Acorns Vs Betterment

Acorns Vs Betterment [Which Investing App is Better? 2021]

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Acorns Vs Betterment

Making a decision to start investing is one of the best decisions that you can make for your future self. If you’re ready to do so, Acorns and Betterment are two apps that will enable you to invest on their platform. Both of these apps offer excellent features that will benefit you in different ways. As an investor, it is up to you to decide if either of these two or both of these apps are going to be an asset to your investment life. Let’s take a close look at both of these great platforms, so you can figure out which one is the best fit for you. 

Let’s get started with our Acorns Vs Betterment review!

Features of Acorns

Acorns is an app that works in line with the robo-advisor model. This means that the asset allocation plan is taken care of for you, all you have to do is put your money in and choose the type of portfolio that you’d like to work with. This is a great feature for someone who is not looking to do a lot of research in order to invest. It is, of course, always a good idea to understand where your money is going so research is always going to be necessary. However, with Acorns, there is going to be less research required than you would need with Robinhood

Investing with Acorns has become very popular due to their most notable feature. This would be the automatic investments of spare change. Acorns have a feature that makes it so every time you swipe your debit card the purchase is rounded up to the nearest dollar and that additional change is put into your investment portfolio.

For example, if you were to purchase a sandwich for $4.50, Acorns would round that purchase up to $5 and then invest the additional $0.50 into your account. This is something that if done consistently over time can grow to be a significant mass of money. 

Acorns are more of a long-term investment portfolio. It is best to put some money into this account every month and wait a decade or so to take the money out, the longer the better. This allows for the money to grow and compound on top of it, leaving you with a sizable return on your investment. 

RELATED: Acorns Vs Stash

Types of Portfolios

As mentioned above, Acorns offers different kinds of portfolios that you can choose from. These are based on your risk tolerance and can be changed at any time. With that being said, here are all of the portfolio options that are offered by Acorns. 

  • Aggressive: This portfolio is meant for someone who is willing to deal with some volatility in their portfolio with potential at higher gains. In this portfolio, your investments will be diversified by the following percentages.
    • 55% Large Company Stocks
    • 10% Medium Company Stocks
    • 5% Small Company Stocks
    • 30% International Company Stocks
  • Moderately Aggressive: There is also a higher threshold of volatility in this portfolio so you are going to want to make sure that you can take on a higher level of risk. In the moderately aggressive portfolio, your investments will be spread out with the following allocation. 
    • 47% Large Company Stocks
    • 6% Medium Company Stocks
    • 3% Small Company Stocks
    • 24% International Company Stocks
    • 6% Short Term USD Bond
    • 14% US Aggregate Bond
  • Moderate: With a moderate portfolio, your investments will start to become more conservative. Almost half of this portfolio is tied up in company stocks which means that there is certainly still a risk, just not as much. The allocation of this plan is as follows. 
    • 35% Large Company Stocks
    • 5% Medium Company Stocks
    • 2% Small Company Stocks
    • 18% International Company Stocks
    • 12% Short Term USD Bond
    • 28% US Aggregate Bond
  • Moderately Conservative: In the moderately conservative portfolio, you are going to be gearing more towards bonds as opposed to stocks. There is a significantly lower risk assessment with bonds so this is great for someone who cannot afford much risk. This portfolio is broken down with the following percentages. 
    • 24% Large Company Stocks
    • 4% Medium Company Stocks
    • 12% International Company Stocks
    • 18% Short Term USD Bond
    • 42% US Aggregate Bond
  • Conservative: With a conservative portfolio, you are taking on as little risk as possible. This will bring on less capital gain in the long run but there is almost no chance of losing your money with this portfolio. The conservative portfolio is broken down with the following percentages. 
    • 20% Ultrashort Term Government Bonds
    • 20% Ultrashort Term Corporate Bonds
    • 20% Ultrashort Term Corporate Bonds
    • 20% Short Term Government Bonds
    • 20% Short Term Government Bonds

Understanding the different ways of investing with this platform is very important when going into a robo-advisor investing app. When debating on which of these you would like to go with, it is important to assess your risk tolerance. The truth of the matter is that stocks have the ability to drop in value, though, at the same time they carry far more upside potential than a bond does. If you have a high-risk tolerance, then you are going to want to go with either the aggressive or moderately aggressive portfolio. 

All in all, making sure that you understand where you are investing your money is a very important part of getting into investing. Luckily, you do not have to do intensive research on dozens of stocks in order to determine which ones you want. The robo-advisor does that part for you. 

More on Acorns Vs Betterment below.

RELATED: Stash Investing Review.

Which Is Better Acorns Or Betterment?

Fees With Acorns

Since Acorns is a robo-advising investment app, there are fees that need to be paid in order to work with the platform. This is understandable because they are providing a significant service for you. The fees aren’t necessarily exorbitant but depending on your portfolio size it may be a sizeable percentage. 

