate pricing strategy. It has three service tiers: Acorns Lite, which gives the most basic investing services, costs $1 per month; Acorns Personal, which offers the typical investment package for most users, costs $3 per month; and Acorns Family, which includes investment possibilities for dependents, costs $5 per month. Acorns has no minimum balance requirement.

Service fees also assess unrelated costs for commonplace actions, including deposits, withdrawals, and idleness.

Trade with Acorns

Account Types

You may open a variety of account types with Betterment, including:

The available account types for Acorns are:

Betterment enables joint and trust accounts, whereas Acorns only accepts conservatorship accounts. This may make Betterment the superior option for couples who wish to invest together. However, Acorns is superior for teaching your children how to invest.

Range of Investments

Betterment offers up to twelve distinct asset types. Acorns only provide ETFs from six distinct asset classes. Betterment allows you to invest in ETFs, equities, options, mutual funds, and more. 

Acorns offer a very restricted variety. However, Acorns use Dr. Harry Markowitz’s investing philosophy. He won a Nobel prize for Modern Portfolio Theory. However, most robo-advisors rely on this portfolio theory.

Managed Accounts & Portfolios

Betterment and Acorns invest your funds according to your investment objectives and risk tolerance. This is a fundamental characteristic of both robo-advisors and micro-savings applications, which is why Betterment and Acorns are great for passive investors.

You may invest in several portfolios with Betterment, including:

When you sign up, you’re required to complete an investment questionnaire. Betterment then constructs a portfolio of low-cost ETFs and bonds corresponding to your investment objectives and risk tolerance.

Your Acorns portfolio is comparable to Betterment’s because the app invests in a combination of ETFs and bonds. The application suggests a portfolio based on the user’s age, time horizon, income, objectives, and risk tolerance. As with Betterment, you can pick your own portfolio regardless of the application.

Presently, Acorns offers five primary investment portfolios:

However, Acorns participates in only 12 ETFs across all of its portfolios, making it more restricted than Betterments.

Trade with Betterment

Trading Experience & Mobile Apps

Both of these brands are relatively well-designed for their respective purposes.

Betterments and Acorns are intended to be utilized mainly through their respective applications, and their respective user interfaces reflect this intent. When registering for any program, you are prompted to answer several initial questions. This includes your name, work position, income, birth date, and Social Security number. When evaluating these rival services, this author created a trial account with each one in around four minutes. Both services then lead you straight to investment platforms.

As robo-advisors, you are not given a display of assets and alternatives. Instead, Acorns and Betterment provide essential options for the type of account you choose to establish and provide straightforward navigational tools for managing your account and funds.

Here, the distinction between the two services becomes evident. Betterment provides more readily available solutions for establishing particular financial objectives. While Acorns allows you to go to setting precise goals, it is also made to be forgotten, a sort of set-it-and-forget-it strategy. This aspect of Acorns’ business strategy is reflected in the user experience: you select your financial objectives and then watch your automated contributions grow over time.

Features & Services
Minimum to Open Account $0 $0
401(k) Assistance no yes
Two-Factor Auth. yes yes
Advice Options Automated Automated & Human
Socially Responsible Investing
Online Platform Yes Yes
iPhone App
Android App
Banking yes No
Fractional Shares Yes Yes
Taxable Accounts Yes Yes
401k Plans Yes No
IRA Accounts Yes Yes
Roth IRA Accounts Yes Yes
SEP IRA Accounts Yes Yes
Trust Accounts Yes No
529 Plans No No

Other Features

Herein is the meat and potatoes of these services. Both Betterment and Acorns offer relatively inexpensive robo-advisors. Both are essentially app-based and are pretty intuitive and well-designed. However, each serves a very distinct market. Acorns is meant for novice investors. Its primary feature is its “roundup” automated investment option, which enables daily investing without the need to budget for a monthly portfolio contribution.

Users of Acorns may link the service to their spending accounts, such as their checking and credit card accounts. Acorns automatically round each transaction to the closest dollar. It deducts the surplus from your spending and puts it automatically into your Acorn portfolio. Suppose you purchase a cup of coffee for $3.78. You would spend exactly $4.00, and Acorns would add $0.22 to your portfolio.

This program is ideally suited for novice investors, particularly young individuals with decades to grow money. Investing a few dimes at a time is not a quick method to develop money, but it may accumulate over 30 or 40 years. Obviously, this isn’t the only option to invest with Acorns. As with any other service, you can deposit funds directly. Nevertheless, the automated investing option is undoubtedly Acorns’ most attractive feature.

On the other side, improvement is relatively uncomplicated. It does not offer the automated investment function of Acorns but focuses on building more significant assets. This program offers more outstanding options to target your money, such as establishing specified retirement income objectives and has additional tools for investors seeking to achieve life goals. Additionally, Betterment provides personalized investment advice from the company’s financial consultants. This service is complimentary for Betterment Premium users and costs Betterment Digital members $300.

Trade with Acorns

From that point on, both services provide a comparable experience. Each requires basic personal data such as age, investment objectives, and income. Then, each provides a selection of investment portfolios.

