• What does Betterment cost?

    Last Updated: March 10, 2015 11:07AM EDT
    Betterment charges a management fee of 0.15% to 0.35%, depending on your balance and auto-deposit, and is prorated across the entire year and is charged at the end of each calendar quarter (every three months).

    For accounts under $10,000 we provide 2 pricing options. For those who have automated deposits turned on for at least $100/month, the rate is just 0.35%. If you choose not to automate your savings, the fee is still a low flat rate of just $3/month. This is either/or and never combined. After your account reaches $10,000 there are no longer deposit requirements and we focus on reducing your fee down to just 0.25% per year, and then further to 0.15% when your account is over $100,000.

    In other words, for those clients with pricing 0.15% to 0.35%, every three months Betterment charges 0.0375% to 0.0875% based on your average balance for the period. If you withdraw all of your money before the end of the quarter you are charged a prorated fee only for the days your money was managed by Betterment.

    Betterment's single management fee covers everything you need including transactions, trades, transfers, rebalancing, advice, account administration, etc. Unlike other companies Betterment does not charge you transaction fees to buy and sell securities. 

    Your money is invested in a fully diversified index-fund portfolio made up of 12 exchange traded funds or ETFs. Each of these ETFs has an expense ratio (they range from .09%-.17% depending on your allocation - this is about 15 cents for every $100 you invest), which you would pay no matter where you purchased these funds. The cost charged by the funds is a little harder to see because the fund companies get their money by slightly reducing the dividends they pay out. Rest assured that Betterment works hard to offer funds with some of the lowest fees.
  • Am I still charged the whole fee even if I don't use the product for the whole year?

    Last Updated: January 26, 2015 1:21PM EST
    No. Betterment’s fee is a straightforward 0.35% to 0.15%, depending on your balance, and is prorated across the year based on the average daily balance in your account, and a portion of this is charged quarterly (every 3 months). So if you withdraw money from your account, your average daily balance will decrease and your fee for the quarter will reduce accordingly. If you withdraw your entire balance before the end of the quarter we will simply charge the prorated fee at that time.

    We do not have fees for accounts with a $0 balance, so if you need your money you can still keep your account open without penalty.
  • What are my fees based on?

    Last Updated: April 10, 2013 6:34PM EDT
    Your fees are based on your average balance of your entire Betterment account, not each goal. Therefore, you can have as many goals as you like without incurring additional fees. If you wanted to qualify for the Builder plan - which requires a minimum auto-deposit of $100 and a balance less than $10,000, then an auto-deposit for a cumulative $100/month suffices (in other words, you do not have to deposit $100 into each goal).

    Our system is automatically designed to put you in the cheapest fee plan possible, and is prorated by the day. You can read more about our fee plans here.
  • Will my fees increase if the market dips and my account falls below the threshold for my current fee tier?

    Last Updated: January 26, 2015 1:23PM EST
    No. Market fluctuations will not adversely impact the Betterment fee tier that you are in. For example, if you deposit $100,000 in your account and a dip in the markets causes your account balance to fall to $99,000 you will still remain in the 0.15% Best pricing tier.

    However, if you have deposited $99,000 and the markets move you above $100,000 - we would actually reduce your fees from 0.25% to 0.15%. Your fee would stay at 0.15% even if additional market changes bring you back down to $99,000. This is because our system is designed to look for the moment we can upgrade you, everyday.

    Only withdrawals that result in a balance below the fee tier threshold will result in a reevaluation of your fee tier that may bring your fee tier down. 

    You can review more details about pricing here.
  • Can I withdraw my money any time at no additional cost?

    Last Updated: January 09, 2015 11:11AM EST
    Yes, you can withdraw your money from Betterment at any time. We do not charge you any trading fees nor penalties for making withdrawals or closing accounts. It’s your money, and is always accessible to you.

    Withdrawals generally take about 4-5 business days to process. However, if you have recently made a deposit, your withdrawal may be delayed due to the recent deposit needing to fully settle first.

    When you withdraw, shares in your account are sold and this may have tax consequences. Betterment will always sell your shares in a way that minimizes taxes for you. We’ll sell shares that have lost value first (short-term losses, then long-term losses), and then we’ll sell shares that have gained value (long-term gains, then short-term gains).

    Tax Impact Preview allows you to see an estimate of the taxes you may owe before you make a withdrawal.
     
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