Betterment vs Wealthfront: Fees, Minimums and Tax Features
Quick answer
Both robo-advisors charge 0.25% a year for automated investing, verified July 2026. The catches sit at the edges: Betterment switches to a $5 monthly fee below $24,000 (unless you deposit $200 a month), which is proportionally expensive on small balances, while Wealthfront requires $500 to start. Both run automatic tax-loss harvesting.
Betterment vs Wealthfront at a glance (pricing verified July 2026)
| Fact | Betterment | Wealthfront |
|---|---|---|
| Advisory fee for automated investing | 0.25% a year with a $24,000+ balance or $200+ a month in recurring deposits; otherwise $5 a month (pricing page updated 18 June 2026) | 0.25% a year |
| Account minimum | $0 to open | $500 |
| Premium tier | 0.65% a year on balances under $1 million, $100,000 minimum, adds access to CFP professionals | None |
| What the fee buys | Diversified ETF portfolio, automatic rebalancing, dividend reinvestment, goal tools | Diversified ETF portfolio, automatic rebalancing, dividend reinvestment, planning tools |
| Tax-loss harvesting | Yes, automatic, included at no extra cost | Yes, automatic, included at no extra cost |
| Direct indexing | Not offered | From $100,000 (US Direct Indexing) |
| Cash account | Cash Reserve: variable rate, FDIC insurance via partner banks | Cash Account: variable rate, FDIC insurance via partner banks |
| IRAs offered | Traditional, Roth, SEP and rollover | Traditional, Roth, SEP and rollover |
| Underlying fund costs | ETF expense ratios charged by fund managers apply on top of the advisory fee | ETF expense ratios charged by fund managers apply on top of the advisory fee |
| DIY alternative for reference | A three-fund index portfolio costs roughly 0.00% to 0.04% in fund fees with no advisory fee | A three-fund index portfolio costs roughly 0.00% to 0.04% in fund fees with no advisory fee |
Betterment vs Wealthfront is the closest matchup in US robo-advice, and the headline fee is a dead heat: 0.25% a year at both, per pricing pages checked in July 2026. The differences worth knowing live in the fine print. Betterment's pricing page (updated 18 June 2026) charges $5 a month instead of the percentage when your balance is under $24,000 and you deposit less than $200 a month - which on a $5,000 balance works out at an effective 1.2% a year. Wealthfront holds 0.25% at every balance but requires $500 to start.
What the fee buys is broadly the same product: a diversified portfolio of low-cost index ETFs matched to a risk level, automatic rebalancing, dividend reinvestment and automatic tax-loss harvesting in taxable accounts. Wealthfront's main extra is US Direct Indexing from $100,000, which harvests losses at the individual-stock level; Betterment's is the human tier, with CFP professional access at 0.65% a year above $100,000. Both also run FDIC-insured cash accounts through partner banks, paying variable rates that track the Fed - rates change too often to print here, so check the live figure before counting on it.
The honest comparison, though, is not Betterment against Wealthfront but either against doing it yourself. A robo-advisor is automation wrapped around the same index funds you can buy directly: a three-fund portfolio built from the best index funds for beginners costs roughly 0.00% to 0.04% in fund fees and does most of the same job, minus the automated harvesting and the hand-holding. That 0.25% gap sounds small and compounds large: $250 a year per $100,000, every year, on top of the ETF expense ratios both robos pass through. Whether automation is worth that is a fair trade for some people and a poor one for others; run your own numbers with our compound interest calculator.
If you go the DIY route instead, index funds vs mutual funds vs ETFs explains the wrappers and VTI vs VOO settles the classic core-fund question; either way, Roth IRA vs traditional IRA covers which account the money should sit in, and our lesson on FDIC and SIPC protection explains what happens if a provider fails. This page is general information, not personal investment advice: fees and terms change, past performance does not guarantee future results, and the value of investments can fall as well as rise.
Frequently asked questions
Is Betterment or Wealthfront cheaper?
At $24,000 and above they cost the same: 0.25% a year, verified July 2026. Below that, the maths diverges. Betterment charges $5 a month unless you deposit $200 or more monthly, and $60 a year on a $5,000 balance is an effective 1.2% - roughly five times the headline rate. Wealthfront stays at 0.25% throughout but will not open an automated investing account below $500. On small balances without regular deposits, Wealthfront is cheaper; with $200 a month going in, they match.
Is a robo-advisor worth it compared with index funds?
A robo-advisor automates portfolio choice, rebalancing, dividend reinvestment and tax-loss harvesting for 0.25% a year, which is $250 annually per $100,000. A DIY three-fund portfolio of broad index funds does most of the same job for roughly 0.00% to 0.04% in fund fees, but you press the buttons yourself. The robo fee buys discipline and automation, not better markets. Whether that trade is worth 0.25% a year is a judgement only you can make.
What happens to my money if Betterment or Wealthfront shuts down?
Invested assets at both are held in brokerage accounts covered by SIPC, which protects up to $500,000 per customer, including $250,000 for cash, if a member brokerage fails with assets missing. Cash swept to partner banks through Cash Reserve or the Wealthfront Cash Account carries FDIC insurance at those banks instead. Neither scheme covers investments falling in value - market risk stays with you.
Which has better returns, Betterment or Wealthfront?
Neither has a durable edge, because both build portfolios from broadly similar low-cost index ETFs. Return differences between them come from small allocation choices (how much international, how much bonds at a given risk score), not from skill, and which one lands ahead varies by period. Past performance does not guarantee future results, and published robo returns depend heavily on the risk level and dates chosen.
What interest do the Betterment and Wealthfront cash accounts pay?
Both pay a variable rate that moves with the Federal Reserve's rate decisions, so any number quoted here would go stale quickly - check each provider's current published rate before relying on it. Structurally the accounts are similar: uninvested cash is swept to a network of partner banks, where it carries FDIC insurance, and rates can change at any time without notice.
Do Betterment and Wealthfront do tax-loss harvesting?
Yes, both include automatic tax-loss harvesting at no extra charge in taxable accounts: software sells holdings sitting at a loss and replaces them with similar (not identical) funds, banking a loss that can offset capital gains and up to $3,000 of ordinary income a year. Wealthfront adds stock-level US Direct Indexing from $100,000. The benefit depends on your tax bracket and future rates, and it applies only to taxable accounts, not IRAs.
Sources
General information, not financial advice. Tax rules and figures can change; check the current position on irs.gov or ssa.gov before acting.