In the ’80s and ’90s, there were just a few investment apps where you could grow your money. Nowadays, there are varying options in the robo-advisor industry.
However, if you are unsure which approach to investing is better for you, this article will compare Betterment, Acorns, and Wealthfront.
As much as you want to go with the best, how much you have to invest and how well you can manage your investment are important factors.
So that you know, each of the robot-advisor industries offers you a special service for overseeing your investments. Don’t forget there are lapses, but it all depends on your choice of an advisor.
Table of contents
What is Betterment?
Founded in 2008 by Jon Stein and Eli Broverman, betterment exists because it has people’s interests at heart. It aims to make its investors financially free to pursue happiness in the best possible way.
On this investment plan, there is an offer for a goal-oriented investment as it is the largest Robo-advisory industry with more than $14 billion assets under management.
Also, betterment handles all aspects of investment for you while creating a registry to meet your investor profile.
What are the Features of Betterment?
The following are the features of this kind of robot-advisor industry. They are as follows:
- Access to Human Advisors: Although it is said that betterment is automated, with the premium option, you can access a human advisor who will financially support you. To get started, you must have a minimum account of $100,000.
- Smart Deposit: Betterment monitors your link to other bank accounts and betterment believes transparency is key.
- Two-Way Sweep: While betterment keeps a close look at the money in your checking to see if there is one nit allocated to anything, it ensures your money does not go below the specified amount. If this happens, it has a way to equalize these things.
- Bank Account Management: Other than the Betterment Cash Reserve, you are offered a savings account with a higher annual percentage yield. Interestingly, you do not need a minimum balance to enjoy this package.
Related: Acorns investing app: How to cash out Easily
Betterment Fees
The following are the two levels of plan on the space.
- Premium: On this investment plan, you are expected to have a minimum balance of $100,000. It will also cost you 0.40% of your assets in total.
- Digital: Here, you are under no obligation to keep a minimum balance and to manage your assets, it will cost you a token of 0.25%.
About Acorns
Acorns cut across as being a Robo-advisor and a savings tool. With over $15 billion under management, it shoots its target at young adults to invest in what they have that they won’t need anytime soon.
This platform endears many investors to itself through its full technology application.
One would ask what the characteristics of Acorns are.
Features of Acorns
- Found Money: Your ability to shop with any Acorns 350 partner companies earns you extra bucks in your investment account. The amount you make for shopping with these partner companies differs. So, it is a bit hard to state a particular amount.
- Round-Ups: Regardless of which account you run, you could easily link up a credit card, debit card, or even a bank account with Acorns. The excess money you spend while making purchases is invested.
Acorns is also a small savings app that renders all the help you need as a fresher and halfway into being an investor.
Read Also: How to Invest: A Beginner’s Guide to Investing in the Stock Market
Acorns Fees
This system has three levels ranging from $1 to $3 monthly. So, here’s how they work and what package you find yourself in.
Using the $1, you gain access to the basic Acorns system, while the $2 monthly fee offers you an opportunity to run a retirement account.
Then, the last fee of $3 gives you access to the first two levels and an Acorns Spend.
What is Wealthfront?
Like every other robo-advisor industry, wealthfront appeals to diverse investors rather than the confined type of investors.
Having such a notion, it is unsurprising how wealthfront has had over 11 billion dollars of assets under management.
What are the Characteristics of Wealthfront?
- Passive Plus: Formerly known as Direct Indexing, this tax-optimization system offers you a lot when it comes to reducing taxes. But, to make use of this, you must have between $100,000 – $500,000.
- Portfolio Line of Credit: Offered by other Robo-advisor industries, there’s a bit of uniqueness in what wealthfront offers. Therefore, you can borrow against your investment account with the portfolio line of credit. Also, it is secured by your investment account.
Wealthfront Fees
It will cost you a fee of 0.25% of your managed assets to be an investor with Wealthfront.
Read: Robinhood vs Acorns: Legit or Scam | Pros & Cons
Betterment vs Acorns vs Wealthfront
To know which of these platforms is the best for 2022, you should have a prior idea of why you want to invest.
Therefore, if you do not have a good number of starting capital and don’t intend to consider the contributing cycle, you can go with Acorns. If you are a student, Acorns is ideal for you, and for the most part, it is reliable.
Be that as it may, Acorns does not have close to as powerful a framework as Betterment and Wealthfront.
Betterment is a good choice with more guidance and planning. It is the only orderly platform to offer human, financial advisors and is suitable for the average investor.
While Wealthfront is an improvement on what Acorns offers its investors, the biggest advantage associated with wealthfront is Direct Indexing.
Final Thoughts
Both Wealthfront and Betterment were four years ahead of Acorns in the Robo-advisor industry. So, your choice will solely depend on what you want your investment experience to look like.
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