This post is part of our series on IRA & Brokerage bonuses. Every Tuesday we share another bonus with you.
The Offer
Betterment is currently offering between 3-6 months of commission-free service for new customers who open and fund an individual Betterment account with at least $5,000 within 30 days of account signup.
Betterment offers a unique standard pricing model among its peers. There are no individual trading fees. Instead, you pay only a management fee that is dependent upon the balance of funds invested with Betterment. Larger balances are rewarded with a lower fee percentage of the average annual balance. The following table describes Betterment’s three price tiers:
| Price Tier | Balanced Required for Tier | Price (as a percentage of average annual balance) |
| Builder | $100/month minimum auto-deposit | 0.35% |
| Better | $10,000 minimum balance | 0.25% |
| Best | $100,000 minimum balance | 0.15% |
Up to 6 Months Commission-Free Service
| Bonus | Deposit | Receive |
| Commission-Free Service | $5,000+ | 3 Months Free |
| $25,000+ | 4 Months Free | |
| $100,000+ | 6 Months Free |
To receive the offer, you must do the following:
- Open a new individual Betterment account.
- Fund the account with at least $5,000 of funds within 30 days of account opening and maintain the funds in the account for 90 days.
Rules:
- A specific expiration date for this offer is not cited.
- Valid only for new individual accounts at Betterment.
- Not valid with any other offers and not transferable.
- Offer only available to U.S. Residents.
- Investing involves risk.
The Verdict
Whether or not you will benefit from Betterment’s pricing model depends on your investor profile and goals. Betterment prides itself on a more managed, streamlined, passive approach to investing. If this describes your goals, you may prefer Betterment’s approach over a more DIY approach that would tend to bow more readily to investor whims. The pricing model of no trade or transaction fees seems very much aligned with Betterment’s hands-off investment strategy. Betterment’s website also makes the claim that its portfolio and tax-efficient algorithms tend to yield better average returns than the average DIY investor.
For those interested in Betterment, regardless of the price tier at which you choose to invest, all tiers have the advantage of no trade fees, no transaction fees, and no rebalancing fees. The “Better” and “Best” tiers come with the additional feature of Tax Loss Harvesting. The “Best” tier also offers a personal consultation to users investing at least $500k with Betterment.
If you are inclined to invest with Betterment but don’t intend to invest a significant balance, note that if you deposit less than the $100/month required for the lowest “Builder” tier, you will be charged at a flat $3/month.
Do you have experience with Betterment? Let us know in the comments below!
HT: InvestorJunkie.com
