Betterment vs Wealthfront 2024

Jeremy Biberdorf
By: Jeremy Biberdorf
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Betterment vs Wealthfront

Betterment and Wealthfront are two giants in the robo-advisor field. Both were founded in the wake of the financial crisis of 2008, and both offer automated portfolio investing based on modern portfolio theory. Read on to see how Betterment vs Wealthfront stacks up.

Betterment is Better for:Wealthfront is Better for:
Pre-built portfolio choicesCustomization by ETF
Passive investors who want to make broad choicesMore active investors who want to choose individual ETFs
Non-education account varietySaving for education
Access to human advisorsBuying specific crypto UITs
No Account MinimumsLoans on investment balances
High-balance management fee discountsMore investment options for high balance accounts

Betterment and Wealthfront have similar product offerings with subtle differences. But which one is better for you?

Let’s look at some comparisons:

betterment wealthfront
Management Fees (AUM)

0.25% (0.15% for balances > $2 million)

0.25% (0.42-0.46% for 529 accounts)

Premium Subscription

0.40% AUM (0.30% for balances > 2 million)

Enhanced services available for balances above $100,000/$500,000

Other Fees



Security Types

ETFs, bonds

ETFs, bonds, mutual funds

Active or Passive


Can actively choose specific ETFs

Education Plan?


529 Plan

Investment Advice from Traditional Advisors?

Yes, with a Premium subscription or by paying $199/$299


Minimum Opening Balance

$0 ($10 for high-yield cash)


Tax-Loss Harvesting



Supported Accounts

Traditional, Roth, SEP, Inherited IRA Individual taxable accounts

Joint taxable accounts with rights of survivorship

Trust accounts

Cash reserve

Checking Account

Traditional, Roth, SEP IRA Individual taxable accounts

Joint taxable accounts with rights of survivorship

Trust accounts

High-interest cash accounts

Earned APY on Cash Accounts

(0.10% on cash reserve)

(0.10% on high yield cash)

Crypto Investing

Yes, expert-managed crypto portfolios

Yes, Bitcoin and Ethereum

Best Use

Passive investors who want to choose by portfolio type

More active investors who want to choose by ETF type

Current Promotion

More Info

More Info

Modest Money Overall Rating
4.5 rating based on 5 ratings
4.0 rating based on 5 ratings

Betterment vs Wealthfront: Determining Factors?

In Modest Money’s analysis, Betterment (4.5 stars) is more suitable for most investors than Wealthfront (4.0 stars). While Betterment and Wealthfront are similar in their structure and products, Betterment has a wider variety of pre-built portfolios, no account minimums, and you can get access to a human advisor.

Wealthfront does have some advantages over Betterment when it comes to education accounts and the ability to add specific ETFs to your portfolio.

Factor 1: Management Fees

As two of the oldest robo-advisors on the books, it isn’t surprising that Betterment and Wealthfront have similar profit models. Both rely on management fees as their primary revenue source, and both charge a management fee of 0.25% of assets under management (AUM).

Betterment Tops Wealthfront in Management Fees

  • Betterment charges a 0.25% management fee.
  • Wealthfront charges a 0.25% management fee.
  • Betterment discounts management fees to 0.15% for balances over $2 million

The relatively cheap management fees of both Betterment and Wealthfront highlight a key advantage robo-advisors have over traditionally managed accounts, which typically charge fees around 1% AUM.

Betterment and Wealthfront would appear to be equal in terms of management fees except for one thing: Betterment discounts management fees on balances over $2 million down to 0.15%. This would save some investors at least $2,000 in management fees annually over Wealthfront. You can open a Betterment account by clicking here.

Both Betterment and Wealthfront are transparent when it comes to their fees. Neither robo-advisor will charge you a “back-door” fee for closing accounts or transferring money, a key advantage both have over many other robo-advisors and many traditional managers as well.

You can open a Wealthfront account by clicking here.

Factor 2: High Balance Services

Both Betterment and Wealthfront offer enhanced services for accounts with higher balances. These services are different, so let’s look at which one is likely to bring a higher value to you.

Betterment Tops Wealthfront for High Balance Services

  • Betterment offers high balance customers access to human advisors in exchange for a slightly higher management fee
  • Wealthfront offers extra portfolio options for high balance accounts at no additional cost
  • Betterment’s access to financial planners will have a more positive impact on most investors than Wealthfront’s additional portfolio options

Betterment High Balance Services

Investors with at least $100,000 under management with Betterment have access to a Premium subscription. In exchange for paying a higher management fee of 0.40%, you will have unlimited access to human advisors. For balances over $2 million, the cost of this extra service falls to 0.30%.

Betterment’s premium advice plan is worth its cost. For balances of $100,000, you would pay $250 for unlimited access to a Certified Financial Planner (CFP).

The best part is that Betterment’s CFP program is not limited to its high-balance customers. Investors with less than $100,000 AUM can purchase CFP packages starting at $199.

