2017 Review: Acorns vs Betterment – How Does Betterment Work? How Does Acorns Work?

Acorns vs. Betterment is a question that more and more people are beginning to ask themselves. When it comes to finances, it is important to know that you are using the right tools – the best tools – to get the right results.

So, to find the best tools and the best results, we need to look more deeply into exactly how both Betterment investing and Acorn work.

Our comparison review will combine an Acorns app review and Betterment app review to provide a thorough comparison of Acorns vs. Betterment.

What Are They?

Both Acorns and Betterment are what is known as “robo-advisors,” or online wealth management systems that don’t require the use of any human input in order to find the right investment.

This is all done through an impressive array of algorithms. So, when it comes to Acorns or Betterment investing, your wealth portfolio is managed automatically.

The question of does Acorns work, just like does Betterment work, is easily answered – yes, it does. But just how good are they?    

a hand of robot on a laptop to show betterment vs acorns

Image Source: BigStock

Why Use A Robo-Advisor?

The main reason for using a robo-advisor to look after your financial wealth portfolio is for ease. Going it alone is possible, but without a great deal of in-depth knowledge it’s unlikely that you will do as well as you would hope, even using Acorns or Betterment competitors.

You would likely lose money. And you might even decide that investing wasn’t for you when, with a simple decision regarding Betterment vs. Acorns, you could actually start (and continue) making money.

So which is better in the robo-advisor wars? Does Acorns work? What are Betterment fees? We will find out more now.

High Level Comparison Table ​

Acorns vs. Betterment

Pricing Per Year


Minimum Balance


0.25% for

$1 per month




by balance


 Table: The above list is sorted alphabetically

Acorns vs. Betterment Review

Promotions and Pricing

In the Acorns vs. Betterment battle, both want to gain specific customers, which leads to some pretty good deals to persuade you to sign up with them.

But even if those deals are great, they may not be right for you. And even if the deals are perfect for you, the service you receive might not be – so it pays to do your research.   

Currently, Acorns states that students can invest for free. But why target students as potential investors when they are notoriously strapped for cash?

Perhaps Acorns is keen to catch potential investors while they’re young; you can be a bit freer in risk-taking before you have too much to lose.

Betterment takes a more democratic approach:  their promotion offers up to six months completely free – for everyone. It’s more inclusive but it is finite – and knowing what the fees will be after that initial six month term is crucial.

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So just what are these fees when it comes to an Acorns and Betterment investment review? Acorns offers a fee of 0.25% a year compared to Betterment’s 0.25% to 0.50% a year. Which is better?

With Acorns you know exactly how much you are going to pay – Acorns fees are flat-rate fees that you can calculate into your budget. Betterment fees are variable, depending on how much money you are investing.

Additionally, Acorns fees only apply for accounts totalling $5,000 or more. When comparing Betterment vs. Acorns, this is a substantial difference.

If you have less than $10,000 to invest, Acorns is the obvious winner, unless you might have more to invest in the future. 

Acorns and Betterment have equal fees (0.25% per year) for investments between $10,000 and $100,000 — but should your investment reach past that $100,000 mark, Betterment’s 0.40% fee might be prohibitive for some.

The right option for you depends on your goals and expectations for your investments over the long-term.

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When it comes to deposits, there is no different between Betterment vs. Acorns; neither have a minimum deposit. For potential investors this is excellent news – so many investment sites have a minimum deposit that is out of range for new investors with small starting capital.

With no minimum deposit, both sites do well in this Betterment investment review and Acorns app review. This allows for more people to join in. It’s a savvy business plan to gain more revenue in the future.

Rebalancing and Harvesting

Both Betterment and Acorns have a system of auto-rebalancing your investment once it gets to a certain level (which you choose). It’s a great tool to have since it takes the risk out of going too far once you’ve reached a pre-determined goal.

Get to the level you’re happy with, then go back to a lower level rather than keep rising – it keeps your risk at a minimum level while increasing your potential to earn more. In the Acorns vs. Betterment review battle, both offer this service – great news.

As for harvesting, only Betterment offers that. Tax loss harvesting is a way of dumping poorly performing investments quickly and easily, before they affect the rest of your portfolio too much.

Having this system in place is a useful safeguard when it comes to saving your hard won cash – and the fact that Betterment offers it and Acorns doesn’t scores one point for the Betterment investment review.

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Apps & Technology

In today’s world, it is all but impossible to run a successful company without creating an app to go along with it, and both Betterment and Acorns are fully aware of that.

