Software · head to head
Betterment vs Vanguard
The short version
- Each has a real cost: Betterment digital automated investing charges $5 per month fee for accounts under $24,000 balance; Vanguard a 25 USD annual account service fee applies unless the account uses e-delivery, is a Cash Plus Account, is enrolled in an advisory service, or holds 1 million USD or more in qualifying assets
- They diverge on capability: Betterment covers Automated investing, Vanguard covers Low-cost index funds.
Where they differ
Only the attributes on which Betterment and Vanguard actually diverge.
| Attribute | Betterment | Vanguard |
|---|---|---|
| Starting price | $5/month | On request |
| Pricing model | subscription | transaction |
| Founded | 2008 | 1975 |
Identical on both: free tier (No), platforms (Web, iOS, Android), user rating (Not yet rated), category (Unknown).
What each one covers
Drawn from each product's published feature list. An absence here means we hold no record of it - not that the product lacks it.
Only in Betterment
- Automated investing
- Retirement planning
- Financial advisory
- Goal tracking
Only in Vanguard
- Low-cost index funds
- Commission-free trading
- Retirement accounts
- Financial advisors
Both cover
- Bank accounts
- Investment accounts
- Web support
- IOS support
- Android support
What people use each for
The jobs each tool is most often brought in to do.
Betterment
- Small investors starting with automated investing at no minimum balancenot Vanguard
- Fee-only digital wealth management for accounts under $24,000 via $5/month flat feenot Vanguard
- Premium advisory access for high-net-worth individuals with $100,000+ balancenot Vanguard
Vanguard
- Holding low cost index mutual funds and ETFs for long term investingnot Betterment
- Running IRAs and taxable brokerage accountsnot Betterment
- Employer retirement plan participationnot Betterment
Where each one falls short
Documented limitations, not opinions. Every one is a constraint you would hit in normal use.
Betterment
- Digital automated investing charges $5 per month fee for accounts under $24,000 balance
- Premium advisory service requires minimum balance of $100,000 in eligible investments
- Foreign transaction fees apply to checking account (though reimbursed after the fact)
- High-balance fee discounts only available above $1,000,000 account balance
Vanguard
- A 25 USD annual account service fee applies unless the account uses e-delivery, is a Cash Plus Account, is enrolled in an advisory service, or holds 1 million USD or more in qualifying assets
- Broker assisted trades cost 25 USD each, waived only at 1 million USD in qualifying assets or with an advisory service
- Options trades carry a 1 USD per contract fee on top of zero commission
- Transaction fee mutual funds cost 20 USD per online trade below 1 million USD in qualifying assets, falling to 8 USD only at higher tiers
- Outgoing wire transfers cost 10 USD unless the account is a retirement account or holds 1 million USD or more
- Commission levels are tied to a Qualifying Assets balance, so the cheapest rates require 1 million USD or more
Pricing, plan by plan
Betterment
$5/monthNo published plan breakdown. See the Betterment review.
Vanguard
On request- Self-Directed Investor$undefined/month
- Low-cost index funds
- Commission-free trading
- Advisory Services$undefined/month
- All Self-Directed features
- Financial advisors
Which should you pick?
Choose Betterment if
- You need automated investing.
- You work on Web, iOS, Android.
- You also want retirement planning.
Choose Vanguard if
- You need low-cost index funds.
- You work on Web, IOS, Android.
- You also want commission-free trading.
Questions people ask
- Is Betterment or Vanguard better?
- Neither clearly leads. Betterment starts at $5/month and Vanguard at On request, and user ratings are close enough to be indistinguishable. Choose on capability and platform support.
- Which is cheaper, Betterment or Vanguard?
- Betterment starts at $5/month and Vanguard at On request.
- Does Betterment or Vanguard run on more platforms?
- Betterment runs on Web, iOS, Android. Vanguard runs on Web, IOS, Android.
- What is Betterment best used for?
- Betterment is most often used for small investors starting with automated investing at no minimum balance, fee-only digital wealth management for accounts under $24,000 via $5/month flat fee, premium advisory access for high-net-worth individuals with $100,000+ balance. Of those, small investors starting with automated investing at no minimum balance and fee-only digital wealth management for accounts under $24,000 via $5/month flat fee are not what Vanguard is typically brought in for.
- What can Betterment do that Vanguard cannot?
- Betterment covers Automated investing, Retirement planning, Financial advisory, Goal tracking. Vanguard covers Low-cost index funds, Commission-free trading, Retirement accounts, Financial advisors. Both handle Bank accounts, Investment accounts, Web support, IOS support.