Acorns provided five different portfolios ranging from cautious to aggressive, each comprised of ETFs and automatically rebalanced to match the goal growth and risk management balance of the respective fund.

Betterment provides six investment portfolios comprised of a combination of ETFs and mutual funds. Some of this advisor’s funds are designed to balance growth and risk, while others fulfill specialized goals. For instance, the company provides a socially responsible investment portfolio, which invests in firms suitable for tackling environmental and social challenges, and a tax minimization investment portfolio. By modifying their risk choices, individuals may finally modify the distribution of assets inside their respective portfolios. Read also the Stash vs Betterment review.

Customer Support

These robo-advisors do their best to provide client service, but they are not as robust as others nor give help around the clock.

You may contact Acorns customer service online at or via phone. However, we discovered that email support was slow to respond, taking four days to answer our question.

There was a waiting period for phone assistance, but the individual was friendly and helpful. We might receive a response within 10 minutes during business hours.

Betterment provides customer service by email and phone. There are several phone numbers to contact based on the desired assistance type. We discovered that their general support number had no wait time and swiftly answered our queries.

Automated Investing

Automatic Rebalancing 

Basic and premium Betterment customers have access to automatic rebalancing. The service is free for every account type. Daily rebalancing ensures that your portfolio never deviates significantly from your investing plan and risk tolerance.

Additionally, Acorns offers automated rebalancing for all account types. Investors can choose from five portfolios, and Acorns reinvests dividend payments regularly to maintain the integrity of investor portfolios. It lacks the sophistication of Betterment and other robo-advisors, though.

Trade with Betterment

Human Advisors

Premium Betterment users get access to real-live advisors. You can reach a human advisor by phone or email.

There are no accessible advisers for Acorns. Nonetheless, the service is intended to be administered solely by AI. Additionally, there are no plans to introduce human advisers to Acorns clients.

Expense Ratios

Acorns’ expenditure rates are minimal, ranging from 0.05 to 0.15 percent. This is essential for ensuring that net returns grow or remain positive during low-interest rates.

Betterment also provides low expense ratios, albeit not as low as Acorns. Betterment’s expenditure ratios will most likely range between 0.09 and 0.17 percent.

Socially Responsible Investing

Acorns do not provide any socially responsible alternatives. You cannot choose investments manually or manage your portfolio independently. While the “Change Your Potential” tool offers considerable versatility, there are no socially responsible options.

Betterment allows investors to select goals and interests throughout the setup process. You can also select an SRI portfolio depending on your ethical investment objectives. You may also decide which sectors and businesses you do not wish to support.

My Preference: Acorns Wins Over Betterment

Acorns is a hands-free and straightforward method to invest and earn money with spare change. It is superior to a bank savings account that just rounds up your change and deposits it into an account.

Using Acorns, you can earn real money from your spare change. However, it is not optimal for retirement or substantial profits.

Betterment is the greatest robo-advisor if you wish to earn money legitimately. Betterment provides investors with additional features, account kinds, asset classes, and an artificial intelligence retirement planning tool than Acorns. Read also the Betterment vs. TD Ameritrade review.

Acorns vs. Betterment: The Bottom Line

It is essential to understand that Acorns is not attempting to compete with Betterment. Acorns is reasonably effective at achieving its stated mission to assist investors in investing their spare change, which will eventually grow into more spectacular investment portfolios.

Acorns is a fantastic alternative if you’re looking for an entry-level investment platform. It is also an excellent method to set up a low-cost automatic investing account for your children. Realize that by depositing additional funds into your account, your capital will increase more rapidly. Investing in tiny adjustments implies accumulating considerable riches will take a long time.

Betterment, on the other hand, is the best option if you want a full-featured robo-advisor. Betterment provides more tools, portfolios, and functions. The website also provides clients with Socially Responsible Investing and Smart Beta portfolios, which Acorns does not provide.


Is Acorns or Betterment better?

Betterment provides a broader range of investment alternatives and resources, including human, financial counselors, tax-loss harvesting, and many investment techniques. Acorns is a wonderful place to start investing if you don't have a lot of money but want to make your regular purchases count. Acorns has a "roundup" function that rounds your purchases to the closest dollar and invests the spare change.

Is Acorns a decent place to invest?

Acorns provides a basic or sustainably managed portfolio with three degrees of risk tolerance. Acorns, which is not a traditional robo-advisor, allows consumers to invest their spare change into fractional shares in ETFs (exchange-traded funds). The Acorns platform's concept is that investing should be simple, automatic, and accessible to anyone.

Is Acorns suitable for individual retirement accounts (IRA)?

Robo-advisors aim to facilitate their clients' retirement through hands-free automated investment. Still, certain Betterment products simplify and facilitate comprehension.
Regarding Acorns vs. Betterment for IRAs, Betterment may help you accomplish your retirement objectives more quickly. However, if you have a small amount to save and need uncomplicated investment, Acorns handles everything automatically.
Acorns is designed to make it simple for young people to automatically save money. After linking your credit and debit cards, Acorns automatically deposits your spare change into investing accounts whenever you make a transaction.


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