Betterment vs Acorns Compared – Which is the Better Investing System?   

When it comes to investing, it is important to know that you are in good hands. If you are thinking of robo-advisors to help you financially, you will come across two of the best robo-advisors available today: Betterment and Acorns. Both will allow you to invest passively without having to move an inch, but which is better for you? 


In this article, we will compare Betterment and Acorns based on their ease of use, fees, capital, investing methodology, features, promotions, and security. 

Who Should Use Which? 


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If you are inexperienced and want to invest a little amount of your money or just your loose change, Acorns could be your best shot; which isn’t to say that experienced investors can no longer use it. It is an application that is meant to make investing simple – it can be your first step to investing because of its user-friendly interface, this is especially useful to people who are not familiar with online investments. 


Betterment is for people who have more money to invest because of its powerful tool that can link multiple external accounts, retirement accounts, and brokerage accounts to each other. It’s a good choice for people who are willing to learn and ready to take a risk for a big return. 

Ease of Use 


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What’s the best way of enticing you to choose Acorns over Betterment? The founder of Acorns has the answer, and he did it. Acorns, an award-winning app towards their design, is one of the most beautifully-designed applications on your smartphone. For Acorns, investing is not just all about making money, it’s also about doing your business easy and fun. And it’s not just their app that is beautiful, their website is equally pleasant-looking too. 


Betterment’s app, on the other hand, is not all bad. You can do your job just like how you can do your business with Acorns, but it ends there. You open the Betterment app, do your routine, and get out – that’s it. Some people may say simplicity is beauty, and that there’s no time to play and have fun while doing business. No, investing is serious but adding a little bit of beauty can help refresh your mind. 


THE WINNER: Acorns. Both are equally easy to use and will allow you to do your business in the fastest way possible. But what makes Acorns stand out is that you can see beautiful graphs within their app that will help you manage your investments. Unlike Betterment, you have to visit their website to see these. 



Unlike manual investing, using a robo-advisor will cost you. So what are the management fees for using Acorns and Betterment? Acorns offer a fixed fee of 0.25% a year for investments over $5000, whereas Betterment will bill you 0.25% to 0.50% yearly. 


When using your Acorns account, you are sure how much you will be billed for that year – with their flat-rate fees, you can calculate your budget in no time. A Betterment account, on the other hand, offers a variable management fee, meaning your fees will depend on how much money you are going to invest. 


Using the services of an Acorns account will cost you $1/month, you will only pay the 0.25% charge if you will invest more than $5000, or if your mportfolio reaches more than that amount. So if you think you will not reach the $5,000-mark anytime soon, Acorns is the best app for you. 


For investments reaching $5,000 to $100,000, both will have fees of 0.25%. But if you have more than $100,000 in your portfolio, Betterment will charge you a 0.40% management fee that could hurt your budget. 


THE WINNER: Acorns. The right app for you depends on your objective and outlook for your investments over the long-run. Unless you have more than $5,000 to invest but less than $100,000, you can choose Betterment. 




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Acorns and Betterment do not have a minimum investment requirement. Both are friendly to new investors who have a low risk tolerance, and to experienced investors who are ready to gamble. So if you have a small capital or a small taxable account, you do not have to worry about anything if your choice is only between Acorns and Betterment. 


THE WINNER: Tie. With no minimum deposit, both apps encourage people to invest how much they want, in any way they want. But it’s important to note that Acorns will only charge you $1/month if your capital is below $5000. 

Investing Methodology 

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Both Acorns and Betterment boast that they use the Modern Portfolio Theory to determine investments. The main difference though is that Acorns says that their “portfolios are developed with help from Dr. Harry Markowitz, the Nobel Laureate commonly referred to as theFather of Modern Portfolio Theory,” which leads to a problem: Acorns leaves us with that statement.  


Betterment has a 3,386-word white paper entitled “Our Investment Selection Methodology,” which means to say that they want to educate you in the easiest manner possible. They have nothing to hide, all cards on the table, you just have to read and understand every decision they have made. 


Asset Classes: A Betterment account supports Exchange-Traded Funds (ETFs) of up to 13 asset classes, which compares positively to Acorns that supports Exchange-Traded Funds (ETFs) from just 6 asset classes 


THE WINNER: Betterment. Betterment wins this category with a broader asset class selection, and add to that their comprehensive guide on how they handle your investments. 



With both robo-advisors charging you yearly fees, why would you pay for their services? 

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Automatic rebalancing: This is a solution to your investments when they experience a drift. Drift is what occurs in your portfolio over time as several investments grow faster than others. With automatic rebalancing, your portfolio will remain balanced.  


