M1 Finance

Betterment vs Acorns (2021)

Compare Acorns versus Betterment - which broker is better in 2021? IRA/Roth accounts, online investing fees, broker mutual fund rates, and differences.


Acorns and Betterment are two financial companies that specialize in robo investing. Betterment is the older of the two, but that doesn’t mean it has the upper hand. Take a look at this:


Broker Fees Stock/ETF
Mutual Fund
Annual IRA
Betterment na na na 0.25% 0.25%
Acorns na na na $1-$3 per month $1-$3 per month

Promotion Links

Acorns: Try Acorns for free and get a $5 friend referral bonus.

Betterment: Get 1 month free of Betterment service if you invest $5,000 – $24,999.

Available Assets and Investing Styles

Acorns and Betterment are both robo-only advisors. This means they only offer automated investing accounts. Neither broker provides self-directed accounts, so you won’t find a lot of advanced software or other tools for active trading.

So what specifically do these two firms offer? Exchange-traded funds with low expense ratios. More precisely, a small selection of ETFs. You won’t be able to trade all ETFs on the American exchanges; and in fact, the software programs of both firms decide what ETFs you’ll be investing in and which ones you won’t get. This decision is made using answers you will provide in a questionnaire. Up to this point, Acorns and Betterment are very similar.

With every robo account, Acorns offers a round-up service. When you use a linked card at any retailer, the broker’s software rounds up the purchase to the nearest whole dollar, and the difference appears in your Acorns brokerage account. Betterment doesn’t offer this type of service.

A second program that Acorns offers is a bonus investment system. When you use your card at a limited number of retailers (Walmart and Macy’s are two examples) you will earn cash back, which also eventually gets invested. Betterment has a similar service with some of the same retailers.

Betterment also provides (for an additional fee) access to human advisors who can help with all sorts of financial decisions, from saving for education to planning for retirement.

Winner: Overall, we think it’s pretty even

Acorns Investing Review

Cost of Portfolio Management

Acorns charges a flat monthly fee for its service. It’s $1, $3, or $5 per month, depending on the package you select. Betterment is different. It charges a percent of assets under management. The fee ranges from 0.25% to 1.5%, depending on the service you need. Betterment’s banking tools are completely free, which is not the case with Acorns.

Winner: Depends on account balance

Banking Tools

On the $3-per-month plan, Acorns clients get a checking account on top of the standard investment account. They are separate accounts. The checking option comes with a Visa debit card that’s made out of tungsten. It is with this card that you earn cash back. The company’s round-up service can be used with any linked card. Acorns reimburses ATM fees.

Betterment has two cash management accounts: a checking and cash reserve account. The former comes with ATM fee rebates with no network limit (Acorns limits its rebate policy to about 55,000 machines). The latter pays an APY (currently, it’s 0.40%) with four times the normal level of FDIC insurance.

Winner: Betterment

Betterment vs Acorns

Margin Borrowing

Neither brokerage firm in this meeting provides active trading services of any kind. As such, margin accounts are not available.

Winner: Draw


Because neither firm in this matchup offers self-directed trading, you won’t find the most advanced software in the world. Neither broker has a browser platform or a desktop program; so a website is all you’ll get.

Acorns’ site has basic tools for account monitoring. One widget displays a projected account value based on current investments, balance, and contribution frequency. There are also tools for earning cash back.


Over at Betterment, the story is much the same. There are several widgets for account management. One displays the specific ETFs that a robo account is invested in, with current percent weightings. Another tool shows projected account growth, similar to the tool that we found on Acorns’ site.

Betterment vs Acorns

Winner: Pretty even

Mobile Apps

If you’re away from your desk, you can always pull out your phone and manage both Acorns and Betterment accounts. With the Betterment app, you can set goals, like buy a home or build an emergency fund. Betterment’s software will tell you if you’re on track or not. You can follow your investing account or use cash management tools, such as depositing a check or setting up recurring deposits.

At Acorns, we find much the same situation, with widgets for check deposit, managing round-ups and cash back, and monitoring investment performance. One service that Acorns offers that Betterment doesn’t is iMessage.

Winner: Acorns

Miscellaneous Services

Dividend Reinvestment Program: At both Acorns and Betterment, cash dividends from ETFs get reinvested as additional shares.

IRAs: Roth, Traditional, and SEP plans are available at both firms.

Fractional-share Trading: The robo services at both Acorns and Betterment are able to trade fractional shares of the few ETFs available.

IPO availability: Neither Acorns nor Betterment offers access to Initial Public Offerings.

Extended hours: These broker-dealers are robo firms; so just forget about extended hours.

Winner: Tie

Finally, Our Recommendations

ETF and Stock Trading: Stock trading is not possible, and ETF trading is about even.

Retirement Savers and Long-Term Investors: IRAs are not available at Acorns on the broker’s $1 per-month plan. They are available with Betterment’s cheapest subscription plan. So we would suggest Betterment.

Beginners: One service that Acorns has that Betterment doesn’t is an educational program called Grow. It is in partnership with CNBC. There are videos and articles on a wide variety of topics. Betterment does have some learning materials, but they are not as extensive as Acorns’ resources.

Small Accounts: We pick Betterment because it doesn’t have a flat fee.

Promotion Links

Acorns: Try Acorns for free and get a $5 friend referral bonus.

Betterment: Get 1 month free of Betterment service if you invest $5,000 – $24,999.

Betterment vs Acorns - Outcome

Acorns and Betterment are very close in many categories. Where Acorns really shines is in its round-up service; while Betterment excels in the traditional advisory category.