The Betterment app and the Acorns app are available on Android and iOS apps. Both apps are fully functional, fully usable, and fully geared toward getting the best out of your investment.

The easier and more intuitive an app is, the more an investor will use it – so sometimes, despite everything else that is up for discussion in the Betterment vs. Acorns debate, the app swings the decision. Better app, more investors — it’s really that simple.

betterment app on a mobile tablet and laptop

Image Source: BigStock

When comparing the two apps, our Acorns app review is much higher than the Betterment app review. It is a good looking app (to go with its good looking website) which has actually won awards for design. Now that’s impressive, and it’s not something that everyone can do.

In some cases, good-looking, nicely designed apps can lack in the functionality department – not so in the case of Acorns. Our Acorns app review found that the app is easy to use, and those pretty colors actually serve a function. 

The coloring allows the investor to immediately see where the problem areas lie, as well as where the profits are coming from.

As an additional benefit, our Acorns app review found that the mobile app received $30 million in funding from PayPal. With impressive support for its mobile app, there’s no denying that the future looks incredibly bright for Acorns. 

The Betterment investing app is a bit plain compared to the peacock tail that is Acorns, but it focuses in on the investment and the investment alone. There are no distractions and sometimes that can be a very good thing indeed.

It’s simple too, and in terms of ease of use, the Betterment app wins over Acorns. There is nothing superfluous here, plus there are explanations on offer regarding each investment or potential sale.

This means that, if you were considering selling, the Betterment app creates a short forecast showing you how likely it is that things will improve (or not).

Having the Betterment investing app means having an extra tool in your belt that will surely come in handy.

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Investment Assistance

It’s all very well downloading an app or logging onto a website and poking around with some spare change in the hopes that something good will come of it, but if you don’t know what you’re doing and no one has told you, you can’t really expect to win anything much.

So which site, Acorns vs. Betterment, gives their customers more help when it comes to getting started?

Acorns offers something a little different in this regard. They say that their portfolios are created with the aid of Nobel laureate Dr. Harry Markowitz, known as the “father of modern portfolio theory.” It’s difficult to get much better advice than that.

The only problem? That’s pretty much where Acorns leaves it. They name drop and walk away, expecting that you’ll be wowed enough to follow. But this is your money, and it’s important to have all the facts.                                                                                                                   

Our Betterment investment review, conversely, found that Betterment offers much more. They might not have Dr. Markowitz, but they do have almost 4,000 words about how they work on their investment selections, and that includes some pretty graphs too.

Here, you can see exactly how they get to their conclusion. It’s all worked out, down to the last decimal place. And, amazingly, they’ve made it interesting too, so potential investors will be quite happy to read it – or at least skim it.     

How Much Do They Handle?

Currently, in an Acorns app review, Acorns has around $74 million of assets under management. That sounds like a lot until you compare it directly to a Betterment investment review of over $5 billion in assets under mangement.  

What does that tell us? It could be that Betterment has a lot more investors as customers than Acorns does (which then opens up a discussion on why that might be).

It could also be that those who invest in Betterment have more money to invest – hence the investments are at a higher level financially. This theory isn’t far off: last year, the highest individual investment was $10 million

This would make sense since it is clear through their promotional offers that Acorns is interested in targeting students (with less capital) and Betterment is happy to focus on a wider spectrum of society.

It’s clearly working for them. It’s worth noting that Betterment is the first robo-adviser to hit the $5 billion mark for assets under management, creating an excellent reputation for the company.


Acorns vs. Betterment can be the hardest decision to make when it comes to investing – and that’s not even including all the Acorns and Betterment competitors out there.

The point of using a robo-advisor is to get a better return and have more chance of winning some money back, even if there are Betterment fees or Acorns fees involved. And if they weren’t so useful, everyone would simply be investing themselves and saving the fees.

But they’re not. Robo-advisors are still being used, and by thousands and thousands of people. So there must be something to it.

Trying to mirror what Acorns vs. Betterment does will take you a lot of time, and cost you money in broker’s fees. The great news about both of these companies is that when you pay into or withdraw from your account, there is no additional fee.

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They’ve already had their money (or will have it) so why charge more? It would only put people off.

The Acorns app and the Betterment app are both great. Acorns has more flash, but Betterment has more gravitas. Acorns feels youth-driven, while Betterment seems like it’s ready for the long haul.

In the end, this is your money. Do your homework: look at an Acorns app review and a Betterment investment review to find the most valuable components of each company.

Whether you choose Betterment or Acorns, your money is in good hands.

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