Wealthfront High Balance Services

Wealthfront doesn’t charge a premium for this, but if you have more than $100,000 under management with them, you will gain access to its Risk Parity Fund and US Direct Indexing. To add these to your account, you need to manually enable these options on your portfolio after being notified of your eligibility.

Smart Beta is an additional investment feature available to accounts with balances over $500,000. If you have US Direct Indexing enabled on your account, you will be enrolled in Smart Beta once your AUM reaches the minimum threshold.

These additional investments allow for increased income potential and tax advantages for ultra-high net worth accounts.

Betterment Beats Wealthfront in High Balance Services

Modest Money prefers Betterment’s approach to high-balance services. Having unlimited access to a CFP for an additional management fee that can be as low as $250 is a better value for most people with high-balance accounts.

Having access to additional financial instruments, including Wealthfront’s proprietary mutual fund, is a nice bonus for some investors. However, the ability to buy into this mutual fund is not as attractive as CFP access.

Factor 3: Education Plans

You can use any investment account to save for your children’s education. Between Betterment and Wealthfront, only Wealthfront allows you to create a tax-advantaged 529 plan.

Wealthfront Tops Betterment for Education Plans

  • Betterment does not have a tax-advantaged education plan
  • Wealthfront has 529 education plans.
  • Wealthfront’s 529 plan offers tax advantages that could save investors tens of thousands of dollars

Betterment’s Education Options

You can open a taxable investment account with Betterment to help you save for education. You can realize a sizeable gain from Betterment’s automated portfolio investing, but you cannot realize tax advantages.

Betterment does not offer any tax-advantaged education accounts, including 529 plans or custodial minor UTMA/UGMA accounts.

Wealthfront’s Education Options

With Wealthfront, you can open a tax-advantaged 529 plan. 529 plans are a great way to save for education because the money in this type of investment account grows without being taxed.

Wealthfront estimates that with their tax-advantaged 529 plan, an initial contribution of $50,000 could be worth $102,722 after 18 years, as opposed to $85,464 with a traditional taxable investment account. This is a tax advantage of $17,258 in favor of the 529 plan.

You don’t owe taxes upon withdrawal either, as long as the 529 plan is used for qualifying education expenses, including tuition, books, computers, fees, and room and board. If you end up using these funds for any other purpose, you will owe taxes and penalties.

Wealthfront Beats Betterment in Education Plans

Wealthfront’s 529 plan is a superior option to Betterment’s ordinary taxable investment account when it comes to saving for education.

Factor 4: Ability to Invest in Crypto

Cryptocurrency is swiftly becoming another way of diversifying your portfolio. Until recently, most robo-advisors did not provide options for investors to add crypto to their portfolios.

Betterment Tops Wealthfront in Crypto Options

  • With Betterment’s acquisition of Makara, you can get exposure to over 50 crypto and crypto-related assets
  • Wealthfront’s UITs can give you exposure to Bitcoin and Ethereum
  • Betterment can add more diversified and well-hedged crypto assets to your portfolio

Betterment Crypto Options

Betterment’s foray into the world of cryptocurrency investing is a new development. They announced the acquisition of Makara on February 8, 2022. Starting in the second quarter of 2022, they will offer their customers the ability to invest in diversified crypto portfolios.

These crypto investment portfolios will function like Betterment’s other automated investment accounts. Makara offers over 50 crypto and crypto-related investments, which can be added to your Betterment crypto portfolio.

Wealthfront Crypto Options

With Wealthfront, you can add crypto to your portfolio in the form of Grayscale Bitcoin Trust and the Grayscale Ethereum Trust. Both are Unit Investment Trusts (UIT), which allow you to take a position in crypto without exchanging cash into crypto.

UITs work like exchange-traded funds (ETFs), except they are based on crypto instead of stocks. You can allocate part of your Wealthfront portfolio to crypto in the “Add Investments” section of your account. No more than 10% of your Wealthfront portfolio value can be allocated to crypto.

Factor 5: Investment Portfolios

Betterment Tops Wealthfront in Investment Portfolios

  • Betterment offers 9 pre-built portfolios with the ability to customize broad asset categories
  • Wealthfront offers 2 pre-built portfolios but the ability to customize down to the specific ETFs
  • Betterment’s 9 portfolios offer more pre-built options than Wealthfront. For most investors, customizing broad asset categories is preferable to ETF-level customizations

Betterment Investment Portfolios

Betterment specializes in optimized portfolios. Your default portfolio will be built according to your risk tolerance, which Betterment gauges based on your answers to its questions about your investment goals and when you plan on retiring. This default portfolio is known as Betterment Core. You can click here to learn more about which ETFs Betterment uses in its portfolios.

If you are looking for more options, you can also invest in Betterment’s Smart Beta, Innovative Technologies, or even Socially Responsible portfolios in the form of Broad Impact, Climate Impact, or Social Impact portfolios.

