Updated January 5, 2024

Betterment vs Wealthfront

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Betterment and Wealthfront are two of the oldest and most popular robo-advisors. Is there a difference? Which is better for you? Read on to find out.

Betterment and Wealthfront are both long-running and very popular robo advisors. This means both can help you invest with as little work as possible. But which one will suit your needs more?

In this guide, you'll learn about each platform and dive into a deep comparison between each platform's cost, minimum deposits, account types, and more.

About Betterment

Betterment is one of the original robo advisors. It helps you turn your investments into something big like a home downpayment, college fund, or even retirement.

It does this by using an algorithm that matches your risk tolerance and specific goals and invests your deposits into diversified portfolios of low-cost ETFs.

The platform was founded in 2008 by Jon Stein in the hopes of making investing easier for everyone. He was looking for a service that automatically handled his money. Eventually, he found that the only way to get that service was to build the platform himself.

Since its launch, Betterment has expanded to even include personalized financial advisory services.

Is Betterment a good robo advisor?
Betterment is one of the leaders when it comes to robo advisors. With it, you have multiple portfolio options (including socially responsible ones) and, for an extra fee, human advisors that can help you even outside your Betterment account.

About Wealthfront

Also launched in 2008, Wealthfront was a forerunner of the robo advisor revolution. Today, it's one of the most popular platforms for automated investment services and automated financial guidance.

Wealthfront lets you invest with your hands off the wheel. With it, you won't have to make many financial decisions. Like many robo advisors, it'll recommend a low-cost, tax-efficient portfolio of ETFs and index funds that match your goals and risk tolerance.

How trustworthy is Wealthfront?
Wealthfront is very trustworthy. They have top-notch security protocols to protect you and your money. Funds held in your Wealthfront Cash Account are FDIC-insured through partner banks, whereas your investment account is protected by the SIPC.

Key Similarities

  • 0.25% annual fee for the basic service
  • Globally diversified portfolio of ETFs using the Modern Portfolio Theory
  • Automatic rebalancing when your asset allocation drifts
  • Tax loss harvesting for all clients at all balances
  • Linking of external accounts to get an overall financial picture
  • Retirement goal tracker that tells you if you're on track
  • Automatic deposits
  • A risk-free savings account with competitive APY
  • SIPC protection for up to $500,000 per account

Key Differences

  • Wealthfront has a $500 minimum opening deposit while Betterment has no minimum deposit requirements.
  • Wealthfront offers more perks for high-balance investors like advanced strategies and automatic lending.
  • Wealthfront offers a 529 College Savings Plan, Betterment does not.
  • Betterment offers fractional shares while Wealthfront does not.
  • By paying a higher annual fee, Betterment gives you access to human advisors while Wealthfront is strictly a robo advisor.
  • Betterment gives you more portfolio options, including a socially-responsible investing portfolio, low-risk portfolio of mutual funds, Goldman Sachs Smart Beta portfolio, and more.

Does Betterment or Wealthfront have better returns?
The returns you receive on each platform will depend on when you invest and what you invest it. It's hard to say which platform will have higher returns, but in general, more aggressive portfolios with either platform will generate higher returns than more conservative ones. Just remember that it also comes with more risk.

Detailed Comparison

Now let's take a more detailed look at how the two compare.

Cost—Winner: Depends

Both Betterment and Wealthfront offer their basic service at a 0.25% annual fee. If your total balance on Betterment is below $20,000 or you don't have a recurring deposit of at least $250/month, you'll be charged $4 instead of the 0.25% annual fee.

Additionally, you'll also have to pay for the expense rations within each fund. Wealthfront selects low fund fees with expense ratios between 0.06% and 0.13%. Betterment's average expense ratio range is 0.007% to 0.15%.

Betterment also offers a Premium service to those with a balance of $100,000 or more at a 0.65% annual fee. This service gives you unlimited access to financial experts. It may cost a bit more, but if you're looking for more of a human touch with your investments, it may be worth it.

Betterment also gives a discount for high-balance investors. For clients with over $2 million, the portion above $2 million gets a 0.10% fee discount. Essentially, this means that the Basic service will only charge you a 0.15% annual fee and the Premium service will only cost 0.30%.

Minimum Deposit—Winner: Betterment

With Betterment, there's no minimum deposit to get started. This makes it great for beginners that don't have a lot to invest or are unsure about using the service.

On the other hand, Wealthfront requires a minimum deposit of $500. It's still a relatively low amunt compared to other robo advisors, but you still have to be certain about the service to commit the cash.

Account Types—Winner: Depends

Account TypeBettermentWealthfront
Individual taxable account
Joint account
Traditional IRA
Roth IRA
Inherited IRA-
401(k) Rollovers
401(k) for business owners-
529 College Savings

Both Betterment and Wealthfront offer similar account types. However, some of more niche accounts are exclusive to one.

For example, Betterment offers inherited IRAs while Wealthfront does not.

