We think you’ll be happy with these changes, but we also know that with change comes questions…
1. What are the new fees?
Customers will fall into one of three fee buckets: Builder, Better, and Best.
The fee for “best” accounts is 0.15% for balances above $100,000; 0.25% for “Better” accounts with more than $10,000; and 0.35% thereafter for the “Builder” category. For details on the plan and additional features, see our pricing chart.
2. Why did Betterment change its fees?
We pride ourselves on offering sophisticated investing at an affordable rate. Our fees have always been great value, but now, there’s really no reason not to choose Betterment.
3. When does this pricing come into effect?
Immediately for new customers, with a free 30 day trial. Existing customers have some options (see below).
4. What are the new features?
Betterment now offers Traditional and Roth Individual Retirement Accounts. It’s everything you’ve come to expect from Betterment, with an added tax advantage.
In addition to the new low fee across all account types, those above $100,000 have access to personal advice, customized portfolios and faster deposits. Accounts with a balance of $10,000 or more have the added value of faster deposits. See our account comparison for more information.
5. Why should I open an IRA?
In addition to a personal investment account, you can now open a Traditional or Roth IRA from Betterment. An IRA is a retirement savings vehicle that offers significant tax advantages. Learn more about IRAs and the differences between a Traditional and Roth IRA.
6. Can I roll over an old IRA or 401K to a Betterment IRA?
Yes, we recommend that you do. The Betterment IRA has the lowest fees in the industry, making it an ideal place to keep your long term investments (such as money for retirement). The average investor pays 0.70% per year for a 401(k) account from a previous employer. By rolling that money over to Betterment, you’ll be able to pay a significantly lower fee – 0.15% to 0.35% – and keep more of your money for retirement. We’ve automated as much of the rollover process as possible, but also have a team dedicated to making your rollover simple. Email firstname.lastname@example.org with any questions.
7. I’m already a Betterment customer. Do I have to pick a plan?
We will email you with details on the different fee buckets as well as the opportunity to select which one’s right for you. If you’re not quite ready to make the change, you can continue on your current plan (but we recommend taking advantage of the better rates!).
8. What if I don’t have $10,000 to invest and I can’t deposit $100 per month?
The Betterment builder account is marked by a commitment to growth, and requires automatic deposit of at least $100 per month. You still have complete access to your money and can withdraw at any time, without a penalty.
If you can’t make a commitment to use auto-deposit for at least $100 per month, you’ll be upgraded to the Better plan. Customers in the Better plan that do not have at least $10,000 in their account will pay $3 per month in lieu of the annual fee.
Questions? Concerns? Talk to us – we want Betterment to be the investing solution you love.