Acorns Vs. Betterment (The Key Differences Explained)

acorns vs betterment

There are many robo-advisors on the market, and today we’re comparing two of arguably the most popular and well-known ones – Acorns and Betterment. How similar are they, what are the differences, is one better than the other? Find out if you continue reading Acorns vs Betterment.

But first, here’s our short verdict:

Both Acorns and Betterment have a low barrier for entry and offer a great way to start investing on autopilot with managed portfolios. While Betterment is goal-oriented, Acorns offers a clever way to build up your portfolio by using your spare change. 

acorns vs betterment


  • Robo-advisor 
  • No minimum balance
  • Tips and tricks
  • Portfolios created by experts 
  • Free checking account and debit card
  • 2 account types for $3 or $5 per month

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Acorns is a California-based fintech and financial services company founded in 2012 that launched its Acorns app in 2014. 

Amazingly, the company was founded by a father and son duo Walter Wemple Cruttenden III and Jeffrey James Cruttenden and is supported by many heavy-hitting investors, advisors, and board members.

The company has more than 9 million past and present users that use the Acorns app to save, invest, bank, and learn about saving and investing.   


  • Robo-advisor
  • No minimum balance
  • Free – 0.45% annual fee
  • Free checking account and debit card
  • Financial goal-setting
  • Retirement planning tools

Betterment is also an American financial services company that provides robo-advising, a free checking account, and a Visa debit card. The company is based in New York, and the CEO is Sarah Levy. 

Its main service is goal-based investing that’s automated and is suitable for hands-off investing. Apart from robo-investing, the company also added human advisors for their Premium customers. 

The company was established in 2008 by Jon Stein and Eli Broverman and has made a long way by acquiring more than 650,000 customers and having a total of $31 billion under management. 


You’ll hear this term multiple times in this review, so let’s first explain what it means. Robo-advisors are basically, automated digital platforms that are driven by algorithms and give financial planning services with almost no human intervention. 

As with any algorithm, they need to collect information that they use to adjust and offer advice on investing. That’s why there’s always a questionnaire when you apply for a robo-adviser service like Acorns or Betterment. 

Based on the answers you give when applying, that consider your financial status and goals, the algorithm can recommend a managed portfolio that you can accept, decline, or modify. 

One of our today’s contenders, Betterment, was the first robo-adviser and was founded in 2008.  



  • Monthly fee of $3 or $5
  • No transaction or commission fees
  • Free checking account and card
  • $50 per ETF to transfer investments out
  • No account minimum

Acorns has flat fees for their two account types that are $3 and $5 per month for Personal and Family plans, respectively. $3 per month grants you access to their free checking account and card with no ATM withdrawal fees and no low balance or overdraft fees. You also get access to the main dish – their investment and retirement accounts. 

For $5 per month, you also get checking, investment, and retirement accounts plus access to an investment account for multiple kids. 

Although $3 and $5 sounds like it’s not much, it’s unusual for robo-advisors to charge a flat fee. When you compare the $5 fee as an annual percentage of assets under management, a model Betterment has, it translates to a much much higher fee for investors with small balances. 

$60 a year ($5 a month) is a huge 60% fee if you only have $100 dollars in your account if expressed as an annual percentage.   

To get your monthly fee to be less than 1% of your saved-up amount, you should initially invest $300+ and promptly grow it to at least $1,500 with round-ups. If you think to start with a smaller amount than that, you’d better save up money in your piggy bank and then put the lump sum in. 

Still, I don’t think Acorns fees are going to stop anyone from using their useful investing platform. 


  • 0.25% – 0.40% annual  account management fee
  • No minimum balance for 0.25% fee
  • $100k minimum balance for 0.40% fee
  • Free checking account and card
  • No transaction or commission fees
  • No transfer fees

Betterment has some of the best fees in the robo-advisor business. For instance, their checking account with free worldwide ATM withdrawals and a Visa debit card is comparable to many other digital banks and is completely free.  

Then there’s the Digital investing account that has no minimum balance and a 0.25% annual fee (~ $2.50/year for every $1,000). This management fee is really cheap compared to some other robo-advisors and gets you all the Betterment features except access to free professional human advice. 

If you have more than $100k to invest then the annual fee will be 0.40% or around $400/year for every $100,000. The Premium investing account gives you unlimited access to CFP professionals via email or phone on top of all the Digital investing and checking account features. 

