What Is Betterment?
Betterment is a robo-advisor investment app and platform. It allows you to determine some basics of how you diversify your investment based on your personal goals. Depending on the plan you choose, you don’t need to make a minimum deposit. You can set up automatic drafts for investment.
How Betterment Works
You can open an account with Betterment, set up automatic deposits into it, your investment preferences, and leave the app to do the work. Betterment is designed for investors who don’t want to do a lot of research and make sales and buys on a daily basis. If you opt for a premium Betterment account, these are monitored by financial advisors.
Who Is Betterment Best for?
Betterment is a great investing platform for people who can’t meet a high minimum investment. It’s also geared for hands-off investors. If you want to set the parameters for investing and let “someone else” take care of it for you, then this might be the best fit for your needs.
Betterment Key Features
When you’re looking for an investment platform, you want to find one that offers you the features you want most. The features you want depending on your level of knowledge and how much work you want to do in the decision-making process. Here’s a look at some of Betterment’s best features:
You simply provide Betterment with your investing goals and set parameters, and they take care of the rest. The platform helps to keep your money in a diversity of investments and uses automation to maximize the investing opportunities available to you.
You want an investment portfolio that helps your money grow while minimizing the risks. The best way to achieve that is with a diversified portfolio. With Betterment, your money is invested in a wide range of stocks, bonds, and ETFs. Betterment uses ETFs from 13 asset classes to ensure your money is in a variety of accounts.
The cost of investing with Betterment is based on the account you select. There is Betterment Digital with a 0.25% annual fee and the Betterment Premium with a 0.40% annual fee. The Premium account offers more but requires you to make a $100,000 minimum deposit.
Betterment strives to help you make the best investments to make the most money, and the system is constantly adjusting your portfolio to ensure that goal. The investments are made based on their value to your portfolio, so you realize as much growth as possible.
You can use some of your investments to save on your tax bill, especially if you’re investing for retirement and setting it up that way. You can also use tax-loss harvesting to sell items in your portfolio that aren’t doing well to offset the taxes you might owe on investments that are doing well.
You can link your other investment accounts and savings accounts with Betterment so that you can get a look at your complete financial position in one convenient location. The dashboard helps you to visualize the state of your finances.
Betterment Products and Services
Betterment offers two primary services. There are two types of investment accounts: the Betterment Digital and the Betterment Premium. They also offer banking services. You can open a checking account and a cash reserve account, which is similar to a savings account at a higher interest rate.
Betterment Fees and Pricing
There isn’t a fee for banking. You do pay a management fee of 0.25% of your investment with the Betterment Digital account and 0.40% of your investment on the Betterment Premium account. This helps to meet the company’s goal of transparent pricing.
Get Started with Betterment
The process to start with Betterment is fairly easy, and you can do it online in a few minutes. You’ll need to open an account and link your bank account to fund the Betterment account. You might need to provide personal information and explore your investing goals.
Connecting Your Bank Accounts
You’ll need to link your bank account to fund the investment account. There is also the option to link all of your bank and investment accounts to help you get a clear picture of your financial health.
Setting Your Portfolio Asset Allocation
Investing always presents a risk, but some investments are more reliable. Depending on where you are in life and your goals, Betterment can help you determine your portfolio asset location to provide you with a diversified account.
Filling Out Your Personal Information
Because you’re investing money and can make money, Betterment needs your personal information. This includes:
- Full legal name
- Date of birth
- Social Security number
- Citizenship status
In some cases, you might need to upload documentation to prove your identity. Get started today on their website.