Betterment Review (2026)
Betterment suits investors who want a goal-based portfolio run for them, with tax-loss harvesting in taxable accounts and no account minimum. The one thing to know: under a $24,000 balance it charges a flat $5 a month unless you set a recurring deposit of $200 or more a month, and since May 2026 managed portfolios hold about 0.5% in cash that earns no interest. Otherwise the fee is 0.25% a year, or 0.65% on Premium, which adds CFP professionals from $100,000.
By Wealthy Pot Editorial · Facts checked October 19, 2026
Facts checked October 19, 2026 against Betterment's own Form ADV brochures, fee pages and fund documents (8 sources, listed below). We re-check prices about once a month. We do not earn a commission from Betterment.
Betterment at a glance
| Advisory fee (Digital) | $5 a month while the balance is under $24,000 and no $200+ monthly recurring deposit is set; otherwise 0.25% a year. The $24,000 test counts Cash Reserve [3] |
|---|---|
| Premium | 0.65% a year on the first $1 million (0.25% Digital plus 0.40% Premium); needs $100,000 in eligible investments per household [1] |
| Large balances | The portion from $1 million to $2 million is billed 0.15%, the portion above $2 million 0.10%, on Digital and Premium [3] |
| Other account fees | HSA 0.50% a year all in (0.25% Betterment plus 0.25% HSA administrator); Solo 401(k) 0.25% plus a $100 yearly platform fee [1] |
| Minimum | No minimum balance; $10 minimum deposit; a portfolio needs $50 before rebalancing trades happen [1] |
| Fund costs | 0.05% to 0.13% a year for the Core portfolio, as Betterment shows it [6] |
| Cash allocation | Since May 2026, taxable, IRA and HSA portfolios target about 0.5% in cash that earns no interest; Betterment receives payments from Program Banks on it [1] |
| Tax-loss harvesting | Optional, taxable accounts, no balance threshold stated; plus Tax Coordination (asset location across account types) [1] |
| Direct indexing | Not offered to retail clients in the brochure [1] |
| Human advice | Premium only: calls and video with CFP professionals, at 0.65% from $100,000 [4] |
| Account types | Individual and trust taxable, traditional, Roth and SEP IRA, HSA, Solo 401(k), Cash Reserve, checking [1] |
| Rebalancing | Deposits and withdrawals first; sell-and-buy rebalancing at about 3% drift (7% for Custom Portfolios and the Crypto ETF portfolio) [1] |
| Cash Reserve APY | 3.50% variable as of September 21, 2026; new clients get a 0.75% boost on up to $1 million through February 15, 2027 [3] |
| Transfer out | $75 per full or partial transfer to another brokerage firm [1] |
| Company and custody | Betterment LLC (CRD 149117), owned by Betterment Holdings, Inc.; Betterment Securities (FINRA, SIPC) carries accounts, Apex Clearing clears; brochure dated July 31, 2026 [2] |
What a year with Betterment costs
| Balance | Advisory fee | Fund expenses | Total a year | As % of balance |
|---|---|---|---|---|
| $5,000 | $60 | $2.50 to $6.50 | $62.50 to $66.50 | 1.25% to 1.33% |
| $25,000 | $62.50 | $12.50 to $32.50 | $75 to $95 | 0.3% to 0.38% |
| $100,000 | $250 | $50 to $130 | $300 to $380 | 0.3% to 0.38% |
Hypothetical, our arithmetic from Betterment's published fee rules and 0.05% to 0.13% a year in fund expenses, as Betterment states them, read on October 19, 2026, assuming the balance stays the same all year. Betterment charges the $5 a month only while the balance is under $24,000 and you have no recurring deposits of $200+ a month; with those deposits the fee is 0.25% at any balance. Fund range is what Betterment shows for its Core portfolio. Since May 2026 managed portfolios hold about 0.5% in cash that earns no interest.
How Betterment works
You answer questions about a goal, such as retirement or a safety net, and Betterment picks a stock and bond mix and runs it. Portfolio choices include Core, Value Tilt, Innovative Technology, three impact portfolios, a BlackRock Target Income portfolio, two Goldman Sachs portfolios, a Crypto ETF portfolio and Cash Reserve. Since July 31, 2026 you can also build a Betterment-managed Custom Portfolio of chosen ETFs and single stocks. New money goes to the holdings that are under target, and Betterment sells and buys only when a portfolio drifts about 3% from its mix. Commission-free self-directed trading sits alongside and carries no wrap fee. To weigh a managed mix against owning funds yourself, see our ETF vs index fund guide.