Who should use Acorns? 


Acorns is for those who struggle to save and want to do it passively and without putting any consideration into it. The spare change feature can grow your Acorns balance very quickly and if you continue doing it and let the money sit there, your acorns could grow into a big tree. 

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There are many digital banks that offer a comparable, round-up spare change feature and if you already have a digital bank account, simply turn on this feature and start saving today.  

Acorns offers much more than your typical digital bank, of course. It lets you invest in your future retirement with IRAs, open an investment account for kids, and even invest in sustainable businesses with a Sustainable ESG Portfolio. 

Who should use Betterment?

Betterment is a great fit for goal-oriented investors and therefore should especially appeal to retirement investors. It’s certainly one of the leaders in the robo-advisor segment and a pioneer. 

No account minimum means that the bar for investors is low and so are its management fees which are better than Acorn’s, at least for small investors.  

If you want diverse portfolios to choose from, Betterment has got you covered with different levels of risk tolerance, socially responsible portfolios, and even smart beta portfolios that attempt higher-than-average returns.

Pros and cons


  • Automated investing

  • Easy to start 

  • Round-up change feature

  • Free trial

  • Sustainable Portfolios
  • High fee for low balances

  • No tax-loss harvesting

  • High account transfer fees

  • No 529 plans
  • Betterment

  • Low management fees

  • Tax-loss harvesting

  • Simple asset allocation

  • Free checking account

  • Nice mobile app

  • Sustainable portfolios
  • Expensive human advice

  • No 529 plans

  • No round-up feature
  • How are Acorns and Betterment the same?

    Acorns and Betterment are both robo-advisors and therefore have some traits that are the same. For instance, both offer a free checking account and debit card, both charge a management fee, diversified portfolios including sustainable ones and don’t require a minimum balance to start investing.  

    They both also don’t offer a free human advisor option, although with Betterment you can buy an advice package from $199 regardless if you’re a Betterment customer.

    How are Acorns and Betterment different?

    Acorns offer a round-up spare change feature that Betterment doesn’t yet have. It also has a swanky metal debit card that digital banks usually charge for. 

    What Acorns lacks is a tax strategy, something that Betterment does better with tax-loss harvesting, tax-coordinated portfolio tool, tax impact preview tool, and the charitable giving tool.

    How to open an Acorns account? 


    If you’re a US resident over 18 years old and have an SSN number, you can open an Acorns account. You can register online or download the Acorns app. 

    You’ll need to enter some necessary information about you and also link your bank account to fund the account and use the round-up spare change feature. 

    Acorn will recommend a portfolio to you based on the information that you provide. You’ll have to tell them about your occupation and earnings, as well as your financial goals. 

    How to open a Betterment account?


    If you’re at least 18, have a permanent US address, a US checking account, and SSN or ITIN, you’re eligible to open a Betterment account. 

    To open a Betterment account, tap ‘Get started’, on the Betterment website, or download their app. Enter your email, name, address, and answer a few questions so they can tailor portfolios for you. 

    You’ll also need to submit some documents and verify your identity – standard procedure when opening an account online with financial companies or digital banks, for example. 



    • Personal ($3 per month)
    • Family ($5 per month)

    As I already mentioned, Acorns has two account types that are both paid. The Personal account costs $3 per month and gives you a checking account and a metal debit card plus investment and retirement accounts. 

    The $5 Family account offers checking, investment, and retirement account plus an investment account for multiple kids and other exclusive offers and content. 



    Betterment offers three accounts:

    • Checking (free)
    • Digital Investing (0.25% annual fee)
    • Premium Investing (0.40% annual fee)

    Similar to Acorns, the Betterment checking account comes with free ATM withdrawals, free transactions, no overdraft fees, and cashback rewards. 

    The Digital investing account is the most popular option and comes with low-cost portfolios, joint accounts, trusts, and IRAs, as well as tax-loss harvesting and asset location to save on taxes. 

    The Premium investing account has a minimum balance of $100,000 and a 0.40% annual fee. It incorporates all the features of the Digital account plus unlimited access to professional advisors. 

    Number of users 

    Acorns has more than 8 million customers and $3 billion in assets under management, while Betterment has “only” 650,000 customers and has a total of $31 billion under asset management. 




