Betterment is a robo-advisor, human financial advisor, and banking service all rolled into one, making it a solid choice for investors looking for an easy and automated way to save and invest. Whether you’re planning for retirement, want to earn extra income on your cash, or need expert financial guidance, Betterment has a lot to offer.
In this Betterment Review 2025, we’ll explore:
✅ How Betterment works
✅ Investment and savings options
✅ Fees and pricing
✅ Pros and cons
✅ Whether Betterment is worth it for you
Let’s dive in!
What is Betterment and How Does It Work?
Betterment is a goal-based investing platform that makes it easy for both beginner and experienced investors to grow their wealth. When you open an account, Betterment asks you a series of questions to determine your risk tolerance and financial goals.
Based on your responses, Betterment assigns you a portfolio with a mix of stocks and bonds, ensuring diversification while keeping investments aligned with your objectives.
Types of Accounts You Can Open on Betterment
Betterment supports a variety of investment and savings accounts, including:
- Retirement accounts: Roth IRA, Traditional IRA, SEP IRA
- Taxable investment accounts: General investing, Trust accounts
- Savings accounts: Cash Reserve for high-yield savings
- Crypto investing: Automated cryptocurrency portfolios
- House down payment savings
- Education savings (non-529)
Once your account is set up and linked to your bank, Betterment takes care of everything, from investing your money in low-cost ETFs to automatically rebalancing your portfolio as needed.
Betterment Investment Strategy: Where Does Your Money Go?
Betterment follows a passive investing strategy using a diversified portfolio of exchange-traded funds (ETFs). These ETFs include:
- US Stocks (Large, Mid, Small Cap)
- International Stocks
- US Bonds
- International Bonds
- Treasury-Inflation Protected Securities (TIPS)
- Municipal Bonds
For crypto investors, Betterment offers a diversified cryptocurrency portfolio, allowing users to invest in assets like Bitcoin (BTC) and Ethereum (ETH) without directly managing them.
Betterment Fees and Pricing: What Will You Pay?
Betterment offers two pricing plans:
1. Digital Plan – $4/month or 0.25% AUM
- Flat $4 per month for accounts under $20,000
- 0.25% annual fee for accounts over $20,000
- Fee waived for those depositing $250+/month
Example: If you invest $10,000, your annual fee is $48. If you have $20,000, you’ll only pay $50 per year.
2. Premium Plan – 0.40% AUM (Requires $100,000 Minimum)
- Includes unlimited access to CFPs (Certified Financial Planners)
- In-depth financial advice for 401(k)s, real estate, retirement, and more
- All features from the Digital Plan
Which Plan is Best?
- If you just want automated investing, the Digital Plan is a great low-cost option.
- If you want personalized financial advice, the Premium Plan might be worth it.
Betterment Financial Advice: Can You Talk to a Human?
Even if you’re on the Digital Plan, you can purchase one-time financial advice packages:
- Getting Started Package ($299) – Guidance on account setup
- Financial Checkup Package ($399) – Portfolio review and strategy
- College Planning Package ($399) – Education savings planning
- Marriage Planning Package ($399) – Combining finances as a couple
- Retirement Planning Package ($399) – Ensure you’re on track for retirement
Each package includes a one-on-one session with a CFP® professional.
Betterment Banking Services: Checking & Cash Reserve
Betterment Checking
- No monthly fees
- Free ATM withdrawals (worldwide)
- No overdraft fees
- FDIC-insured up to $250,000
Betterment Cash Reserve (High-Yield Savings)
- Earn up to 5.5% APY (rate subject to change)
- FDIC insurance up to $1 million
- No account fees
- Unlimited withdrawals
Betterment Cash Reserve is a great place to park your savings, especially if you want higher interest rates than traditional banks.
Betterment vs. Competitors: How Does It Compare?
| Feature | Betterment | Wealthfront | Vanguard Digital Advisor |
|---|---|---|---|
| Minimum Investment | $10 | $500 | $3,000 |
| Annual Fee | 0.25% (Digital) | 0.25% | 0.20% |
| Financial Advisors | Available (Premium Plan) | No | Limited |
| Checking & Savings | Yes | No | No |
| Crypto Investing | Yes | No | No |
If you’re looking for a simple, beginner-friendly robo-advisor, Betterment is a top choice.
Pros & Cons of Betterment
✅ Pros
✔️ Low minimum investment ($10 to start)
✔️ Automated investing with tax-efficient strategies
✔️ High-yield cash savings (5.5% APY)
✔️ Access to human financial advisors (Premium Plan & one-time packages)
✔️ No transaction fees or commissions
❌ Cons
❌ $4/month fee for small accounts can be high for beginner investors
❌ Premium Plan requires $100K minimum
❌ Limited customization of ETF portfolios
Is Betterment Worth It in 2025?
Betterment is an excellent robo-advisor for anyone who wants a hands-off approach to investing with low fees and automated features.
✔️ If you’re a beginner investor, Betterment makes it incredibly easy to get started.
✔️ If you’re saving for retirement or long-term goals, the platform’s goal-based investing can help you stay on track.
✔️ If you want a high-yield savings account, Betterment’s Cash Reserve (5.5% APY) is a great option.
Who Should Use Betterment?
✅ Beginner investors looking for automated, stress-free investing
✅ Long-term savers wanting retirement or wealth-building solutions
✅ Those seeking professional financial advice at an affordable rate
Who Should Skip Betterment?
❌ Active traders who want to pick individual stocks
❌ Those who prefer DIY investing with full control
❌ Investors who want a fee-free robo-advisor (Betterment charges a monthly fee for small balances)
Final Verdict: Is Betterment the Best Robo-Advisor in 2025?
Yes! If you want a hands-off, automated investing experience, Betterment is one of the best robo-advisors in 2025.