Tax-loss harvesting means selling a holding at a loss and buying a similar one, so the loss can offset gains on your tax return. Betterment offers it as an option on taxable accounts and states no balance threshold. Whether it saves you anything depends on your gains, your tax bracket and future sales; see our capital gains tax guide. In April 2023 the SEC fined Betterment $9 million over undisclosed changes and coding errors in this feature from 2016 to 2019, covered under Security below.
The cost that is easy to miss is cash. Since May 2026 Betterment keeps about 0.5% of taxable, IRA and HSA portfolios in cash. That cash earns you no interest, Betterment receives payments from its Program Banks on it, and only money in Cash Reserve earns interest. The advisory fee is not charged on cash in the sweep program. Leaving also has a price: Betterment Securities charges $75 for each full or partial transfer to another firm.
A hypothetical $10,000 balance shows the $5 rule at work. With no recurring deposit, the fee is $5 x 12 = $60 a year, or 0.60% of the balance. Set up a $200 monthly recurring deposit and the fee switches to 0.25%, which is $25 a year on an average balance of $10,000, plus fund costs. The 90-day fee waiver Betterment offers under its Satisfaction Guarantee is not available on the $5 plan.
Pros
- No minimum balance and a $10 first deposit
- Optional tax-loss harvesting and Tax Coordination, with no balance threshold stated
- 0.25% at any balance with a $200+ monthly recurring deposit
- CFP professionals on Premium from $100,000
- Lower rates on balances above $1 million (0.15%, then 0.10%)
Cons
- $5 a month under $24,000 without a $200 recurring deposit, 0.60% of a $10,000 balance
- About 0.5% of managed portfolios held in cash that earns no interest
- $75 per transfer to another brokerage firm
- Human advice only on Premium, at 0.65% with a $100,000 minimum
- HSA costs 0.50% a year all in
Who Betterment fits, and who should skip it
A good fit if
- You invest every month and can set a recurring deposit of $200 or more, so the 0.25% fee applies at any balance.
- You hold a taxable account and want optional tax-loss harvesting with no stated balance threshold.
- You have $100,000 or more and want calls with CFP professionals for 0.65% a year.
- You want an HSA or Solo 401(k) managed in the same place as your IRA.
Look elsewhere if
- You have under $24,000 and no $200 monthly deposit: Fidelity Go charges $0 in advisory fees under $25,000.
- You want direct indexing: Wealthfront offers US direct indexing from $100,000.
- You expect to move the account later: Betterment charges $75 per transfer out, and Wealthfront lists no transfer fees.
Limitations to know
- The $5 monthly fee applies while the balance is under $24,000 and no recurring deposit of $200 or more a month is set; on very small balances it is a large share of the account. [3]
- The roughly 0.5% cash target in taxable, IRA and HSA portfolios earns no interest; only Cash Reserve balances do. [1]
- Rebalancing trades only happen once a portfolio holds $50. [7]
- Premium needs $100,000 in eligible investments per household; Cash Reserve, self-directed investing, checking and 401(k) plans at work do not count. [3]
- The Core fund cost range comes from Betterment's own portfolio page; Betterment does not list a weighted expense ratio for every portfolio there. [6]
Betterment compared with alternatives
| Robo | Advisory fee | Minimum | Tax-loss harvesting | Year cost on $25,000 |
|---|---|---|---|---|
| Betterment | $5/mo under $24k (unless $200+/mo deposits), else 0.25%/yr; Premium 0.65% | $0 ($10 first deposit) | Yes | $75 to $95 |
| Fidelity Go | $0 under $25k, then 0.35%/yr on the whole balance | $0 ($10 to start investing) | Yes | $87.50 |
| Wealthfront | 0.25%/yr (Bond Ladder 0.15%, S&P 500 Direct 0.09%) | $500 | Yes | $62.50 + funds |
| Vanguard Digital Advisor | 0.20%/yr index or 0.25% active (gross; less after fund credits); first 90 days free | $100 | Yes | $57.50 to $67.50 |
- Pick Fidelity Go if your balance is under $25,000 and you want $0 in advisory fees.
- Pick Wealthfront if you want 0.25% with no flat fee, no transfer fees and US direct indexing from $100,000.
- Pick Vanguard Digital Advisor if you want Vanguard index ETFs from $100 at no more than $20 per $10,000 in net advisory fees.