    There are two types of portfolios at Acorns – Core and Sustainable, and they range from conservative to aggressive and cover only five to seven asset classes. 

    When you sign up, the app will take your personal information into account and recommend one of their portfolios. You can then accept the recommendation or choose another portfolio from the list. 

    There’s no option to make a custom one yourself or to modify an existing recommendation as Acorns is an automated tool that’s inherently passive in nature. Still, portfolios are well diversified and should satisfy the majority of investors.  



    Betterment has three types of portfolio options that include two general investment portfolios, three socially responsible portfolios, and two lower-risk cash or bond options. 

    For those that want more control over the portfolio, there’s a flexible portfolio tool that gives experienced investors the ability to adjust the individual asset class weights to deviate from their recommended portfolios.

    Customer reviews



    Acorns has a 2.6-star rating out of 5 on Trustpilot from only 56 reviews, with 29% of reviewers giving it an excellent mark and 57% a bad one. 

    With a 2.6 score, Acorns is placed worse than Wealthfront (3.4), eToro (3.6), and Betterment (3.4), but better than Stash (2.4) and Robinhood (1.1).

    Some dissatisfied customers notice not making the promo $1,000 for referring 5 friends, others had their accounts blocked, locked, or even closed, and also being charged with fees even after they closed the account.



    Betterment has a 3.4-star rating out of 5 on Trustpilot from only 3 reviews, with 33% of reviewers giving it an excellent mark and 33% a bad one. 

    With a 3.4 score, Betterment is placed worse than eToro (3.6) and Trading 212 (4.3) but better than Acorns (2.6), Stash (2.4), and Robinhood (1.1) and the same as Wealthfront (3.4).

    As you can see, Betterment doesn’t have many reviews on Trustpilot so this score doesn’t have much merit when comparing to other investing platforms. 

    Who owns Acorns? 


    Acorns is a publicly traded company that went public in May 2021, when it merged with Pioneer Merger Corp., a special purpose acquisition company (SPAC). For that reason, the Acorns ticker symbol is PACX for the time being. 

    After the deal is completed, the company will compete as Acorns Holdings, Inc., and will be a publicly traded company on the Nasdaq under the ticker OAKS.

    Who owns Betterment?


    Betterment was founded in 2008 by Eli Broverman and Jon Stein. Its headquarters are in New York.

    The company raised more than $275 million from 8 rounds of funding. The last round brought in $70 million.

    Betterment has 17 investors, including Kinnevik AB, Citi Ventures, Globespan Capital Partners, Menlo Ventures, Bessemer Venture Partners, Francisco Partners, and others.


    There’s nothing much to say here as both platforms have the latest data security and fraud protection that they use behind the scenes to keep you, and your investments safe from fraud and cyber criminals such as hackers and scammers. 

    Of course, you also play a part in keeping your account secure by choosing a strong password and utilizing the two-factor authentication to log into your accounts. 

    You should never share your account login information with others and nerve lend your phone to people you don’t know personally as it only takes a couple of seconds to transfer money off the account. 

    Acorns and Betterment alternatives

    SoFi Automated Investing 


    SoFi’s robo-advisor has an extensive range of low-cost investments and FREE management. It also gives an unlimited access to financial planners and even career advisors. 



    Wealthfront is an excellent choice for beginners and veteran investors alike. It has a wide range of diversified portfolios and a 529 college savings plan management. It’s similar to Betterment in terms that It’s one of the lowest-cost robo-advisers on the market with a 0.25% management fee. 

    Schwab Intelligent Portfolios


    Schwab has no management fees and is unique in that regard. To access it, you’ll have to invest at least $5,000 which may be too high for beginner investors. Although there aren’t management fees, Schwab isn’t a charity and will charge you other kinds of fees.  

    The bottom line

    So, which one should you choose then? Acorns is, at first glance, better for people investing small amounts of money, but their fees are way too high for small investors. Still, it’s a great way to invest without ever thinking about it as your spare change gets siphoned into your Acorns account. 

    Betterment, on the other hand, has small fees overall and is an excellent choice for both big and small investors and allows you to set up multiple accounts for different goals and gives you a choice of IRAs. 

    It also offers tax-efficient investing, something that Acorns is clearly missing. Plus, you can get human advice that’s arguably cheaper than elsewhere. 

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