Betterment Vs. Wealthfront: Which Is Best For You?

A robo-advisor offers automated portfolio administration for traders, choosing investments for you utilizing an algorithm based mostly in your threat tolerance and if you want the cash.

Betterment and Wealthfront are two of the highest robo-advisors in a crowded discipline that features platforms powered by the largest names within the brokerage world.

These robo specialists have years of expertise perfecting their choices for patrons who desire a professionally managed portfolio at an reasonably priced value. Plus, they’ve regularly added providers that transcend what you’d anticipate from a standalone robo-advisor.

Each Betterment and Wealthfront scored high marks in Bankrate’s newest evaluations (with Betterment taking the highest honors for finest robo-advisor general in 2025). These robos have so much in frequent, but it surely’s the variations — which we dive into beneath — that may enable you determine which supplier finest meets your monetary wants.

Our take

Prime robo-advisors use low-cost exchange-traded funds to construct your portfolio after which add on a heap of value-added options reminiscent of tax-loss harvesting and a money administration account. The result’s a portfolio that might be able to outperform a human-created portfolio. 

Right here’s how Betterment and Wealthfront evaluate face to face in 5 key classes.

Portfolio administration

Edge: It’s an in depth name, however Wealthfront wins out on this class if you need the power to incorporate a wide selection of funding selections in your portfolio past what robo-advisors sometimes provide.

In the event you’re looking for a extra conventional cash administration relationship that features entry to a monetary planner, Betterment has the apparent leg up since Wealthfront doesn’t provide a human advisor choice.

In lots of respects, Betterment and Wealthfront look related by way of managing your portfolio. Each provide refined portfolio administration and tax methods that may scale back the web value of the service (extra beneath). Every additionally lets you acquire publicity to cryptocurrency, too, should you’re serious about that. 

Past the additional bells and whistles, which can or could not improve your returns, right here’s how they stack up.

Betterment portfolio administration

Betterment constructs a portfolio based mostly on 13 asset courses, and lets you set a number of objectives and save for them individually. You’ll have entry to a wise beta fund, which weights varied elements to attempt to beat the market return, in addition to socially accountable investments. You possibly can go “all money” or “all bonds,” and you’ve got some freedom to regulate your portfolio’s weightings.

Though each Betterment and Wealthfront are designed to perform with out human advisors, a key differentiator is Betterment’s choice to talk with certified human advisors — a pleasant function for instances when non-routine questions that may’t be answered by an FAQ do come up.

You’ll have to deliver $100,000 or extra to Betterment to qualify for the premium tier that features limitless entry to its workforce of licensed monetary planners (CFPs). 

Wealthfront portfolio administration

Equally, at Wealthfront you’ll be able to create a custom-made portfolio from lots of of ETFs and make investments for a number of objectives. In the event you’re wanting so as to add a selected ETF to your portfolio, Wealthfront offers you an absolute ton of selections and allows you to tinker together with your allocations, providing you extra freedom.

Revenue traders will recognize the robo-advisor’s Automated Bond Ladder, which handles the heavy lifting of constructing a ladder of U.S. Treasurys with completely different maturities and dangers whereas serving to you keep away from state and native taxes on curiosity.

With greater than $500,000, you’ll be able to entry Wealthfront’s sensible beta fund, which weights options in your investments to drive returns up.

Wealthfront additionally launched the power to purchase particular person shares in early 2023, and you may add fractional shares with a minimal funding of $1 and no buying and selling fee. Extra lately, the agency added direct indexing as an choice, which provides one other layer of customizability and permits the robo to optimize losses for tax-loss harvesting. (Extra on this beneath.)

Money administration account

Edge: Wealthfront. Used responsibly, the portfolio line of credit score they provide is a superb function, supplying you with entry to a low-cost mortgage at nearly any level.

Wealthfront and Betterment are shut in the case of the money administration accounts they provide. Actually, they’re a few of the finest within the business and pay curiosity, not like many accounts. Each provide accounts that commonly ratchet up (or down) charges because the prevailing fee shifts, making them an incredible place to stash your money when charges are excessive.