Betterment also has two ultra-low risk options, Betterment Cash and BlackRock Target Impact, a bond-only strategy that avoids stocks altogether. With Flexible Portfolio, you can further customize the percentages allocated to each asset category with any of these options.

Betterment’s flexibility only extends to asset categories and not individual ETFs.

You can also take advantage of tax-loss harvesting and dividend reinvestment with Betterment. More about these features are explained here.

Wealthfront Investment Portfolios

As with Betterment, you can let your investment account default to Wealthfront’s Classic Portfolio. You can also choose a Socially Responsible Portfolio. For clients with accounts under $100,000, these are the only two pre-built portfolio options.

Within either category, however, you can fully customize your portfolio to invest in 239 ETFs across 17 asset classes and 2 cryptocurrency trusts.

Wealthfront also offers tax-loss harvesting.

Betterment’s Investment Portfolios Beat Wealthfront

Wealthfront’s ability to customize down to the ETF level is unnecessary for many investors, who appreciate the ease and optimization of robo-advised portfolios.

Most investors would benefit more from being able to choose among Betterment’s nine portfolio strategies, customizing percentages allocated to asset classes when necessary. This helps investors stay well-diversified and without having to individually research 239 ETFs.

Factor 6: Non-Education Account Type Variety

According to their investment goals, people might open different types of accounts according to the tax advantages of each of these accounts. With its 529 plan account, Wealthfront has an edge of Betterment in terms of education account availability. But what about other account types?

Betterment Tops Wealthfront in Non-Education Account Type Variety

  • Betterment has a wider variety of retirement and taxable investment accounts
  • Wealthfront’s non-educational accounts are more limited
  • Betterment’s slightly wider field of available non-education account types offers a greater ability to realize account type-related advantages

Betterment Account Types

Betterment allows you to open retirement accounts, including traditional, Roth, SEP, and Inherited IRAs. You can also open individual and joint taxable accounts, joint taxable accounts with rights of survivorship, trust account, and cash reserve accounts.

The current annual percentage yield (APY) on Betterment’s cash reserve account is 0.10%.

All these accounts are free of minimum balances except for the cash reserve account, into which you will have to deposit at least $10 to open. You can click here to learn more about which Betterment accounts would be advantageous to you.

Wealthfront Account Types

Wealthfront’s retirement accounts include traditional, Roth, and SEP IRAs. You can also open individual and joint accounts with rights of survivorship, as well as trusts. Wealthfront’s high-interest cash account earns an APY of 0.10%.

You need a minimum $500 deposit to open an account with Wealthfront. You can link external accounts with Wealthfront for an overall picture of your retirement progress.

Betterment Has More Non-Education Account Types

With its inherited IRA and two cash account options, Betterment has a slightly wider variety of account types than Wealthfront.

Betterment vs Wealthfront: The Bottom Line

When it comes to choosing between Betterment and Wealthfront, Modest Money recommends Betterment to most investors. Betterment offers a wider variety of pre-built portfolios as well as access to human advisors and management fee discounts for high balances.

Both Betterment and Wealthfront are excellent robo-advisor offerings, however, and in some cases, you might want to invest in both, keeping most of your investing in Betterment, for example, while turning to Wealthfront for your education savings.

Both Wealthfront and Betterment offer tax-loss harvesting as well as socially responsible investing. When it comes to choosing advisory or brokerage services, you can’t go wrong with either.

Betterment is Better for:Wealthfront is Better for:
Pre-built portfolio choicesCustomization by ETF
Passive investors who want to make broad choicesMore active investors who want to choose individual ETFs
Non-education account varietySaving for education
Access to human advisorsBuying specific crypto UITs
No Account MinimumsLoans on investment balances
High-balance management fee discountsMore investment options for high balance accounts


In addition to access to CFPs, high balance discounts, and its robust variety of pre-built portfolios, Betterment remains more accessible to even beginning investors because it doesn’t require a minimum deposit to open an account. It also doesn’t restrict its investment offerings based on balance.

Betterment optimizes its nine portfolio choices so you don’t have to worry about which ETFs they are using, though you can adjust asset classes. This is the best arrangement for most investors to remain diversified while ensuring returns.

From beginning to well-heeled investors, Modest Money views Betterment as a superior choice in most investment scenarios. If you are interested in learning how to become an investor with Betterment click here.

Learn More About Betterment


Certain types of investors might want to opt for Wealthfront over Betterment. Modest Money recommends investors who want to save for their children’s education consider opening a 529 plan with Wealthfront. The tax savings on Wealthfront’s 529 plan can save tens of thousands of dollars in education expenses.

Wealthfront also offers ETF-level investing, which appeals to those who like the internal diversity provided by an ETF while still wanting to maintain control over which baskets of securities should make up their portfolio.

Included in its ETF-level investing are two UITs you can buy to invest in Bitcoin and Ethereum. You can also open a Wealthfront cash account.

If these advantages sound good to you, click here to open a Wealthfront account.

Learn More About Wealthfront