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Invest Smart: Betterment VS Acorns (2019) Review and Comparison

Both Acorns and Betterment both offer strong dependable platforms, strategies, and trading instruments. Read on to find what the best tool for investing is.

Invest Smart Betterment VS Acorns Review and Comparison
Both Acorns and Betterment both offer strong dependable platforms, strategies, and trading instruments. Read on to find what the best tool for investing is.

Investment is not the simplest topic to talk about, especially in our consumer-oriented world. More often than not, we want to spend, not save. We don’t want to invest either, because we don’t know how to. We fear what we have may not even cover the fees of hiring a financial advisor. These statements are all true, but what should we do then? Should we put our money in a 401K and forget about it until we’re old? What about the economy? What about Trump?

We all understand why we should have some money invested for a rainy day. We all know that we should have a plan in place for financial security. However, the expertise we would need to navigate the broader financial industry successfully puts many of us off. Naturally, there is someone to help us. As usual, it is our job to tell you where you’ll get the best possible deal.

Invest Smart Betterment VS Acorns Review and Comparison
Invest Smart


Portfolio management

As a new client interacting with Betterment the first question you’ll ask them will have to do with how they manage portfolios. The core activity of any investment company is to provide ways for you to profit and reduce your losses by diversifying your investment portfolio. Betterment have a diversified portfolio scheme that promises you high profits as a client.

Betterment portfolio

This portfolio strategy is the primary investment product that Betterment offers you. The instruments  you get to trade in this category are good old stocks and bonds. Let’s tackle stocks first.


Stocks are more volatile than bonds and hence they carry more risk. They are quite an intelligent investment option, especially if you’re comfortable with short-term investments. They are also a reliable option if you want to participate in the daily movements of your investment options actively. Betterment classifies stocks as either Emerging Market or Developed Market. Betterment ranks U.S stocks on their own since they cost less to invest in.

Betterment further divides U.S stocks according to their Market Capitalization. This division applies only to U.S stocks because international stocks would otherwise be too expensive to maintain. The four divisions of U.S stocks are as below:

  • U.S total stock market:
    This division covers the entire collection of stocks.
  • Large-Cap Value stocks:
    These stocks rank in the top 70% of Market Capitalization.
  • Mid-Cap stocks:
    These stocks are for companies with capitalization from $1 billion to $8 billion.
  • Small-Cap stocks:
    These are stocks of companies that tend to grow faster and so typically represent the more volatile part of the stock market.

Betterment classifies International stocks as either Developed Market stocks or Emerging Market stocks. Some of the economies considered as emerging markets include China, Brazil, South Africa, and Thailand. Developed Markets are the US, UK, Canada, Singapore, Japan, Hong Kong, Australia, New Zealand, and the majority of Western Europe. In terms of return and risk, the profiles of these countries are quite similar to that of US stocks.


Governments typically issue bonds, but the markets also have corporate and agency bonds. Just like stocks, US bonds classify separately in Betterment. Betterment offers you a variety of bonds from which to choose. International bonds are either from Developed Markets or Emerging Markets. You can access High-Quality bonds, Municipal bonds, short-term treasury bonds, and several other instruments in the U.S bonds portfolio.

Socially Responsible Investing

Socially Responsible Investing is another in-house strategy. The only difference between this and the core strategy is that you will invest your money in companies meeting specified criteria in social, environmental, and governance matters. In this strategy, you get the benefit of your investment having a social impact, but perhaps the most significant benefit you enjoy is diversification.

Invest Smart Betterment VS Acorns Review and Comparison
Betterment app

Goldman Sachs Smart Beta Portfolio

Betterment sources plans from Goldman Sachs’ Asset Management Desk that shares some key characteristics with the Betterment Core Strategy. Using it, however, adds an element of risk to your portfolio.

Portfolio strategies are either active or passive. Using a Passive strategy means that you tend to ‘wait’ for the market to move then you respond accordingly. Active strategies such as the ones used by hedge funds rely on you buying up identified securities to cause the market to respond. The Smart Beta Fund strategy lies somewhere between passive and active strategies. It goes beyond market capitalization to other factors that might affect your returns. At the same time, it seeks to ensure tax efficiency and low costs, just like traditional strategies.

BlackRock Target Income

This strategy is ideal for a bond-based portfolio. You might want to consider this plan if you’re averse to the volatility of the stock market.  There are four levels of risk, each with different expected income levels. BlackRock devised this bond-based strategy. This could be a decent addition to your portfolio.

Flexible Portfolio

Do you have any ideas of your own on investment? Do you like a particular strategy but want to tweak a few things? Then a flexible portfolio is what you should take. The flexible approach works well for clients who have some knowledge of investment options but still want to enjoy the advice, and other benefits from Betterment.