Right here’s how their money administration accounts stack up:

These two robo-advisors are an identical on so many options, however let’s run by way of just a few variations:

• Early direct deposit: Wealthfront provides early direct deposit in your payroll examine, so you will get that cash working for you quicker, whereas Betterment doesn’t.
• Price-free ATMs: Each provide entry, however Betterment’s attain is broader.
• Portfolio line of credit score: Wealthfront lets you borrow as much as 30 % in opposition to your automated investing account (if it’s above $25,000) at a low fee. You possibly can have the cash in hours. Betterment doesn’t provide this function.

Wealthfront provides a greater suite of options, with early direct deposit and a portfolio line of credit score, permitting you quick entry to a mortgage, which can be useful when paying off high-rate debt.

In the meantime, fee-free ATMs are a pleasant add-on provided by each, however money is changing into much less crucial each day. Nonetheless, frequent vacationers overseas could discover Betterment’s international ATM protection a worthwhile perk of the account.

Administration and fund charges

Edge: This class is just too near name for many traders when evaluating the core portfolio administration providers and expense ratios on investments.

Betterment and Wealthfront are neck and neck in the case of administration charges on their primary plans (which go to the robo-advisor) and fund charges (which go to the corporate that created the fund).

Portfolio administration charges

Each Betterment and Wealthfront cost 0.25 % of property yearly for his or her core portfolio administration providers, which interprets right into a $25 payment for each $10,000 invested.

Betterment has extra payment tiers based mostly on account stability:

• Digital plan: The 0.25 annual payment applies to clients with $20,000 or extra throughout all accounts. These with much less are charged a $4 month-to-month payment as an alternative. Betterment waives the month-to-month payment should you arrange a $250 or extra month-to-month recurring deposit.
• Premium plan: This second tier of service steps up the value to 0.65 % of property (with not less than $100,000 within the account), or $65 per yr for every $10,000 invested. That is the extent that buys entry to a workforce of CFPs who can advise on investments held exterior of Betterment accounts.
• Low cost for high-dollar portfolios: Rich traders in both plan earn a administration payment low cost of 0.1 % on the portion of their portfolio that exceeds $2 million. That brings the digital plan administration payment to 0.15 % and the premium plan to 0.55 %.

On the subject of ETF charges, the race is simply as tight. Betterment says its portfolios common between 0.05 % and 0.24 %, relying on precisely what’s in it. That will value between $5 and $24 yearly for each $10,000 invested. 

Wealthfront is true there, with a median portfolio costing about 0.08 %. Both method, it’s about as low cost because it will get.

In apply, the ETF charges that you simply’d pay at both robo-advisor rely precisely on what sort of portfolio is constructed and that is determined by your particular person wants and preferences.

Tax technique

Edge: With potential larger returns and direct indexing, Wealthfront comes out forward on this class, however Betterment provides a stable function set, too.

A robo-advisor also can add worth by way of its tax technique, which is a crucial consideration for traders with cash invested exterior of tax-advantaged retirement accounts. Robo-advisors are ideally located to carry out tax-loss harvesting, with the power to do trades that will be onerous for a human advisor. Tax-loss harvesting means promoting losers to take a tax loss that may offset positive aspects.

Betterment tax technique

Betterment makes use of day by day tax-loss harvesting to attempt to maximize your positive aspects. Sometimes, they’ll promote one fund after which change it with one other that has many related options. You’ll have entry to this service with any degree of property you deliver to the accounts.

Betterment additionally has a tax-coordinated portfolio that tries to attenuate taxes by optimally placing investments in taxable and tax-advantaged accounts reminiscent of an IRA. The robo says this service improves after-tax returns by about 0.48 % yearly, or about twice the core advisory payment.

Wealthfront tax technique

Wealthfront additionally makes use of day by day tax-loss harvesting, but it surely takes it to the following degree. 

