March 18, 2012

Betterment – Simple Solutions for Investing Wisely


Banking online has become the norm, however many people are still confused about how to invest in stocks, bonds, and mutual funds without visiting an expensive broker. Betterment is an application that blends the best of online banking and big-time investing, making it possible for people to create high-yield investment accounts all on their own.

Unlike some big brokerage houses, Betterment has no minimum balance requirements on its investment accounts. Just sign up by entering a bit of basic information, then securely upload your contact information and bank account logins. Transfer money from your checking account to your Betterment account, and within just a few minutes you can be on your way to having a diversified investment portfolio. Betterment operates under the firm belief that asset allocation is the most important decision that investors must take. Because of this, the application has been created in a way that makes choosing an asset allocation – and deciding how much risk you’re willing to take on – the only real decision you need to make. Once you’ve selected a risk level, Betterment will choose the right balance of stocks and bonds to fit your needs.

To see how your funds are doing, log on and click on the “Summary” tab at any time. Betterment also gives you actual advice and recommendations based on your current investments. The application will give you a recommended allocation range and recommended monthly savings amounts, which you can then compare with peers in your same age or income demographic.

Practical Uses:

  • Create an investment account on your lunch break
  • Get customized recommendations on how much risk you should be taking
  • See how your investments compare to those of your peers
  • Start buying stocks and bonds without doing all the heavy lifting

Insider Tips:

  • Betterment buys ETFs based on each user’s selected asset allocation
  • Users who want their money back can have it electronically transferred to their checking accounts
  • Dividends are automatically reinvested
  • Betterment only operates in the United States

What we liked:

  • Betterment takes the hassle out of buying stocks and bonds
  • People don’t have to worry about changing banks to use Betterment
  • Betterment offers a straightforward pricing structure with no hidden fees
  • All investment accounts are automatically rebalanced when necessary

What we didn’t like:

  • People who don’t do due diligence beforehand may not understand the risk they’re taking when transferring their money to Betterment


Company Info:


  • Annual management fees range from .15% to .35% of the average balance

Submit a Comment