Betterment Help Center | Common questions (2024)

FAQs

What are the cons of using Betterment? ›

If you are under age 59 ½, you will see the option for an “early distribution,” which may mean that you will pay a 10% tax penalty along with any taxes owed on the withdrawal.

Bottom Line. Overall, Betterment can be a great, low-cost online investing service if you're confident in the security measures it takes. While the robo-advisor maintains its status as one of the largest digital services in the county, it also maintains its fiduciary duty to its users.

Benefits of Investing With Betterment

6 If you don't want to invest all your money, you can earn a high 4.75% APY interest rate on your cash using the Betterment savings account. 15 Finally, the technology is well-designed and user-friendly. Betterment makes it easy and safe to start investing.

Betterment is best for:

Retirement investors. Users with low balances. Those who want automatic rebalancing. Users who like goal-based tools.

Betterment Securities is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org.

If your goal is short-term, we'll recommend a more conservative portfolio with lower expected returns with less volatility, and if your goal is longer term, we'll likely recommend a more aggressive portfolio with higher expected long-term returns with higher volatility.

Stocks and Bonds Investing Accounts Betterment's investment advice is available for 0.25% (25 bps) per year or $4 per month. While it will impact our fees, Betterment does not require you to maintain a minimum balance for your account.

Withdrawals generally take about 4-5 business days to process; funds will automatically be sold and sent to your linked bank account. When you request a withdrawal, shares in your account are sold and this may have tax consequences. Betterment will always sell your shares in a way that minimizes taxes for you.

Does Betterment have Zelle? ›

We currently support instant debit card transfers and deposits between third-party apps like Venmo, Cash App, and Zelle®, and your Checking account via your Betterment Visa debit card. Note that when using Zelle specifically, the sender or receiver must have access to Zelle through their bank or credit union.

Betterment Cash Reserve is essentially a high-yield savings account. But unlike most savings accounts, it doesn't limit how many transactions you can make each month. Betterment Cash Reserve pays a high interest rate. You can also create buckets to save for different goals, such as "Travel Account" or "Emergency Fund."

Betterment also gets negative reviews on Trustpilot, with 1.7 out of 5 stars based on customer reviews. Some of the customer complaints on Trustpilot are related to problems with accounts being locked, passwords not being recognized, and delays with transferring money to another investment platform.

Checking accounts and the Betterment Visa® Debit Card provided and issued by nbkc bank, Member FDIC.

At a high level, you can think of SIPC as providing protection for funds held in a brokerage account in the event that the brokerage fails. The Securities Investor Protection Corporation (SIPC) provides insurance that protects your investments, including those held by our broker, Betterment Securities.

Betterment does not store your credentials. Our trusted partner for account aggregation protects the credentials using bank-level encryption both when transmitted and when stored.

Stash is a better option for those who want to pick their own stocks and ETFs, as Betterment only allows you to invest through its managed portfolios. Betterment is more appropriate if you prefer a hands-off approach to your investing.

Taxable Accounts: Individual and Joint With taxable investment accounts, you generally owe taxes each year on the dividends and other distributions paid to you that year. You may also owe taxes when you sell shares, depending on whether or not you've realized capital gains on the investment.