When you’ve greater than $100,000, Wealthfront can begin utilizing direct indexing, supplying you with extra alternatives to appreciate financial savings. So slightly than proudly owning the fund, your account owns the constituent shares. In any given buying and selling day, Wealthfront has extra alternatives to take losses with this stock-level tax-loss harvesting, that means extra financial savings over time. (Wealthfront’s S&P 500 Direct indexing technique centered solely on that index’s holdings is out there at a decrease $20,000 funding minimal.)

Wealthfront says its tax-loss harvesting program can recoup its administration payment for 97 % of its purchasers. The robo-advisor says that purchasers in riskier portfolios (that’s, stock-heavy) have seen an estimated after-tax good thing about six to 13 instances the advisory payment.

Options and instruments

Edge: Wealthfront. Its glorious planning instrument (which is de facto a number of instruments in a single) and helpful Self-Driving Cash function evaluate properly in opposition to Betterment’s helpful (however extra narrowly centered) instruments.

Betterment and Wealthfront each provide options and instruments that may add worth to your account.

In addition to these already talked about, Betterment’s instruments embrace:

• Tax affect preview, which lets you see how a monetary determination impacts your taxes
• Charitable giving instrument, which helps you handle your giving and receipts, and save extra on taxes, too
• Retirement-planning instrument, which provides options on the right way to optimize your portfolio to fulfill your retirement wants
• Purpose-based saving instrument, which helps you set completely different objectives and save for them. It additionally lets you rank your objectives by way of precedence.

Along with these already talked about, Wealthfront’s instruments embrace:

• Path monetary planning instrument, a strong instrument that helps you propose for a number of monetary objectives by pulling in all of your spending and monetary information. You possibly can undertaking your web value over time, and see how spending in a single space can have an effect on your progress to different objectives in an easy-to-use graphic. You’ll additionally be capable to use the instrument to plan for school and open a 529 school financial savings plan with Wealthfront or hyperlink an outdoor plan. You possibly can even funds for day without work and see how that impacts your objectives.

Plus, Wealthfront’s complete planning instrument is out there even should you don’t select to have the robo handle your cash. You merely have to open a Wealthfront account to realize entry and hyperlink to your different monetary accounts to get probably the most correct outcomes.

Who’s Betterment finest for?

Betterment is right for each new traders simply beginning out (because of its $0 minimal for the digital tier) and people with $100,000 or extra who need the choice to seek the advice of with a monetary planner at any time. Notable choices embrace:

• Limitless entry to human monetary planners for bigger portfolios.
• No-fee account administration and no minimal funding requirement for patrons with lower than $20,000 who arrange an automatic month-to-month deposit.
• Aggressive fee on a no-fee money administration account that features a debit card, ATM and checking.
• Tax-optimization methods for taxable accounts (e.g., day by day tax-loss harvesting and a tax-coordinated portfolio).

Who’s Wealthfront finest for?

Wealthfront’s all-encompassing funding choices (together with particular person shares, bond ladders and direct investing) is a boon to these on the lookout for cash administration that goes properly past what’s provided by a typical robo-advisory. Highlights embrace:

• Refined portfolio administration providers that supply a excessive diploma of customization.
• No-commission buying and selling in particular person shares and ETFs.
• Entry to automated bond laddering, direct indexing providers and monetary planning instruments.
• Excessive-interest money administration account with free banking options (together with checking, invoice pay and free ATM entry).

Backside line

The core portfolio administration providers and administration charges at each Betterment and Wealthfront are excellent and really related, as are the options of their perk-heavy money administration accounts. However whether or not you go along with one or the opposite relies upon so much in your particular person wants. 

For instance, should you want a human advisor and meet the minimal funding requirement for limitless entry, Betterment could also be your reply. If the power to spend money on particular person shares (by way of a brokerage or entry to direct indexing) are priorities, then Wealthfront is likely to be higher in a position to serve your wants. Different issues that may sway you to at least one robo-advisor or the opposite are particular options in a money administration account or entry to a portfolio line of credit score.