Security and privacy
- Betterment Securities, the carrying broker, is a FINRA member and a member of SIPC; Apex Clearing is the clearing broker. SIPC covers securities if a broker fails, not market losses. [1]
- Cash in the sweep program sits at Program Banks with FDIC coverage of up to $4 million for individual and $8 million for joint accounts, Betterment says. [5]
- IRAs are held with Inspira Financial Trust as custodian, and HSAs through Optum Bank. [1]
- On April 18, 2023 the SEC censured Betterment LLC and ordered a $9 million civil penalty, to be distributed to affected clients. The SEC said Betterment did not disclose changes and coding errors in its tax-loss harvesting from 2016 to 2019, which cost more than 25,000 client accounts about $4 million in potential tax benefits. [8]
- The 2023 SEC order is the only disciplinary event in Betterment's brochure. [1]
Recent changes
| Date | What changed |
|---|---|
| Jul 31, 2026 | Betterment-managed Custom Portfolios of chosen ETFs and single stocks added for retail clients. [1] |
| Jun 30, 2026 | Optional Fully Paid Securities Lending added. [1] |
| May 1, 2026 | Cash moved into one Cash Sweep Program; managed portfolios began holding about 0.5% in cash that earns no interest. [1] |
| Nov 20, 2024 | $50 portfolio minimum set for rebalancing trades. [7] |
Betterment FAQ
How much does Betterment cost?
Digital costs $5 a month while your balance is under $24,000 and you have no recurring deposit of $200 or more a month; otherwise 0.25% a year. Premium is 0.65% on the first $1 million. Fund costs for the Core portfolio run 0.05% to 0.13%, and transfers out cost $75.
Is Betterment safe?
Betterment LLC is an SEC-registered adviser (CRD 149117). Accounts are carried by Betterment Securities, a FINRA and SIPC member, with Apex Clearing as clearing broker. The SEC fined Betterment $9 million in April 2023 over its tax-loss harvesting disclosures, with the money going to affected clients. SIPC does not cover market losses.
Does Betterment do tax-loss harvesting?
Yes, as an option on taxable accounts, with no balance threshold stated. It does not apply in IRAs, where gains and losses are not taxed each year. Any tax benefit depends on your own situation.
What is the minimum for Betterment?
There is no minimum balance and the minimum deposit is $10. Rebalancing starts once a portfolio holds $50, and Premium needs $100,000 in eligible investments.
Betterment vs Wealthfront?
Both charge 0.25% a year on their main portfolio. Betterment has no minimum but charges $5 a month under $24,000 without a $200 monthly deposit, charges $75 per transfer out, and offers CFP professionals on Premium. <a href="/robo-advisors/wealthfront/">Wealthfront</a> needs $500, lists no transfer fees, has no human advisors and adds US direct indexing at $100,000.
Is Betterment worth it?
At $25,000 the advisory fee is $62.50 a year and Core fund costs add $12.50 to $32.50, per the cost table above. Below $24,000 without a $200 monthly deposit it is $60 a year whatever the balance. Compare that with <a href="/robo-advisors/fidelity-go/">Fidelity Go</a> at $0 under $25,000, or owning index funds yourself at a broker.
How we researched this review
We did not get paid or receive a free account for this page. We read Betterment's own pricing page, help center, security and privacy pages and app-store listing on October 19, 2026, quoted each fact from those pages, and link every one below. We did not run a long-term hands-on test, so we do not score the app; where a point rests on what the company says rather than something we can check, we attribute it to Betterment. Cost figures are our own arithmetic. We re-check prices and plans about once a month and log changes in the table above.
Sources
- Betterment LLC, Form ADV Part 2A and Wrap Fee Program Appendix (July 31, 2026), checked October 19, 2026.
- SEC Investment Adviser Public Disclosure, Betterment LLC (CRD 149117), checked October 19, 2026.
- Betterment, Pricing, checked October 19, 2026.
- Betterment, Premium, checked October 19, 2026.
- Betterment, Investments, checked October 19, 2026.
- Betterment, Core portfolio, checked October 19, 2026.
- Betterment, Portfolio minimum for rebalancing, checked October 19, 2026.
- SEC press release 2023-80, Betterment to pay $9 million over tax-loss harvesting disclosures, checked October 19, 2026.
Head-to-head comparisons
- Betterment vs Wealthfront
- Betterment vs Fidelity Go
- Betterment vs SoFi Automated Investing
- Betterment vs M1
This review is general information, not investment advice. Investing involves risk, including loss of principal; past performance does not predict future results. Fees change; check the firm's Form ADV brochure and pricing page before you enroll.