There is such a large variety of investing apps and online services out there, it is hard to know which one to go with. Have no fear, there is the perfect app or online service out there for you somewhere, it may just take a little looking around and researching to find it. Betterment, an app for investors, has become of the most reliable and well-known online investing companies in the United States.
What is Betterment?
Well, like its name suggests, Betterment aims to better serve you in wealth management. The company aims to allow people to both grow and manage their money for a fraction of the cost of traditional financial services. With over 120,000 customers investing over $3 billion online, Betterment to help you really make the most of your investment experience.
How Does Betterment Work?
Betterment has a general three-step program for getting people started with the company. The investment agency wants to be sure that each customer gets a successful and personalized investment portfolio.
First, you “get advice.” Type in information about yourself and Betterment will find a portfolio that may work for you. Based on both your age and income, they decide what investment goals may work for you. For instance, if you are 30 years old and make $75,000 a year, you receive three options. The first option is a “safety net” option. This is savings for three to six months of unexpected expenses (the target is $12,000). The next goal is retirement where you would want to save to have $120,000 available annually for living. Lastly, there is a “general” option that does not have a monetary goal.
Once you’ve decided on a goal (or a plan) that works best for you, now it is time to invest your money. Fund your account and Betterment will take care of the rest. You can start your Betterment account for as little as $10. The company trades its customers money in globally-diversified, low-cost ETFs. That is all you have to do. The third “step” is to step back and relax, let Betterment worry about your investments.
Traditionally, fees have taken about 1 percent of every investors money. However, with new technology, investing has become easier to manage, therefore it is cheaper to invest your money. Betterment charges a fraction of the traditional fees. Say you had $100,000 in your investment account, traditionally, this would mean a charge of $83 monthly. However, Betterment’s services would only cost you $13. This would give you the potential to save over $55,000 during the time you have your investment account open.
Types of Accounts Supported by Betterment
Betterment supports deposits and automated transactions from just about every type of account from every bank. They support individual accounts, joint accounts, trust accounts, IRAs and 401(k)s. If you are wondering about whether they would accept your account or not, visit their website.
Other Benefits of Betterment
With Betterment, investors are able to invest in a diversified portfolio without having to lift a finger. Betterment is completely automated. Everything from rebalancing to deposits to dividend reinvestment.
Betterment also works hard to keep costs low for their customers. The company keeps their fees between .15 and .35 percent with higher yield investment accounts getting the largest break (.15 percent).
In addition to saving you money with fees, Betterment also using a Tax Harvesting tool along with other tools to help you save more on taxes each year. The company really believes that each investor should get the most out of their money.
Betterment’s services really aim to better each customer’s access to the management and success of their wealth through its services. With so many online investing services out there, Betterment with its “step back and relax” way of thinking may be right for you.