On the other hand, Wealthfront offers a more direct approach to opening a 529 College Savings account. This type of account is only available on Betterment to employers who use Betterment at Work for bundled 401(k) benefits.

The only accounts neither platform supports are custodial/minor accounts, solo 401(k)s, HSAs, or self-directed accounts.

Asset Classes—Winner: Wealthfront

Between the two, Wealthfront offers a more well-rounded diversified portfolio as it also invests in real estate and natural resources. It also focuses on more dividend paying stocks, so it may be better if you're looking for more passive income.

Here's a detailed list of asset classes each platform offers:


  • U.S. Total Market
  • U.S. Large Cap
  • U.S. Mid Cap
  • U.S. Small Cap
  • International Developed Market Stocks
  • International Emerging Market Stocks
  • U.S. Short-Term Treasury Bonds
  • U.S. Short-Term Investment-Grade Bonds
  • U.S. Inflation Protected Bonds
  • U.S. Municipal Bonds
  • U.S. High Quality Bonds
  • International Developed Market Bonds
  • International Emerging Market Bonds


  • U.S. Stocks
  • Foreign Developed Market Stocks
  • Foreign Emerging Market Stocks
  • U.S. Dividend Growth Stocks
  • U.S. Government Bonds
  • U.S. Corporate Bonds
  • Emerging Market Bonds
  • U.S. Municipal Bonds
  • Treasury Inflation-Protected Securities (TIPS)
  • Real Estate
  • Natural Resources

Can I lose money at Betterment or Wealthfront?
Yes. Like with any investment, the value of your account on both Betterment and Wealthfront goes up and down with the market value of your investments. Although the portfolios from both platforms are meant to show positive growth over time, experiencing periods of negative returns is still a possibility. Factors that affect this include when your investments were funded and how the market has performed since.

Portfolio Customization—Winner: Wealthfront

Despite both platforms offering a wide range of portfolio options, Wealthfront has a slight edge in the way they design theirs.

Because of Betterment's flexible portfolio, you can tweak asset class weightings and access other classes that aren't included in their core portfolio. This includes commodities, high-yield bonds, and REITs. The downside here is that Betterment doesn't let you add individual ETFs or stocks into your portfolio.

Wealthfront, on the other hand, has over 200 ETFs and cryptocurrency funds that you can use. You can even add these to existing portfolios or create your own for Wealthfront to manage. The edge that this portfolio has over Betterment is that you can add individual assets directly into your portfolio.

When it comes to portfolio management, it's pretty much a tie. Both platforms offer regular rebalancing and the ability to link external accounts.

While Wealthfront only offers their core (yet fully customizable) investment portfolio, Betterment offers a wide array of portfolio options. This allows you to invest your funds into assets that align with your goals and financial risks. This includes the Betterment Core Portfolio, Innovative Technology Portfolio, Climate Impact Portfolio, and more. For the full list, check out their investments page.

Financial Tools—Winner: Wealthfront

Both Betterment and Wealthfront allow you to link external accounts. This helps you get an overall picture of your current finances. However, Wealthfront has the more advanced financial planning tools.

Path, Wealthfront's financial planning tools, are free to use whether you use the robo advisor or not. This tool can help you calculate:

  • How your spending/saving patterns can affect your retirement income
  • What happens if you retire at different ages
  • How big financial decisions would impact retirement
  • The budget for your housing and give you the ability to explore homes within your budget
  • The estimated cost of college and how much financial aid is likely
  • The impact of taking time off work to travel

In comparison, Betterment only offers the simple tracking of your retirement goals. It estimates your portfolio balance over the years and your retirement income. If you're off-track, it tells you how much you should save each year to get back on track.

Human Advisors—Winner: Betterment

Wealthfront's services are completely software-driven. Although that may appeal to many investors, it'll be a downside for those that need personalized advice.

Betterment's Premium service (available to those with at least $100k) comes with unlimited access to financial experts who can provide guidance on life events and investments outside of Betterment.

Betterment also offers Advice Packages to all investors for an extra fee. You can get one-on-one professional guidance on major life events such as college, marriage, or retirement planning. The advisor will go over your situation and provide a personalized action plan.

Tax Strategy—Winner: Wealthfront

Both Betterment and Wealthfront offer tax-loss harvesting to all clients with taxable accounts. However, Wealthfront offers more advanced strategies for higher net-worth investors.

Wealthfront offers US Direct Indexing to those with at least $100,000 in their account. For accounts with over $500,000, Wealthfront offers Smart Beta, which further minimizes the impact of taxes by weighing stocks in your portfolio more intelligently.

Additionally, even though Betterment offers Tax Loss Harvesting+ to all clients, you may not be eligible if your income is below a certain level.

Tax-loss harvesting is a strategy that lowers your federal taxes by intentionally incurring capital losses. This offsets the taxes you get from a capital gain.

