Betterment vs ETRADE

ETRADE vs Betterment (2022)


Betterment vs ETRADE for online investing. Compare cost, brokerage fees, IRA accounts, and differences. Which firm is better?


E*Trade vs. Betterment Introduction


Which brokerage house offers the better investment experience, E*Trade or Betterment? While Betterment emphasizes simplicity, E*Trade emphasizes investment choices. The details reveal even more differences.


Cost


Broker Review Promotion
Offer
Stock/ETF
Commission
Mutual Fund
Commission
Maintenance
Fee
Annual IRA
Fee
Etrade Get zero commission on stock and ETF trades. $0 $19.95 $0 $0
Betterment na na na 0.25% 0.25%


Promotions


Betterment: Up to a whole year managed for free with this promotion.

E*Trade: Get zero commission on stock and ETF trades.



For Investment Methods, We Like E*Trade Better


Betterment has robo accounts only. The company’s software program trades exchange-traded funds only. There is a very small selection of funds that are eligible for Betterment’s program. Typically, these are Vanguard, iShares, and Goldman Sachs funds with low expense ratios.


Betterment vs Etrade


Betterment has recently acquired Makara, a cryptocurrency platform. As a result, Betterment will soon offer the ability to auto-invest in digital currencies.

E*Trade offers indirect crypto investing via futures contracts. Through self-directed accounts (which aren’t available at Betterment), E*Trade also provides trading in stocks, mutual funds, ETFs, closed-end funds, bonds, and options.


Etrade vs Betterment


E*Trade has robo accounts, too. They’re a little more expensive than Betterment’s (30 basis points versus 25). Both companies offer traditional human advisors for an extra fee.


For Website Technology, E*Trade Is Better


The Betterment site is easy to use and well designed. The downside of the company’s attractive website is that there’s not much on it. Remember, the brokerage firm has no self-directed accounts, and this means there are no trading tools. There are widgets for a variety of robo functions, like goal setting and net worth calculation.


Betterment or Etrade


E*Trade is a completely different animal here. The broker’s website has a trading ticket with several order types, charts with some very useful tools, and a host of self-help features. And this is just the self-directed side.


Etrade or Betterment


Robo accounts are shown side-by-side self-directed accounts. It takes just a single login to access them (although E*Trade won’t link some account types, such as custodial and investment club accounts).

And then there’s Power E*Trade. This is a browser platform that pops out to form its own window. During our test drive of the software, we really liked its advanced charting and pro-level order ticket. Examples of trade types include One-Triggers-OCO and Stop Limit on Quote. Examples of technical studies include Pring’s Know Sure Thing and Vertical Horizontal Filter. Lastly, there’s a practice mode, which really helps to learn the software.


For Mobile Apps, E*Trade Is Again Better


Investors at E*Trade get to use 2 apps. One is a clone of the Power browser platform and is designed for futures trading (although it can trade options and equities). Combined, the two platforms deliver a very thorough investing experience. During our probing, we found all sorts of tools. These range from simple cash management tools like mobile check deposit to advanced order tickets with professional-level order types. The Power app has a simulated-trading mode.


Etrade versus Betterment


Betterment delivers just 1 app. Like its website, it is very simple. Actually, the app is even simpler. We didn’t find much information on it. The advantage of this system is that the platform is easy to navigate. The disadvantage is that many tools are missing, including mobile check deposit.

Betterment’s app is designed for phones only, whereas E*Trade’s app is designed for both phones and tablets.


For Other Software, E*Trade Is Better By Far


E*Trade also has an app for Apple Watch. Once connected to an iPhone, the software can deliver quite a few helpful screens. These include market indexes with graphs, a watchlist, the current temperature, the current time, an account’s increase or decrease for the day, and more.

There’s one more software platform that E*Trade clients get to use: E*Trade Pro. This is the company’s very advanced desktop platform, and it has many advanced features, not least of which is order routing.

Betterment has nothing in this category.


For Margin Trading, E*Trade Is Definitely Better


Taxable accounts at E*Trade can be opened either as cash or margin accounts. A cash account can always be upgraded later to a margin account. The link to do this is on the Margin hub. To find this section, hover over the Accounts tab on the website and click on Portfolios.

This Margin section also has a tool to check the margin requirements of a specific stock or ETF. It’s really handy if you plan to trade a security using margin.

Currently, E*Trade is charging 10.45% for small margin debits. This rate declines to 7.45% for large balances.

Betterment does not offer margin accounts at this time.


And E*Trade Is Better for Miscellaneous Services


Periodic Mutual Fund Investing: E*Trade has it.

Individual Retirement Accounts: E*Trade has more IRA types than Betterment, although E*Trade does charge a few IRA fees that Betterment doesn’t have.

DRIP Service: Self-directed traders at E*Trade can set up automatic dividend reinvesting on stocks, ETFs, and mutual funds.

Extended Hours Trading: E*Trade has early-morning and late-night trading. It even has overnight trading in some ETFs.

Banking Tools: E*Trade and Betterment both offer bank accounts with FDIC insurance.

Initial Public Offerings: Only E*Trade customers get to participate in upcoming IPOs.

Fractional Shares: Both robo programs purchase fractional shares of ETFs. E*Trade does not yet offer fractional-share trading in its self-directed accounts.


Now, Our Recommendations


Mutual Fund Trading: E*Trade is the only option.

ETF/Stock Trading: For stocks, E*Trade is the only option. For robo ETFs, both firms will be similar. For self-directed trading of funds, E*Trade is it.

Long-Term Investors & Retirement Savers: Betterment and E*Trade both have retirement planning tools on their websites. Only E*Trade has target-date mutual funds, individual 401(k) accounts (Betterment does offer 401(k)’s for employers), and the SIMPLE IRA. Plus, E*Trade has life insurance. We would choose E*Trade.

Small Accounts: E*Trade’s automated account service has a $500 minimum deposit requirement. Betterment has no minimum. To get a human advisor at Betterment, a $100,000 account balance is required. E*Trade starts at $25,000 for traditional management.

Beginners: Either automated program will work. E*Trade does have an advantage because robo customers will get access to Power E*Trade, which has a practice mode. Plus, E*Trade has decent (not great) educational materials for novice self-directed investors.


Promotions


Betterment: Up to a whole year managed for free with this promotion.

E*Trade: Get zero commission on stock and ETF trades.



E*Trade vs Betterment - Final Thoughts


Betterment has failed to live up to its name. E*Trade provides a much better overall investing experience.

Updated on 5/1/2022.


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.