Betterment allows you to set multiple investing goals and offers tax-advantaged investing, while Acorns offers a clever automatic investing function that makes building your portfolio very easy. Betterment is better for those looking for tax-efficient investing as well as the ability to use accounts for multiple goals.
You can deposit money directly just like with any other service. However, the automatic investment feature is arguably Acorns' key selling point. Betterment, on the other hand, is more straightforward. It does not offer Acorns' automatic investment feature, but instead focuses more on growing larger portfolios.
There's both good news and bad news with the Acorns fee structure. The bad news is that the fee is prohibitive on small accounts. ... That's a 12% fee, which is completely off the charts when compared to other robo-advisors. But the good news is the fee is ridiculously low on larger account balances.
Furthermore, the long-term average annualised return in a balanced investment of the exchange-traded funds in which Acorns invests is closer to 7.5 per cent. ... As a rule of thumb, investors should learn to keep their investment fees to less than 1 per cent a year, but aim for 0.2 per cent as savings grow.
Acorns can be a great way to start growing your taxable investments, a key part of any retiree's portfolio. Overall, Acorns is a fantastic way to get started in the investing world and build a portfolio without dealing with the headache that can come with HR.
If you can do it yourself, Robinhood is great. If you can't and want to pay someone for help, Stash and Acorns are both excellent products. But be aware that the cost comes out of your investment gains, and $1 per month in fees is a cost that adds up over time.
Compare Robo Advisors
| Robo Advisor | Why We Picked It | Account Minimum |
|---|---|---|
| Betterment | Best Overall | $0 |
| Charles Schwab | Runner-Up | $5,000 |
| SoFi | Best for No Fees | $0 |
| Wealthfront | Best for Multiple Accounts | $500 |
What's the Catch? The biggest catch with an Acorns account is the cost. Unlike other robo-advisors, Acorns charges a flat management fee. Spending just $1 each month sounds great, but it can actually work out to a high percentage of your assets if you don't have a lot of money in your account.
You may owe taxes on any dividends you earn. ... Acorns automatically reinvests those for you, but you may still owe taxes on them. Your 1099 form will note any dividends you receive in the 1099-DIV section if you earned more than $10 in dividends in the previous year.
| Stocks with the Most Momentum | ||
|---|---|---|
| Carvana Co. ( CVNA) | 274.17 | 665.8 |
| Tesla Inc. ( TSLA) | 662.16 | 662.3 |
| Etsy Inc. ( ETSY) | 219.67 | 565.1 |
| Russell 1000 | N/A | 83.1 |
Acorns Earn (Found Money): You can earn extra money when you shop with Acorns' 350+ retailer partners. Just link your credit or debit card to your Acorns account and shop. The retailer will deposit a percentage of your purchase into your investment account.
If the idea of losing a ton of money in the stock market makes you nervous, use Acorns to start making small contributions. You can begin with roundups and even increase weekly or monthly deposits at your own pace. If you lose some money in the event the market falls, you may not suffer too great a loss.
If it happened acorns would likely inform everyone that they're closing and everyone should rollover and withdraw their money. If you don't withdraw then your money is protected (deposits not interest) and it would most likely be made available to you from a different brokerage.
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