To invest with Acorns, you are going to expect to pay anywhere from $1-$5 per month depending on what kind of plan you pick. This is a small price to pay for the returns that you are likely to see if you are sticking to Acorns for the long term. If you think of it this way, you’re probably spending triple that amount on Netflix every month, so it is certainly worthwhile to spend a few bucks a month on your future. The downside is, if you have an account that is only at $100 then $5 is 5% of your portfolio.

RELATED: Stockpile Investing Review. 

Pros of Acorns

Acorns is a trusted app that has been getting more and more attention as it continues to offer more benefits to users. Here are some of the highlights of working with Acorns. 

  • Low minimum balance: You only need $5 to get started with Acorns.
  • Easy way to invest your money: You are able to invest in a hands-off portfolio on this platform; all you have to do is put the money in. 
  • Educational content: Acorns regularly posts articles to their website that seek to educate readers. 

Cons of Acorns

As with any company, there is always going to be room for improvement in some areas. Here are a couple of the things that Acorns could work on.

  • Only robo-advised: It would be nice to see Acorns allow investors to dive into creating their own individual portfolios. As of right now, they only allow for robo-advised investing. 
  • Relatively high fees for small accounts: If you have a small account, then you are going to have a high percentage of your overall portfolio go towards fees. If you have a $100 portfolio then you are going to be spending 12% of your overall portfolio on fees. There is, however, a silver lining to this as it benefits those who have large portfolios. If you have $10,000 in Acorns, then you will only be spending $0.12% on fees.

Check Out Acorns

Take a look at the Acorns website to see if they will be a good fit for your needs.

Features of Betterment

Is Betterment better than Acorns? Betterment is another robo-advising app that has soared to becoming among the top robo advising apps in the industry. There are ultimately two ways in which you can work with this app. First, you can opt for their Betterment Digital plan. This does not have an account minimum and charges a fee of 0.25% of assets under management. If you choose to go with the Betterment Premium plan, then you are going to need $100,000 in the portfolio. This will bring you more benefits than the other plan and comes with a fee of 0.40%

If you are looking to work with your investments in a hands-off way, then Betterment is an excellent option for you. Something that is very interesting about this app is that it will automatically rebalance your portfolio periodically, this is something that is not offered by most robo-advising apps. 

RELATED: Robinhood Investing Review.

Customization

When you are working with Betterment, you are going to have your money invested in thirteen different asset classes. This makes Betterment among the most diverse robo-advising models for you to use. Diversification is something that all traders enjoy because it assists in the lowering of the risk that you are taking on. 

Just like Acorns, Betterment offers different asset allocation plans for people with varying risk tolerances. While they do not have the exact numbers posted, it is a very similar setup to Acorns where it ranges from aggressive to conservative portfolio options. 

Something that makes Betterment stand out among other investment apps is the fact that they offer impact investing. This is something that has been growing in popularity among younger people because it gives the incentive that your money is working in order to benefit society. One of the most notable ways to use impact investing is with the climate portfolio, which ultimately makes it so you are investing in companies that are going to keep the world clean. Overall, you are able to invest in movements that you believe in while still having your chances at making profitable investments. 

More of our Acorns Vs Betterment overview is below.

Pros of Betterment

Betterment has been proven to be a trusted app in this industry. There have been many investors who have seen the benefits that come with working with Betterment. With that being said, take a look at some of the pros of investing with Betterment. 

  • Excellent customization options
  • Low fees
  • Fractional shares

RELATED: Wealthfront Investing Review.

Cons of Betterment

While this is an excellent app that has shown a mass of benefits to the investors, there are always going to be some areas where every company falls short. Below you will find the areas where Betterment could improve. 

  • No direct indexing
  • $100,000 minimum for the premium plan
  • Safety net strategy

Check Out Betterment

Take a peek at the Betterment website to see if the platform is a good fit for your needs.

Is Betterment Better Than Acorns?

Which App is Better? 

Acorns Vs Betterment – which app is better? These are two different robo-investing apps that are both capable of showing you excellent benefits over the years. Though, as an investor, it is up to you to decide which one is going to be a better option for you. One thing that you certainly need to take inventory of is what your specific goals are. If you can have that laid out, then it will be much easier to make this decision. 

So, which is better Acorns or Betterment? At the end of the day, you can’t go wrong with either of these two apps. It really comes down to what your personal preference is. Both of these apps are consistent with providing their investors with returns, it is just a matter of where the money is being invested. 

RELATED: Public App Investing Review.

Parting Thoughts: Acorns Vs Betterment

If you are looking to invest your money towards your future goals, then you absolutely want to consider one of these two investment apps. They are both highly trusted and have provided many benefits to new as well as seasoned investors. There are certainly some differences between these two apps, but the foundation is based on the robo-investing method. With this method, you will be able to invest your money hands-free, so you do not have to worry about trying to make the right investment options. 

Overall, you can’t go wrong with either of these two apps. They have both proven their value in the marketplace and are showing signs of bright days ahead. If you can get into either of these apps as soon as possible then you will be setting yourself up for an excellent financial future. 

Thanks for reading our Acorns Vs Betterment article.

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