Robinhood vs Betterment 2021

Is Robinhood Better or Betterment?

Now, this Robinhood or Betterment comparison is looking to be an interesting one. Many of you reading this will be looking to understand which of these great options is right for you, especially if you’re a newcomer to investing. Well, having spent a lot of time with both, we can honestly say that whether you go for Betterment or Robinhood, it’ll be a great choice.

If you’re expecting one of these class acts to end up as a bad example, then you’re mistaken. If one of these is better in one regard, it’s going to be because of their strengths rather than their opponent’s weaknesses. That’s because when it comes to Betterment vs Robinhood, we’re talking about two options that have impressed us at each and every turn.

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Introduction to Robinhood

Pros & Cons of Robinhood
  • Active platform made as simple as possible
  • Apps available on desktop and mobile
  • World-class design
  • Made with ease of use in mind
  • May still be too active for passive traders

To understand just how big a deal Robinhood is, consider how huge the financial world is and how many different platforms are out there looking to convince people to use them above all others in their pursuit of financial success and stability. Now, consider that Robinhood is considered by many to be the best choice for newcomers looking to get into finance, and you’ll begin to understand just how impressive they are. That’s the level of competition their opponents are up against in this Robinhood vs Betterment showdown.

They’re not for seasoned experts, nor do they pretend to be, but they’ve crafted a beautifully designed, technically superb platform that streamlines the investment process with an accuracy and useability that we don’t think any option can claim to better. They’re masters of their trade, and one of the best in the world at what they do.

Introduction to Betterment

Pros & Cons of Betterment
  • Passive investment takes the hassle out of planning for your financial future
  • Caters to your long-term goals
  • Special focus on retirement plans
  • Great desktop experience, as well as mobile app
  • Naturally, less control and spread of options

Their rivals in this Betterment vs Robinhood comparison do everything they can to make investments as easy as possible, but ultimately, they’re still about active trading. At a fundamental level, it couldn’t be easier to invest than with Betterment. They ask you questions, you link your accounts, tell them how much money you’re willing to invest and they create a globally diversified set of ETFs, stocks and bonds to help you achieve your goals. Their world-class reputation shows their results in that regard are competitive, even if there are no guarantees in the world of investment.

What they do then is quite different to Robinhood, but we think the reason so many people are interested in Robinhood vs Betterment is that both claim to offer the best options for newcomers looking to start their investment journey. We have to say, in that regard, we’re fascinated to see how it turns out, just as we’re sure many of you are eager to know whether Betterment or Robinhood is right for you.

Robinhood vs Betterment: Usability, Look & Feel

It’s obvious when we talk about Robinhood vs Betterment that we’re talking about two options which fully intend on being the easiest possible ways to invest. As we explained earlier, they do have fundamentally different approaches. Robinhood, as simple as it is, is not passive investment, whereas Betterment is.

In terms of design, they have different goals but both are very easy to use. Robinhood, for instance, may lay claim to the easiest way to invest in any kind of active manner, whereas Betterment may provide the best design for passive investment, wth its quick and easy account set up and straightforward goal setting mechanism. Inputting information and the banking process is made as simple as possible on both, so there’s no clear Betterment vs Robinhood winner there.

One key note is that we’d say that Betterment is probably a touch better than Robinhood on desktop, while the latter takes the edge on mobile.

Robinhood vs Betterment: Payments

Despite the difference in target audiences, the way you finance each is very similar. They both essentially work by linking existing accounts, and Betterment even allows you to sync accounts in order to understand them better. This is perhaps at a slower pace than some expert options but we feel that reflects their target markets rather well – especially Betterment, which provides a long-term, passive investment strategy.

Betterment deposits take between 1-5 days. Robinhood is similar in that regular deposits also take up to five days but there’s a fast deposit option up to $1000, which comes in four-hour blocks. There’s no minimum balance on either, as far as we’re aware, meaning whether you prefer Betterment or Robinhood, you’re under no pressure to invest if you don’t want to.

If you do though, you’ll be happy to know the maximum examples for both platforms are pleasantly high, with the daily maximum for Robinhood being $50,000 and $300,000 for Betterment by ACH daily electronic transfer limit. This is a rare instance where there’s a clear distinction. Overall though, we’d simply say both offer excellent payment services.

Robinhood vs Betterment: Customer Service

You may be surprised by how much these two have in common as we make our way through this Robinhood vs Betterment review. Well, that doesn’t look likely to change here.

Whether it’s Betterment or Robinhood, both excel in explaining themselves to their users. Robinhood may have the best Help section we’ve come across – it really is that good. Betterment, meanwhile, are simply captivating in how straightforward they make investment seem. In other words, a great deal of their customer service comes from the simplicity of what they offer and how well they explain themselves.

Betterment clearly takes a lot of pride in its robo-advisors – and they should. It’s an excellent service. That said, Betterment does offer advisers on phone as well as via email, but advice is a much bigger part of what they do. Therefore, Robinhood’s reliance on email and social media is understandable considering it’s more of a backup for their ultra-simple service.