No transaction fees. Without a robo-advisor, you’ll get charged with commissions from your broker every time you buy or sell. With Betterment or Acorns, you will not be paying any transaction fees whether you add or withdraw funds from your account. The amount you can save from these transaction fees makes it a wise choice to use a robo-advisor. In addition, both services protect you if you have a low risk tolerance, with zero tax implications. 


Acorns’ core feature is Round-Up. The system is that you connect your checking account and credit cards to Acorns and they will round-up every transaction to the nearest dollar and invest it. Not many apps link to your checking account and credit cards, so this is a perk. If you spent $3.16 at Walmart, you’ve just invested $0.84. These small investments of spare change are called acorns. They add up little by little, and before you know it, you’re operating a profitable stash without moving an inch. This makes Acorns a unique investment app. 


Betterment’s core feature is Tax-Loss Harvesting (TLH). Betterment explains TLH as “the practice of selling a security that has experienced a tax loss.” This is especially useful to investors as they are able to offset taxes on taxable accounts such as gains and income. Acorns does not offer Tax-Loss Harvesting, so if you want to earn more now than when you give up work, Tax-Loss Harvesting can be advantageous as it can bring big gains over time to your portfolio. 


RetireGuide is another big feature of a Betterment account. This is useful to those retired or retiring in the near future. Although not for everyone, it still adds up to Betterment’s fight against Acorn. More information on RetireGuide can be found here. 


THE WINNER: Betterment. Acorns’ Round-Up is a great feature and perfect for non-savers, but it will not generate money as much as Betterment’s TLH. If you want your money to grow faster automatically, TLH can do that for you. Add to that their ReitreGuide and you are on your way to making money while asleep. 



Several companies will encourage you to invest with them using tons of enticing deals. But even if these deals are great, you have to make sure that they are perfect for you, so it’s important to do your research before signing up. 


Currently, students can invest for free using Acorns, as long as that student has a valid .edu email address. With this promotion, they are targeting students as potential investors while they are still young. And possibly so they can grow old with them, brilliant! 


Betterment offers up to 6 months of service completely free for everyone regardless of their occupational status. Although time-limited, a six-month free service is still a big help, but knowing what the fees will be after that initial six-month term is vital. 


THE WINNER: Betterment. Because Betterment provides better features than Acorns, it’s safe to say that they can charge you for using their services. With their six months of free service, you can save as much as $250 every month. 



Acorns and Betterment are both protected under SIPC and registered with the SEC. SIPC does protect against unsuccessful brokerage companies from bankruptcy or other matters of insolvency that might cause them to be unable to pay you your money back.  


You’re insured up to $500,000 with each brokerage through SIPC for that. So whether you invest in Acorns or Betterment, your money is safe and secured. 


It’s important to note that SIPC will not protect your assets from a stock market decline. If your investments’ value decline because of the stock market’s instability, you can’t ask SIPC to cover you. 


THE WINNER: Tie. Security is a number one priority when it comes to money, especially when you are investing it. Acorns and Betterment are legitimate and above the board with what they are doing. Both offer safe and secure transactions without hidden fees.  

The Bottom Line 

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If you're looking for a user-friendly investment app, both the Acorns app and Betterment app are designed well, centered on a smart system, and prepared to help you save and invest your spare change today. Neither the Acorns app nor the Betterment app rates higher than the other.


In the battle of Acorn vs Betterment, for the average investor Betterment is the clear winner. Although Acorns may seem cool and fun because of its Round-Up feature, it will not make you rich enough to get on a day when you retire. With Betterment having been found in 2008, it has a few years head start on Acorns, which was founded in 2012. 


OUR ADVICE: Do not limit yourself to just one robo-advisor. Use Betterment to manage your overall investments while you use Acorns to save and invest your spare change. 

Visit our Betterment vs Wealthfront review here to decide if Betterment or Wealthfront is right for you. In the Betterment vs Wealthfront review, you will also find information on Vanguard. Vanguard is another investment app that can help you play the stock market without vetting traditional financial advisors and paying an exorbitant management fee.

In addition to playing the stocks, you can manage exchange-traded funds, tax-efficient investing, asset allocation, direct indexing, and your taxable accounts. Whether you compare Wealthfront vs Betterment, Acorn vs Betterment, an investing app against traditional financial advisors or anything in between, there are often multiple solutions depending on your needs. Robo advisors have helped people as they build their investment account, savings account, and retirement accounts.

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