Services for High-Balance Investors—Winner: Depends

Both Betterment and Wealthfront offer value-added services for high-balance investors with $100,000 or more. However, the better one for you will depend on which you'd rather have: the potential for higher returns or the ability to talk to financial experts.

Betterment offers unlimited access to financial experts if you choose to upgrade to the Premium service for a higher annual fee. They can provide guidance on any financial matters, even for accounts outside of Betterment.

It'll be more expensive than their Basic plan, but being able to get personalized advice could be worth it if you have complex portfolios or are in a complicated financial situation.

Wealthfront, on the other hand, offers perks such as:

  • US Direct Indexing
    This advanced program purchases individual stocks from the S&P 500, not just ETFs. This allows for more tax reducing opportunities at the stock level.

  • Risk parity
    This advanced strategy weighs risk among the different asset classes. This can provide a better return for a portfolio with the same risk level.

  • Portfolio line of credit
    This unique service allows you to borrow from your portfolio. You can borrow up to 30% of your portfolio value at a low interest rate. It's automatic and there is no credit check.

  • Ability to restrict companies
    You can set which companies you do not wish to invest in. This allows you to build your own socially responsible portfolio.

Is Wealthfront good for beginners?
Yes. Wealthfront is a great choice for beginners or for investors who don't have a lot to start with. Because Wealthfront is a robo advisor, all you need to do is set your preferences (like your risk tolerance) and the platform can do all the heavy lifting for you.

Cash Account—Winner: Depends

Both Betterment and Wealthfront offer cash management services and are evenly matched in that aspect. However, which is better for you will depend on which you prefer: borrowing options (Wealthfront) or basic cash management features (Betterment).

Betterment has two choices for your cash management (both of which can be opened separately from the investing account):

  • Betterment Checking
    The Checking account comes with a Visa cashback debit card and ATM fee reimbursements in the US and internationally. On top of that, it has no overdraft fees and minimum balance requirements.

  • Betterment Cash Reserve
    The Cash Reserve account is a high-yield cash account that has funds deposited across several banks. It has no monthly maintenance fees, unlimited withdrawals, and no minimum balance.

Wealthfront Cash, on the other hand, is also fee-free and interest-bearing. it includes goal-based saving, an ATM debit card, automated transfers to the investment account, bill pay, and direct deposit.

Neither Betterment nor Wealthfront is a bank, and as such, they are not members of the FDIC. Betterment's Cash Reserve account is insured for up to $2 million ($4 million for joint accounts) through their program banks while Wealthfront Cash has up to $8 million ($16 million for joint accounts) in FDIC insurance through their partner banks.

Security—Winner: Tie

When it comes to security, both Betterment and Wealthfront are evenly matched. They both enable top-level security protocols that protect you and your money. This includes security features like two-factor authentication via SMS or an authenticator app on your smartphone.

Additionally, both platforms are covered by $500,000 of SIPC insurance, including $250,000 for cash claims. Just remember that losses caused by normal investment volatility is not insured.

Pros & Cons of Betterment


  • $0 minimum investment
  • Option to get advice from real human financial advisors
  • Several different portfolio options
  • Fractional shares
  • Socially Responsible Investing Portfolio
  • 401(k) for business owners
  • Discount for large balances over $2M


  • Less advanced financial tools
  • Less diversified asset classes

Pros & Cons of Wealthfront


  • Free advanced financial tools
  • More diversified portfolio including real estate and natural resources
  • US Direct Indexing (for accounts with over $100k)
  • Risk parity (for accounts with over $100k)
  • Ability to borrow against your portfolio (for accounts with over $100k)
  • Free savings account with high APY


  • No human advisors
  • No fractional shares
  • No Socially Responsible Portfolio
  • $500 minimum investment


If neither Betterment nor Wealthfront sound like the right fit, there are a few other options for you:

If you like the idea of the robo-advisor and have a "set-it-and-forget-it" approach, Acorns could be the right fit for you.

One of Acorns' most unique features is its Round-Ups feature. This automated-investing feature rounds up your linked credit/debit card transactions to the nearest dollar. As soon as the spare charge amounts to $5, it's then invested into an expert-built portfolios of ETFs.

As soon as you sign up, Acorns will recommend diversified portfolios. From there, you can pick one depending on how aggressive you want to be.

If you prefer a more DIY-approach to trading, Robinhood is a good place to start. It offers commission-free trading and fractional shares, allowing you to invest in stocks, ETFs, and cryptocurrencies for as low as $1.

Robinhood offers a very beginner-friendly UI, allowing you to just pick it up and start trading.

Bottom Line

Both platforms are great options for beginners with just little to invest. However, which is best for you will depend on your needs.

  • Betterment may be better if you aren't willing to commit a $500 opening deposit, want access to human advisors, or want to invest in different types of portfolios.

  • Wealthfront may be the better choice if you're planning on putting in over $100k or want a more diversified portfolio that includes real estate and natural resources.


  1. ^ Wealthfront. Automated Investing Methodology White Paper, Retrieved 01/04/24

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