It’s known for its expert cash management tactics and is very goal-oriented. However, is it available in the country? And is it worth buying? Read ahead to find out.
The platform helps with cash management through savings advice and investing. It does this by gathering information from you. This is done through easy to read questions that are no hassle.
Depending on the goal you’ve set, you’re given investment portfolios. Users love how extensive they are, and you will too.
You can link Betterment to multiple bank accounts. This can be done through Betterment’s Cash Reserve system. As you can imagine, you can track your expenditure greatly. This also allows for some detailed projections.
Overall, the brand is doing very well. They’ve been around since 2008, being created in New York City. They’ve lasted 12 years and will keep making new strides.
Is Betterment Available In Australia?
As you’ll see, it’s a platform that is quite useful. However, it’s not available outside the United States. You either need to be an American citizen or resident to utilize it. You could use one of its alternatives, but many of them aren’t available in Australia either.
How Do You Sign Up For Betterment?
When signing up, you’ll have to pick between Betterment’s
- Investing options
If you click Cash, you’d be asked for your email address, then you’ll have to create a password, and fill in basic account details.
If you choose retirement or investment, you’ll be asked a series of questions. For example, whether you’re retired, and how old you are. After the questions are done, you’ll be asked for your email address, password and account details as before.
No Account Minimum
Betterment doesn’t have a minimum deposit. You don’t have to pay a minimum deposit when it comes to digital accounts.
If you have a Betterment Premium account, you need to make quite a large deposit. It should be $100,000. However, the premium account lets you contact CFPs, which is worth it.
Make A Lot Of Money
You can make quite a bit of cash with Betterment. They provide a 0.3% interest rate for whatever you’ve collected. It is saved in their Cash Reserve system. However, the interest rate could differ. So, you could be making more.
The money is also secured. Betterment allows for a $1 million FDIC insurance coverage.
Have An In-depth Retirement Plan
You’ll have to link all your bank accounts to utilize its retirement planning feature. It uses them to tell you how well you’re saving. It also analyzes your funds and gives you a rundown of the best retirement plans you could use.
A tool everyone finds useful is Betterment’s projection of when you’ll be able to retire. It also tells you how extensive this plan will be.
Do You Want To Donate?
Betterment takes your appreciated shares and lets you donate them to charities associated with them. In total, there are 11 you could choose from.
However, this isn’t the biggest benefit. Your tax return will be less too. The giving would fall under your deductibles.
Manage Your Cash
As mentioned, you can have multiple bank accounts linked to the platform. Not only does this help with your retirement fund, but it also helps with general cash management. Whatever the platform sees as excess cash, it transfers to your savings accounts.
As it tracks them, it would see if your bank accounts are low on cash. It’ll transfer money to them if this is the case.
It can do this automatically, which is why you should opt for SMS notifications. This lets you stop transfers before they take place.
Save The Most Cash
With Betterment by your side, you can save a lot. It asks you a range of goal setting questions, giving the algorithm a better idea of how you work. This allows it to come up with how much you should be spending for your retirement fund and gives you an amount that would act as a safety net for the year.
If you want, you can add more goals and come up with more savings options. The best thing is, Betterment would auto-deposit funds from your account to reach these goals. So, you’ll never have to worry about keeping up with them.
Get Great Advice
You may want to save. This is why the platform has a resource center. It doesn’t just provide detailed guides, but live calls with CFPs as well. Unfortunately, the calls aren’t free. You’ll have to pay at least $200, depending on the package.
The CFP would you take through everything you need to know about savings, including retirement and health plans. Depending on the package, the duration of the call would vary. If you paid $199, it would be 45 mins. If you paid $299, it would be an hour.
Now, you may not know what a CFP is. It stands for Certified Financial Planner and Betterment has professionals who’ve been in the game for a very long time.
Betterment Is Not Expensive
There are 2 types of payment plans. The first is for Betterment Digital, while the other is for Betterment Premium. The former has a 0.25% annual fee, while the latter has a 0.40% annual fee.
This isn’t too bad considering that the digital package lets you access the platform’s standard tools while the latter lets you access CFPs.
If you have an account balance of over $2 million, you will be charged. However, it will not be high. For a digital account, it’s 0.15% while for premium, it is 0.30%.
If you funded the 2 million before September 2018, you won’t be charged management fees.
Invest A Lot
The platform is smart with their investment choices. They use ETFs, representing 12 different asset classes. Their investment philosophy is based on the modern portfolio theory, which allows for a diverse investment range.
The platform lets you work with the best companies. Betterment screens them, letting you find companies with less than great track records. Thus, you can avoid them.
Without a doubt, Betterment is a powerhouse of a robo-advisor. However, there are some great alternatives out there. Below, we will be going through them.
Ellevest is known to be Betterment’s biggest competitor. Unlike Betterment, it isn’t for everyone. It’s a robo-advisor made for women, by women.
Betterment helps you save for goals. This isn’t the case with its counterpart. You save for challenges that you may face as a woman. In the process, you’ll have access to financial planners and career consultants. Similarly, there are no minimum deposits for Ellevest Digital. However, for premium accounts, you need to make a minimum deposit of $50,000.
They both charge the same fees. Ellevest digital charges 0.25% per $2 million, annually. However, premium takes 0.50% which is 0.10% more than what Betterment takes.
They’re known to be more helpful as they have a fully dedicated resource center. However, Ellevest’s support can only be contacted during office hours. Although Betterment gives you future projections, Ellevest is known more for its accuracy.
Unfortunately, there’s a minimum balance. This is $500, which is considerable.
What’s great about Betterment is that you get access to CFPs, which you don’t with Wealthfront. Moreover, they only allow digital financial planning, while Betterment has a premium feature as well.
In both platforms, you get charged 0.25% annually. Wealthfront is known for its college saving plans. As of now, there are over 529 of them.
Like any good robot advisor, they have a cash reserve system that lets interest collects. As of now, 0.29% gets added, which isn’t bad.
Betterment is an amazing platform to use if you want to improve your cash management. It’s especially great if you have specific goals you want to save for. Unfortunately, it’s not available in Australia.