Betterment is one of the most well-known robo-advisors out there, and for good reason — it makes investing dead simple. But “simple” doesn’t always mean “cheap,” and the fee structure has a few wrinkles that catch people off guard.
Here’s what Betterment actually charges in 2026, broken down in plain English.
Betterment Fee Overview
Before we get into the details, here’s a quick look at everything you’ll pay:
| Fee Type | Amount |
|---|---|
| Digital Plan (management fee) | 0.25% per year |
| Premium Plan (management fee) | 0.40% per year |
| Premium minimum balance | $100,000 |
| Small account fee (Digital, under $20K) | $10/month or 0.25% annually (whichever is greater) |
| Underlying ETF expense ratios | ~0.05%–0.15% |
| Trading commissions | $0 |
| Account closing/transfer fee | $0 |
| Tax-loss harvesting | Included free |
| Crypto portfolio fee | 1% + spread |
Now let’s unpack each one.
Management Fees: Digital vs. Premium
Betterment runs two main tiers, and the fee difference between them is pretty straightforward.
Digital Plan — 0.25% Per Year
This is the standard plan most people use. You deposit money, answer a few questions about your goals and risk tolerance, and Betterment builds you a diversified ETF portfolio. The 0.25% annual fee is charged based on your average daily balance, deducted quarterly.
To put that in dollar terms: on a $50,000 portfolio, you’d pay about $125 per year, or roughly $31 per quarter.
That’s competitive with other robo-advisors, though not the cheapest option available. If you’re comparing across platforms, SoFi charges 0% for its automated investing, which makes Betterment’s fee look less attractive on paper — though the two services aren’t identical in what they offer.
The $20K Minimum Catch
Here’s where it gets tricky. If your Digital plan account balance is under $20,000, Betterment charges $10 per month instead of the percentage-based fee — unless 0.25% of your balance works out to more than $10/month.
Let’s do some quick math:
- $10,000 balance: 0.25% = $25/year. But $10/month = $120/year. You’d pay $120.
- $30,000 balance: 0.25% = $75/year. But $10/month = $120/year. You’d pay $120… wait, no. At $30K you’re above the $20K threshold, so the percentage applies: $75/year.
- $48,000+ balance: 0.25% = $120+/year, which exceeds $10/month, so the percentage kicks in.
The bottom line: small accounts get hit harder. If you’re just getting started with a few thousand dollars, that $10/month fee is proportionally steep. On a $5,000 account, you’re effectively paying 2.4% annually — ten times the advertised rate.
This is worth knowing if you’re exploring options for your first investment account. Our guide to the best investing apps for beginners covers several alternatives that don’t penalize smaller balances.
Premium Plan — 0.40% Per Year
The Premium plan bumps the fee to 0.40% annually and requires a $100,000 minimum balance. What do you get for the extra cost?
- Unlimited access to certified financial planners (CFPs) via phone or video
- Advice on investments held outside Betterment (your 401k, real estate, stock options)
- In-depth financial planning for major life events
On a $100,000 portfolio, Premium costs $400/year versus $250/year on Digital. Whether that $150 difference is worth it depends entirely on how much you value having a human advisor available on demand. If you already know what you’re doing and just want automated portfolio management, Digital covers it.
ETF Expense Ratios: The Fee Behind the Fee
Betterment’s management fee isn’t the only cost. Every ETF in your portfolio charges its own internal expense ratio, and these get deducted from the fund’s returns before you ever see them.
Betterment uses low-cost ETFs — mostly from Vanguard, iShares, and Schwab — with expense ratios typically ranging from 0.03% to 0.15%. The weighted average for a typical Betterment portfolio lands around 0.05% to 0.10%.
So your all-in cost on the Digital plan is roughly 0.30% to 0.35% per year when you add the management fee and ETF costs together.
For comparison, a traditional financial advisor typically charges 1.00% or more, plus fund fees on top of that. Betterment is meaningfully cheaper than going that route.
Tax-Loss Harvesting: Genuinely Free
One of Betterment’s strongest selling points is automatic tax-loss harvesting, and it’s included at no extra charge on all accounts with at least a $50,000 taxable balance (they expanded eligibility over time, but the feature works best with larger balances).
Tax-loss harvesting works by selling investments that have dropped in value to realize a loss, then immediately buying a similar (but not identical) investment to maintain your portfolio allocation. The realized loss offsets gains elsewhere, potentially saving you money at tax time.
Betterment estimates this can add 0.77% or more in after-tax returns annually, though your actual mileage depends on market conditions and your personal tax situation. Even a conservative estimate makes it one of the more valuable features included in that 0.25% fee.
Crypto Portfolio Fees
Betterment offers cryptocurrency portfolios, but the pricing is different from their standard investing plans. You’ll pay approximately 1% annually plus whatever the bid-ask spread is on the underlying crypto trades.
