Betterment
Betterment charges a 0.25% annual management fee (or $5/month on smaller balances) with no account minimum, and builds and rebalances a diversified portfolio for you. For hands-off investors who want automation without a minimum, it's a top pick — pricing verified on Betterment's own page.
Is the Betterment worth it?
Betterment is the robo-advisor we recommend most for people starting from zero. It charges a 0.25% annual management fee on its digital plan, with no account minimum, and handles allocation, rebalancing, and tax-loss harvesting automatically.
The pricing has one wrinkle worth understanding: the base price is $5/month, and you switch to the 0.25% annual fee once you set up recurring deposits of $200+ a month or reach a $24,000 balance. On very small balances, the flat $5 can work out to more than 0.25%, so the recurring-deposit path matters.
As an investing account, it is not FDIC-insured — it carries SIPC protection for securities, and the management fee sits on top of the underlying funds’ own expenses. But for genuinely hands-off, no-minimum automated investing, Betterment is a standout. Fees can change; this is not financial advice. Confirm current pricing before investing.
How does a robo-advisor work?
A robo-advisor builds and automatically rebalances a diversified portfolio of low-cost funds based on your goals and risk tolerance. You pay an annual management fee, quoted as a percentage of your balance. Investments are not FDIC-insured and can lose value.
What are the pros and cons of the Betterment?
The Betterment stands out for 0.25% annual management fee on the digital plan, though smaller balances pay a $5/month base price (can exceed 0.25%).
- 0.25% annual management fee on the digital plan
- No account minimum to start
- Automatic rebalancing and tax-loss harvesting
- Smaller balances pay a $5/month base price (can exceed 0.25%)
- Management fee is on top of underlying fund expenses
- Not FDIC-insured (investing accounts carry SIPC protection)
Who should get the Betterment?
The Betterment is best for hands-off investors who want automatic rebalancing.
- Hands-off investors who want automatic rebalancing
- Beginners who want to start with no account minimum
- People who value tax-loss harvesting in taxable accounts
How does the Betterment compare?
Among the 6 robo-advisors we track, the Betterment ranks #3 with a money8020 score of 94/100.
| Product | Score | Tier | Provider |
|---|---|---|---|
| Fidelity Go® | 99 | Essential | Fidelity |
| Vanguard Digital Advisor | 97 | Essential | The Vanguard Group |
| Betterment | 94 | Essential | Betterment |
| Wealthfront | 85 | Strong | Wealthfront |
| SoFi Robo Investing | 84 | Strong | SoFi |
See all robo-advisors, ranked →
Common mistakes to avoid with a robo-advisor
- Reacting to market dips by pulling out — the strategy depends on staying invested.
- Overlooking fund expense ratios that stack on top of the management fee.
- Expecting FDIC protection — investments can lose value.
- Picking on fee alone without checking tax-loss harvesting and planning features.
Key takeaways
- Betterment earns a money8020 score of 94/100, ranking #3 of 6 robo-advisors.
- 0.25% annual management fee on the digital plan
- undefined.
- Best for hands-off investors who want automatic rebalancing.
- Rate and FDIC status fetched from Betterment and corroborated against a regulator.
Frequently asked questions about the Betterment
How much does Betterment cost?
Per Betterment, the base price is $5/month, which switches to a 0.25% annual fee on your investing balance once you set up recurring deposits of $200+ per month or reach a $24,000 balance. There is no account minimum to open. Underlying fund expenses are separate.
Is Betterment FDIC insured?
Investing accounts are not FDIC-insured — that is for bank deposits. Betterment investing accounts carry SIPC protection for securities if the firm fails. Betterment's separate Cash Reserve product uses FDIC-insured program banks, but invested portfolios are not FDIC-insured.
Is money in the Betterment insured?
Investments are not FDIC-insured and can lose value. Brokerage assets are typically SIPC-protected if the firm fails, but SIPC does not cover investment losses.
Can I lose money with the Betterment?
Yes. A robo-advisor invests in market securities, so your balance rises and falls with the markets. It suits goals where you can stay invested through ups and downs.
Sources
We fetched these figures from the provider and corroborated them against a regulator, last checked May 30, 2026. Primary sources: