Betterment vs Wealthfront: Which One Should You Choose?

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Last updated on December 3, 2022

Robo advisor accounts are a great way for time-poor or novice investors to manage the portfolios, they offer tailored advice for far less than traditional advisors, alongside automated portfolio management.

If you’re interested in algorithmic investing, your first question should undoubtedly be: Betterment or Wealthfront? These two companies are the biggest Robo Advisors in the US, offering very similar services, but with some crucial differences.

In this article, we’ll compare Betterment and Wealthfront to help you decide which is right for you.

Betterment vs Wealthfront – Comperison Highlights

Minimum Deposit$0 minimum balance$500 minimum balanceBetterment
Accounts Available
Individual and joint taxable accounts; traditional, Roth, SEP and rollover IRAs; trusts and non-profitsIndividual and joint taxable accounts; traditional, Roth, SEP and rollover IRAs; trusts and 529 plansTie
Tax-loss Harvesting

Portfolios over $100,000 get it on a stock-level basis
Portfolio RebalancingYesYesTie
Dividend Re-investingYesYesTie
PlatformsDesktop, Android, iOS Desktop, Android, iOS Tie
Socially Responsible Investing
SRI Exchange Traded Funds (ETF)NoBetterment
Retirement Planning
Saving Accounts
APY 2.25%APY 4.55% Wealthfront
Checking Accounts

Inc. debit card with rewards program
0.25% digital, 0.4% premium (with human advice)

0.15% digital on balances over $2 million
0.25% digital investing

0.42%-0.46% for 529 plans
Get Up To 1 Year FREEGet $5,000 Managed for Free

Why Choose Betterment?

In general, we’d say Betterment is better for beginners. It offers more advice, has no minimum balances, and some features make it more suited to lower value portfolios. Is Wealthfront good for beginners? Sure. We just think Betterment edges it out for novice investors.

Below we describe the stand-out features that would make us choose Betterment over Wealthfront.

Human finance advice

Betterment‘s Robo advisor comes as standard, but the service also offers human advice if you want it. Access to human advice comes with a minimum portfolio value of $100,000, or you can pay $299-$399 for goal-oriented guidance such as retirement planning or saving for a house.

It’s worth mentioning the Betterment advisory fees are far lower than traditional advisors’, and its performance appears to be in line with industry standards.

Fractional shares

Betterment allows you to invest in fractional shares—meaning you can buy a portion of a share, rather than limiting yourself to whole numbers. The benefit is you don’t need to leave money uninvested, thus boosting Betterment’s average returns.

Socially responsible investing

Another reason to choose Betterment or Wealthfront is the option for socially responsible investing (SRI). By choosing one of Betterment’s SRI Exchange Traded Funds (ETF) your investment will exclude controversial holdings such as oil or weapons, and can favor climate or social impact holdings.

Checking account

A recent addition to Betterment’s services is a no-fee checking account. It operates much the same as any other but comes with smart features that give it  a leg up.

Some of its best features include:

  • No fees (ATM fees and foreign fees are automatically reimbursed)
  • †FDIC-insured up to $250k
  • Visa debit card, along with mobile options such as Apple Pay and Google Pay
  • Earn cash back rewards at thousands of retailers, such as Walmart and Dunkin’

And if that’s not enough, Betterment has plans to introduce joint checking accounts in the near future.

Why Choose Wealthfront?

In the battle of Betterment vs Wealthfront, we’d say the latter offers a better service for more experienced investors or those with larger portfolios. There’s less advice on offer, but more flexibility for those who know what to do with it.

When weighing up Betterment or Wealthfront, it’s the features below that would make us choose the latter.

529 accounts

Wealthfront offers a wider range of investment accounts, including 529 accounts for college savings. This won’t be the most important factor when some people compare the two, but it could be a decisive factor for you.

Individual share investing

Although Wealthfront offers fewer asset classes, it offers overall greater investment flexibility, including the ability to invest in individual shares if you have a balance of over $100,000. It also offers more diversified assets within its ETFs, including natural resources and real estate alongside stocks and bonds.

Stock level tax-loss harvesting

Both Betterment and Wealthfront offer tax-loss harvesting—where losing positions are sold to offset capital gains tax on profitable holdings—but once your portfolio is worth over $100,000, Wealthfront does so on a stock-level basis. This granularity should result in greater tax efficiency, potentially increasing the Wealthfront average return after tax for larger portfolios.

Portfolio line of credit

For those with portfolios over $25,000, Wealthfront offers a line of credit up to the value of 30% of your portfolio. Secured against your investments, there’s no credit check, rates are as low as 2.40%-3.65%, and it can be in your account as soon as a day after you apply.

Investment Strategies and Portfolios

Both Betterment and Wealthfront follow Modern Portfolio Theory (MPT)—allocating investment across assets to deliver an expected return for a certain level of risk. To do this, both take you through a questionnaire when you sign up to determine your investment goals and how much risk you’re comfortable with.

