Software · head to head
Vanguard vs Betterment
The short version
- Each has a real cost: 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; Betterment digital automated investing charges $5 per month fee for accounts under $24,000 balance
- They diverge on capability: Vanguard covers Low-cost index funds, Betterment covers Automated investing.
Where they differ
Only the attributes on which Vanguard and Betterment actually diverge.
| Attribute | Vanguard | Betterment |
|---|---|---|
| Starting price | On request | $5/month |
| Pricing model | transaction | subscription |
| Founded | 1975 | 2008 |
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 Vanguard
- Low-cost index funds
- Commission-free trading
- Retirement accounts
- Financial advisors
Only in Betterment
- Automated investing
- Retirement planning
- Financial advisory
- Goal tracking
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.
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
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
Where each one falls short
Documented limitations, not opinions. Every one is a constraint you would hit in normal use.
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
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 $1,000,000 account balance
Pricing, plan by plan
Vanguard
On request- Self-Directed Investor$undefined/month
- Low-cost index funds
- Commission-free trading
- Advisory Services$undefined/month
- All Self-Directed features
- Financial advisors
Betterment
$5/monthNo published plan breakdown. See the Betterment review.
Which should you pick?
Choose Vanguard if
- You need low-cost index funds.
- You work on Web, IOS, Android.
- You also want commission-free trading.
Choose Betterment if
- You need automated investing.
- You work on Web, iOS, Android.
- You also want retirement planning.
Questions people ask
- Is Vanguard or Betterment better?
- Neither clearly leads. Vanguard starts at On request and Betterment at $5/month, and user ratings are close enough to be indistinguishable. Choose on capability and platform support.
- Which is cheaper, Vanguard or Betterment?
- Vanguard starts at On request and Betterment at $5/month.
- Does Vanguard or Betterment run on more platforms?
- Vanguard runs on Web, IOS, Android. Betterment runs on Web, iOS, Android.
- What is Vanguard best used for?
- Vanguard is most often used for holding low cost index mutual funds and etfs for long term investing, running iras and taxable brokerage accounts, employer retirement plan participation. Of those, holding low cost index mutual funds and etfs for long term investing and running iras and taxable brokerage accounts are not what Betterment is typically brought in for.
- What can Vanguard do that Betterment cannot?
- Vanguard covers Low-cost index funds, Commission-free trading, Retirement accounts, Financial advisors. Betterment covers Automated investing, Retirement planning, Financial advisory, Goal tracking. Both handle Bank accounts, Investment accounts, Web support, IOS support.