That’s significantly more expensive than buying crypto directly on an exchange like Coinbase (which charges lower trading fees for larger transactions). The convenience of having crypto managed alongside your traditional portfolio comes at a real premium.
Hidden Costs and Gotchas
No article about fees would be complete without flagging the stuff that’s easy to miss.
Cash Drag
Betterment keeps a small percentage of your portfolio in cash for rebalancing purposes. This uninvested cash earns less than if it were fully invested. It’s a tiny amount, but over decades it adds up.
Fund Changes
Betterment occasionally swaps out ETFs in your portfolio, which can trigger taxable events in non-tax-advantaged accounts. They try to minimize this with tax-aware techniques, but it’s not always avoidable.
No Direct Indexing on Digital
Some competitors now offer direct indexing (buying individual stocks instead of ETFs for better tax optimization) at similar price points. Betterment reserves its direct indexing-like features for larger Premium accounts.
The Opportunity Cost of Simplicity
This isn’t a “fee” exactly, but it’s worth mentioning: you could replicate Betterment’s portfolio yourself by buying the same ETFs at a brokerage with $0 commissions and paying only the ETF expense ratios (0.05%–0.15%). You’d skip the 0.25% management fee entirely. The trade-off is that you’d handle rebalancing, tax-loss harvesting, and asset allocation yourself.
Betterment Fees vs. Competitors
How does Betterment’s pricing stack up against other popular platforms?
| Platform | Management Fee | Account Minimum | Notable Differences |
|---|---|---|---|
| Betterment Digital | 0.25% | $0 ($10/mo if under $20K) | Tax-loss harvesting included |
| Betterment Premium | 0.40% | $100,000 | CFP access, outside account advice |
| Wealthfront | 0.25% | $500 | Direct indexing at $100K+ |
| SoFi Automated | 0.00% | $1 | No management fee, fewer features |
| Vanguard Digital Advisor | 0.20% | $3,000 | Lower fee, less automation |
| Empower (Personal Capital) | 0.49%–0.89% | $100,000 | Dedicated advisor, higher fees |
| Acorns | $3–$12/mo | $0 | Flat monthly fee regardless of balance |
A couple things stand out here. Betterment’s 0.25% is right in the middle of the robo-advisor pack. It’s more expensive than SoFi or Vanguard Digital Advisor, but cheaper than Empower’s wealth management service.
The small account fee is Betterment’s biggest competitive weakness. Acorns uses flat monthly pricing that’s more predictable for small balances, though it gets expensive in its own way as your portfolio grows. And Empower’s fees are higher across the board but come with a different level of human advisory service.
For a broader look at how major investment platforms compare beyond just fees, check out our Vanguard vs. Fidelity comparison — the same cost-conscious thinking applies.
Frequently Asked Questions
Does Betterment charge a fee to close my account?
No. There’s no account closing fee, no transfer-out fee (ACAT), and no inactivity fee. You can leave whenever you want without penalty.
Is Betterment free for small accounts?
Not exactly. Accounts under $20,000 on the Digital plan pay $10/month, which can be proportionally expensive on very small balances. The 0.25% annual rate only applies once your balance is large enough for 0.25% to exceed $10/month annualized.
Does Betterment charge trading commissions?
No. There are no commissions for buying or selling ETFs within your Betterment account. The management fee covers all trading activity.
What’s the cheapest way to use Betterment?
Get your balance above $20,000 as quickly as possible to avoid the $10/month flat fee. After that, the Digital plan at 0.25% is the most cost-effective option unless you specifically need the CFP access that Premium provides.
Are Betterment’s fees tax-deductible?
Investment advisory fees are generally not deductible for most individual taxpayers after the 2017 tax law changes. Check with a tax professional for your specific situation.
How does Betterment make money beyond the management fee?
Betterment earns revenue primarily from management fees and its cash reserve product (where they earn a spread on the interest). They also generate revenue from their 401(k) product for businesses.
The Bottom Line
Betterment’s fee structure is straightforward once you understand the tiers. The 0.25% Digital plan is reasonable for hands-off investors who want automated portfolio management, tax-loss harvesting, and goal-based planning without doing everything themselves.
The two things to watch out for:
- The $10/month minimum fee on accounts under $20K makes Betterment expensive for beginners with small balances
- ETF expense ratios add another 0.05%–0.15% on top of the management fee, bringing your true all-in cost to roughly 0.30%–0.35%
If you’re investing $20,000 or more, Betterment’s pricing is competitive. If you’re starting with less than that, you might want to consider alternatives that don’t charge a monthly minimum — then move to Betterment once your portfolio has grown.
Nobody’s portfolio needs to be complicated, and neither should the fees you pay for managing it.