Wealthfront doesn’t allow you to customize the portfolio you’re algorithmically offered, but Betterment does. Both are primarily focused on ETFs, and as your portfolio grows, both offer access to Smart Beta programs that promise potentially higher returns in exchange for higher risk.

If you’ve wondered ‘can I lose money with Betterment?’, the Smart Beta program increases the chances you can. But you could also earn more.

Wealthfront VS Betterment Returns

There’s not a lot between Betterment or Wealthfront here. Wealthfront performance data is more easily available than Betterment performance data, but from what we can tell, Betterment average returns are similar to Wealthfront average returns.

The main difference is that while Betterment offers a wider range of ETFs—including socially responsible funds—Wealthfront offers a broader field of assets.

The difference in available assets—coupled with the ability to invest in individual shares with Wealthfront—makes an apples-to-apples Wealthfront vs Betterment returns comparison difficult, even if more data was available.

Retirement Planning

Again, there’s not a lot to choose between Betterment vs Wealthfront. Both offer excellent retirement planning facilities, wrapping investments in your choice of 401(k), IRA, or simple investment accounts.

Both offer planning tools to help you decide how much to put away—extrapolating future scenarios based on decisions you make now—and facilities for rebalancing your portfolio by reviewing progress against your goals.

When it comes to retirement planning, either one is an excellent choice.

Savings Accounts

Both services started as pure robo advisors, but both have branched out into other services, including cash accounts. Both Betterment fees and Wealthfront fees are admirably low here, offering no-fee transfers and ATM withdrawals.

The choice in Betterment vs Wealthfront savings accounts comes down to the slightly higher Betterment interest—2.25% against Wealthfront’s 4.55%. Though both are variable and may change.

Wealthfront’s killer feature is paying interest up to two days early if you want. Betterment’s is smart spending analysis and guidance, aided by savings ‘buckets’. Otherwise, there’s not much to choose in Betterment vs Wealthfront savings accounts.

Checking Accounts

Betterment also offers a standard checking account, complete with debit card and admirable cash back rewards, which are tailored to your spending.

There are no Betterment fees for using the account. ATM withdrawal fees and foreign transaction fees are reimbursed, and there are no account fees, overdraft fees, or minimum balances.

Wealthfront is a major player in this space, too, as its “Cash Account” offers high-interest checking with no account fees.

Here are some of the many features that allow it to stand out in a crowded space:

  • APY of 4.55%
  • Get paid up to two days early when you opt for direct deposit
  • Pay bills and friends directly from your checking account
  • Easy access to cash with a debit card

And as expected, there are no account fees. This includes no account minimum, no monthly service fee, and no fees at nearly 20,000 ATMs.

Fees and Pricing

Betterment fees and Wealthfront fees are both admirably low, thanks to their shared reliance on a combination of ETFs and auto-investing. The big difference is the Wealthfront minimum balance. But at $500, it’s not much of an obstacle.

Minimum Balance$0 minimum balance$500 minimum balance
Management Fees
0.25% digital, 0.4% premium (with human advice)

0.15% digital on balances over $2 million
0.25% digital investing

0.42%-0.46% for 529 plans
Advisory Fees$299—$399 per session for non-premium usersn/a
Learn MoreLearn More

The other difference is the Betterment advisory fee for human advice. But this is both low, and a service Wealthfront doesn’t offer.

Pros and Cons of Each

Which is better, Wealthfront or Betterment? Let’s look at the pros and cons of each.



  • No minimum balance
  • Socially Responsible ETFs
  • Access to human advisors
  • Fractional share investing


  • Restricted asset classes
  • Human advice comes at a cost



  • Individual share trading
  • Portfolio line of credit
  • 529 accounts
  • Greater asset diversification


  • Best features only accessible above $100,000
  • $500 minimum deposit

Betterment or Wealthfront – Which is Right for You?

When we compare Betterment and Wealthfront, there’s very little to choose between them. Wealthfront may appeal to seasoned investors more, with the additional features unlocked on balances above $100,000.

Is Wealthfront good for beginners as well? Absolutely. In fact, by giving you less control, it’s arguably simpler to use. But we think Betterment edges it by offering more advice, both in its smart spending analysis and in offering access to human advisors. And of course, there’s the Wealthfront minimum balance.

If you’re wondering ‘can I lose money with Betterment?’ the answer is yes, as you can with Wealthfront—or any kind of investing. But both services represent a revolution in consumer-level portfolio management, equipping everyday investors with far more guidance—at a far lower cost—than was possible even a few years ago.

So which is better, Wealthfront or Betterment? They’re as good as each other. It’s just a case of which one suits you more.

Find out more in our Betterment review and Wealthfront review. Or visit Betterment and Wealthfront directly.

Betterment Cash Reserve APY Disclosure - Annual percentage yield (variable) is as of 9/26/2022. Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities.
For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.

Betterment Cash Reserve Disclosure - Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option. Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC's Form ADV Part II. 

ConsumerismCommentary receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. ConsumerismCommentary is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.


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