Betterment Everyday

In addition to investment products, Betterment also provides a Saving and Checking platform. Betterment has dubbed their current savings product as the Betterment Everyday Savings account. This account distributes your money is across five banks. These banks are Barclays, Citi bank, Georgia Banking Company, Seaside National Bank and Trust, and Valley National Bank. You manage your funds through the Betterment app.

Having your money in these banks means you get FDIC insurance. This insurance is as much security as anyone could ever need. You can rest assured that you’ll get your money come what may. Saving your money with Betterment guarantees you an annual percentage yield. Your money accrues this interest yearly. This percentage rate changes frequently, but as of this writing, it is 2.69%. Whenever you log in to the savings and checking page on their website, you get access to the current rate.

This savings account incurs no fees and doesn’t require you to keep a minimum balance. However, the least you can deposit is $10. This platform integrates with the investment platform, meaning you can access all your financial information on the same application.

Invest Smart Betterment VS Acorns Review and Comparison
Betterment app screen


As we speak, the checking platform is not yet operational. Betterment is still lobbying for their clients to sign up. Signing up guarantees you a 2.38% annual percentage yield on your savings. The checking account will have no monthly fees, no maintenance fees, and Betterment will reimburse you all ATM withdrawal fees. Also, you will not be required to maintain a minimum balance. If you are interested in joining the Checking platform, the Betterment Everyday page has a form requesting you to provide your email.


The third arm of Betterment’s financial management deals with retirement benefits. Here they have several solutions on offer which are worth checking out.

Projection Tool

This tool projects how much you’ll be spending during your retirement. You can then set up automatic withdrawals directly into your account. In addition to this projection tool, there is also another tool that calculates how ready you are for retirement.


Individual Retirement Accounts (IRAs) are standard accounts made available to retirees. When you open one with Betterment, you are eligible to all products they have to offer. There are two types of IRAs you can choose from. You can either take a Traditional and Roth IRA account. In addition to these accounts, Betterment also offers external accounts (401(k)and 403(b)), and taxable accounts. Setting up a retirement account is free. Once it is set up and funded the account attracts a fee of 0.25% of your deposit yearly.

Invest Smart Betterment VS Acorns Review and Comparison
Betterment performance screen


When we consider both companies and their approach to investment, we conclude that Acorns and Betterment cater to different segments of society.  We will demonstrate this and other issues clearly, below.


Acorns approaches portfolio creation similarly to all other financial management companies. You explain your financial situation and your targets to them, and then they come up with a portfolio for you. They have pre-defined portfolios that they have named differently.

  • Conservative Portfolio:
    It is a mixture of short-term government bonds (40%), ultra-short-term corporate bonds (40%), and ultra-short-term government bonds (20%).
  • Moderately Conservative Portfolio:
    This portfolio is a mixture of large-company stocks (24%), small company stocks (4%), real estate stocks (4%), government bonds (30%), corporate bonds (30%), and international large-company stocks (8%).
  • Moderate Portfolio:
    This portfolio includes Large company stocks (29%), small company stocks (10%), emerging market stocks (3%), real estate stocks (6%), government bonds (20%), corporate bonds (20%), and international large-company stocks (12%).
  • Moderately Aggressive:
    In this portfolio, emphasis switches from bonds to large company stocks, both international (16%) and local (38%). You can find the exact percentages for the rest of the ETFs in the Acorns website.
  • Aggressive portfolio:
    This portfolio is made up entirely of stocks. The highest percentage goes to local large-company stocks (40%).

Acorns sets up these portfolios to cater to the whole range of investment needs. Acorns developed these products in collaboration with Nobel Prize-winning economist Dr. Henry Markowitz.

Invest Smart Betterment VS Acorns Review and Comparison
Investment Portfolios

Acorns Core

The strategies we have listed above are part of the primary product offered by Acorns. With the Acorns Core, you get automated investments.  You can set your account up in such a way that change from your purchases is automatically invested. All the ETFs offered at Acorns come from well-known investment firms such as BlackRock.

Checking Accounts

Their checking account is known as Acorns Spend. The debit card you get with Acorns Spend comes with the latest technologies. Alongside other cutting-edge features, it is laser-engraved and has a colored PVC core with a tungsten metal inlay. You can automate the card in such a way that any balance from general spending goes into your portfolio.

The card also comes with free bank-to-bank transfers, no overdraft fees, no minimum balance, and you get refunds for all ATM fees.

FDIC protection

The FDIC insure your checking account up to $250000, in addition to an all-digital card lock, and protection from fraud.

Acorns Found Money

Found Money is a collaboration between Acorns and several partners including Airbnb, Barnes and Noble, Chevron, Dollar Shave Club, Expedia, Groupon, DirecTV, and Macy’s. These firms automatically invest in your Acorns Core account. They target all that spare change that you wouldn’t typically think much about.