Our conclusion to this part of our Betterment vs Robinhood comparison is that each would probably benefit from some more options – a phone line for Robinhood and human advisors for Betterment – but their customer service is a reflection of the core concepts behind their platforms. It’s a choice we think most users will be happy with.

Robinhood vs Betterment: License & Security

Whether it’s Robinhood vs Etrade or Robinhood vs Acorns, there’s nothing more important than security. Unlike other parts of this Betterment vs Robinhood review, this is an area we want similarities. Security is an objective matter of fact, and we hope our Betterment vs Robinhood evaluation is positive here.

We’re happy to say, whether you choose Betterment or Robinhood, that very much is the case. Both are private companies with excellent reputations. They’re both members of FINRA, ensuring they meet regulatory requirements in the USA. They’re also members of SIPC, which provides investors with protection for invested funds. Furthermore, they both utilise encryption and a two-factor authentication system, so no one can access your information or account: vital for these kinds of platforms.

Robinhood vs Betterment: Spread

The spread of options when it comes to Robinhood vs Betterment is naturally dictated by who they’re looking to appeal to. Despite both having ease of use and a non-expert audience at the forefront of their minds, they do very different things. Whether we’re talking about Vanguard vs Robinhood or eToro vs Robinhood, you have to understand the target audience first to make any kind of fair comparison.

Robinhood vs Betterment is a tale of an active trading platform vs a passive one, regardless of how stripped-back and user-friendly that active trading platform is. That means that, while Robinhood offers things like stocks, ETFs, Option and Cryptocurrencies to trade, Betterment offers portfolios of Stock and Bond ETFs to help you achieve your goals.

The latter has fewer options, but that’s by design. It’s aimed at people who don’t wish to take on that active role. Despite there being a clear difference in who offers more, we don’t consider there to be a winner in this part of our Betterment vs Robinhood review. Let’s put it this way, Robinhood has more research options, but Betterment’s users wouldn’t need them. That means neither is objectively better – they just offer different things.

It’s actually quite an interesting situation because often when we do Robinhood comparisons – or even in this case of our Robinhood review – we make the point that their choice to use less compared to expert platforms isn’t a flaw. Here, we say the exact thing about Betterment. Our opinion is whether it’s Betterment or Robinhood, they offer more than what’s needed for their target audience.

Conclusion: Is Robinhood better or Betterment?

We’re not sure if we could ever truly come to a decisive verdict on Betterment vs Robinhood. We certainly understand why so maybe people demand an answer to this question, but they’re fundamentally misunderstanding what these options are all about. That’s because they’re both aimed at people who would like to get involved in investments as newcomers and are both – whether it’s Betterment or Robinhood – very good at what they do, so it’s a natural comparison to make.

However, Robinhood vs Betterment is also a misleading comparison. Let’s break it down this way: if you go with Robinhood, you’re getting what is arguably the most streamlined and user-friendly platforms out there aimed at newcomers to the world of trading. With that said, it’s you making the decisions and doing the work. With Betterment, you provide them with information and then they make those choices for you. For all the Robinhood vs Betterment similarities, this is a huge fundamental difference in the services that they provide.

Perhaps, if one of them was bad at what they did, we could say one is objectively better than the other. But that isn’t the case – far from it. We’re comparing apples and oranges, two platforms which are great, and do have plenty in common, but also one key defining difference. We recommend carefully considering how active you would want to be as an investor to know whether Betterment or Robinhood would be right for you.

Looking for more trading guides? Check out our best broker for futures review or broker demo account guide.

Robinhood vs Betterment FAQ

❓Is Betterment a good investment?

When we’re talking about finances – whether it’s platforms or trading – so much of all this comes down to whether or not something is a good investment. Betterment may make many of the decisions for you, but there’s still one huge one that you need to decide for yourself and that is whether they’re right for you. It’s an investment in itself. To find out, we decided to pit it against one of the best online broker platforms in the world for newcomers in Robinhood.

☝Is Robinhood better?

Making a decision about which trading platform is right for you comes down to a lot of different factors, but one clear question is whether the one you’re looking at is better. Better than what exactly? Well, better than the many, many other options that you have at your disposal. We thought the best way of testing this question – and what many consider to be one of the finest options for investment newcomers in Robinhood – would be to see how they stack up against one of their lead competitors in Betterment.

💰Is there a minimum I need to invest in Robinhood or Betterment?

One of the main things that people worry about when it comes to investment is how much money they actually need to get started. We know that is a key consideration when figuring out which platform is right for you. That’s why we will be covering this, alongside everything else you need to know about both of these trading platforms and apps, in our exclusive Robinhood and Betterment comparison.

📱Is Betterment a passive investment platform?

If you’re new to the world of finance and investments, one of the things that you probably come across a lot is people talking about active and passive investments. What this means and how Betterment fits into all of this – as well as how that affects how they stack up against others – is a key factor in the many things we cover as part of our comparison between Robinhood and Betterment.

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