Betterment Vs. Wealthfront: Which Is Best For You?

A robo-advisor supplies automated portfolio administration for buyers, deciding on investments for you utilizing an algorithm primarily based in your threat tolerance and if you want the cash.

Betterment and Wealthfront are two of the highest robo-advisors in a crowded area 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 inexpensive value. Plus, they’ve frequently added providers that transcend what you’d count on from a standalone robo-advisor.

Each Betterment and Wealthfront scored prime marks in Bankrate’s newest evaluations (with Betterment taking the highest honors for greatest robo-advisor general in 2025). These robos have rather a lot in widespread, however it’s the variations — which we dive into beneath — that can show you how to resolve which supplier greatest meets your monetary wants.

Our take

High robo-advisors use low-cost exchange-traded funds to construct your portfolio after which add on a heap of value-added options comparable to 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 examine face to face in 5 key classes.

Portfolio administration

Edge: It’s a detailed name, however Wealthfront wins out on this class if you would like the power to incorporate a big selection of funding decisions in your portfolio past what robo-advisors sometimes provide.

Should you’re searching 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 possibility.

In lots of respects, Betterment and Wealthfront look comparable by way of managing your portfolio. Each provide refined portfolio administration and tax methods that may cut back the web value of the service (extra beneath). Every additionally permits you to achieve publicity to cryptocurrency, too, when you’re all in favour of that. 

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

Betterment portfolio administration

Betterment constructs a portfolio primarily based on 13 asset lessons, and permits you to set a number of objectives and save for them individually. You’ll have entry to a sensible beta fund, which weights varied elements to attempt to beat the market return, in addition to socially accountable investments. You’ll be able to 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 operate with out human advisors, a key differentiator is Betterment’s possibility to talk with certified human advisors — a pleasant characteristic for occasions 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 tons of of ETFs and make investments for a number of objectives. Should you’re trying so as to add a particular ETF to your portfolio, Wealthfront provides you an absolute ton of decisions and allows you to tinker along with your allocations, providing you extra freedom.

Revenue buyers 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 good 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 just lately, the agency added direct indexing as an possibility, 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 good characteristic, supplying you with entry to a low-cost mortgage at virtually any level.

Wealthfront and Betterment are shut relating to the money administration accounts they provide. In reality, they’re a number of the greatest within the trade and pay curiosity, in contrast to many accounts. Each provide accounts that usually ratchet up (or down) charges because the prevailing fee shifts, making them a fantastic place to stash your money when charges are excessive.

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

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

• Early direct deposit: Wealthfront affords early direct deposit in your payroll test, 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 permits you to borrow as much as 30 p.c in opposition to your automated investing account (if it’s above $25,000) at a low fee. You’ll be able to have the cash in hours. Betterment doesn’t provide this characteristic.

Wealthfront affords a greater suite of options, with early direct deposit and a portfolio line of credit score, permitting you rapid 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 supplied by each, however money is turning into much less obligatory daily. 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 buyers when evaluating the core portfolio administration providers and expense ratios on investments.

Betterment and Wealthfront are neck and neck relating to 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 p.c of property yearly for his or her core portfolio administration providers, which interprets right into a $25 price for each $10,000 invested.

Betterment has further price tiers primarily based on account steadiness:

• Digital plan: The 0.25 annual price applies to prospects with $20,000 or extra throughout all accounts. These with much less are charged a $4 month-to-month price as an alternative. Betterment waives the month-to-month price when you arrange a $250 or extra month-to-month recurring deposit.
• Premium plan: This second tier of service steps up the worth to 0.65 p.c of property (with at the least $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 outdoors of Betterment accounts.
• Low cost for high-dollar portfolios: Rich buyers in both plan earn a administration price low cost of 0.1 p.c on the portion of their portfolio that exceeds $2 million. That brings the digital plan administration price to 0.15 p.c and the premium plan to 0.55 p.c.

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

Wealthfront is correct there, with a median portfolio costing about 0.08 p.c. Both manner, 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 relies on your particular person wants and preferences.

Tax technique

Edge: With potential greater returns and direct indexing, Wealthfront comes out forward on this class, however Betterment affords a stable characteristic set, too.

A robo-advisor may add worth by its tax technique, which is a vital consideration for buyers with cash invested outdoors of tax-advantaged retirement accounts. Robo-advisors are ideally located to carry out tax-loss harvesting, with the power to do trades that may be onerous for a human advisor. Tax-loss harvesting means promoting losers to take a tax loss that may offset good points.

Betterment tax technique

Betterment makes use of day by day tax-loss harvesting to attempt to maximize your good points. Usually, they’ll promote one fund after which exchange it with one other that has many comparable options. You’ll have entry to this service with any stage of property you deliver to the accounts.

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

Wealthfront tax technique

Wealthfront additionally makes use of day by day tax-loss harvesting, however it takes it to the following stage. 

When you have got greater than $100,000, Wealthfront can begin utilizing direct indexing, supplying you with extra alternatives to understand financial savings. So quite 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 targeted solely on that index’s holdings is offered at a decrease $20,000 funding minimal.)

Wealthfront says its tax-loss harvesting program can recoup its administration price for 97 p.c of its purchasers. The robo-advisor says that purchasers in riskier portfolios (that’s, stock-heavy) have seen an estimated after-tax advantage of six to 13 occasions the advisory price.

Options and instruments

Edge: Wealthfront. Its wonderful planning instrument (which is absolutely a number of instruments in a single) and helpful Self-Driving Cash characteristic examine effectively in opposition to Betterment’s helpful (however extra narrowly targeted) instruments.

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

Apart from these already talked about, Betterment’s instruments embody:

• 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 affords recommendations on how one can optimize your portfolio to fulfill your retirement wants
• Aim-based saving instrument, which helps you set completely different objectives and save for them. It additionally permits you to rank your objectives by way of precedence.

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

• 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’ll be able to challenge your internet price 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 of use the instrument to plan for faculty and open a 529 faculty financial savings plan with Wealthfront or hyperlink an out of doors plan. You’ll be able to even funds for day without work and see how that impacts your objectives.

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

Who’s Betterment greatest for?

Betterment is right for each new buyers simply beginning out (due to 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 embody:

• 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 greatest for?

Wealthfront’s all-encompassing funding choices (together with particular person shares, bond ladders and direct investing) is a boon to these in search of cash administration that goes effectively past what’s supplied by a typical robo-advisory. Highlights embody:

• 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 comparable, as are the options of their perk-heavy money administration accounts. However whether or not you go together with one or the opposite relies upon rather a lot in your particular person wants. 

For instance, when you want a human advisor and meet the minimal funding requirement for limitless entry, Betterment could also be your reply. If the power to put money into particular person shares (by 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 which 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.