For you to access this feature, you must first be in the $3 per month investment package. Then you must link your credit or debit card to your Acorns Core account.

You can find information about earnings from shopping at any of the above brands in the Acorns App. You should check out the Found Money page on the Acorns app.


Acorns have investment packages and advice packages. Investment packages don’t have fixed charges. You pay a percentage of your total fund every year. Advice packages have fixed prices as we’ll discuss in a short while.

Digital plan

This plan is the cheapest they offer. Whatever the amount of money you have in your fund, they charge a fee of 0.25% per year. The Digital plan has $0 as a minimum balance. Its benefits are listed below.

  • Contact with customer support team available all week.
  • Access to a choice of diversified portfolios.
  • Tax saving strategies for your portfolio.
  • Reallocation of funds to maintain set targets when markets shift
  • Personal financial advice

Premium plan

The premium plan has a yearly fee of 0.40% of your total portfolio. It has a minimum balance of $100,000 and comes with all the benefits of the digital plan. The thing that sets this plan apart is the access it provides to financial advisors. You get unlimited interaction with these professionals to discuss all your financial matters.

Invest Smart Betterment VS Acorns Review and Comparison
Acorns app screen

Advice Packages

People who aren’t on the Premium Plan can still interact with financial experts. Unfortunately, they have to pay for it. There are five advice packages based on the situation in which you need advice. Each package includes one call, an action plan by the expert you’re talking to, and other exclusive content.

Before you get to talk to an expert, you first need to identify the area you require advice in. Then you set up your call and prepare for it. Customer Service will tell you how to prepare yourself when you’re scheduling your call. You can find more information on the five advice packages below:

Getting Started Package

Costs $199 and is targeted at Betterment newbies. You get a 45-minute call with a certified financial planner. This planner will answer any questions you have about setting up your account and what sort of portfolio to go for.

Financial Check-up Package

This package aims for clients who have been investing for a while and need to review their financial status. It costs $299 and consists of one 60-minute call with an expert.

College Planning Package

You get to review your family’s higher education plans with an expert. Also costs $299 for a 60-minute session.

Marriage Planning Package

It also costs $299 and consists of a conference call with your partner and an expert for sixty minutes. You get professional guidance on your finances in marriage.

Retirement Package

A package that doesn’t require much explaining. It still costs $299, and you still get a 60-minute call with an expert.

Invest Smart Betterment VS Acorns Review and Comparison
Acorns Shop Save and Invest

Acorns 1-2-3 Model

Unlike Betterment, Acorns have fixed fees for their packages. They achieve this through their 1-2-3 model.

$1 Package

You pay a standard $1 every month, and for this, you get Acorns Core. Acorns core is the ‘core’ product from Acorns. It provides you with all the micro-investment benefits we discussed. Additionally, you get:

  • Automated investing
  • Found Money
  • Subscription to Grow Magazine. This is a magazine providing financial information and news.

$2 Package

The fee is payable monthly. In addition to Acorns Core and all the other benefits of the $1 package. You also get Acorns Later.

$3 Package

Having the $3 per month package allows you to access Acorns Spend. These prices remain constant until an investor gets to the $1 million mark. Also, Acorns Core at $1 package is free for college students.

Betterment VS Acorns

For us, the most essential comparison metric has to be investment methodology. It is of no use to have an awesome interface, excellent customer care, and not offer any diversity in investment. To this end, Betterment does a much better job.

Diversity is very vital in investments and we cannot emphasize this statement enough. Betterment have a wider array of portfolios, including portfolios that were not developed in-house. Having such a wide array of options means you get to spread your risks out comfortably.

Both Acorns and Betterment both offer strong dependable platforms, strategies and trading instruments. Acorns claim that they collaboratively developed their strategies with Dr. Henry Markowitz while Betterment has publicly approved EFTs. Betterment also uses investment strategies acquired from leading firms such as Goldman Sachs, and BlackRock.

Betterment’s pricing strategy is appealing but doesn’t beat Acorns. Acorns’ fees are extremely low and are fixed. With Betterment, you don’t know how much you’ll pay. Acorns, additionally, offer their cheapest package free to college students.

Invest Smart Betterment VS Acorns Review and Comparison
Both Acorns and Betterment both offer strong dependable platforms

Lastly, it is important to understand the targets of these firms. Betterment targets individuals who already have established lifestyles and are looking to grow more wealth. Acorns is more focused on micro-investments. Their fees and their products say it all really. $1 or $2 per month is affordable enough if you’re just starting out in investing. Add to this the Acorns spend program which seeks to utilize spare change for investments, and you have more proof of the types of clients they wish to attract.

Thank you for reading! Want to compare more options for your investing possibilities? Be sure to also check out “Easy Investing with Webull & Robinhood (Review & Comparison)” for more. Be sure to also check out our other content at BestandVS.

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