If you’re looking for a robo-advisor to handle your investments, two major players to consider are Personal Capital and Betterment. These two services offer a range of investment account types and beneficial features. However, they cater to very different customer groups.
Betterment has fewer investment options, but there are no account minimums and it has lower fees on smaller balances, making it an excellent option for new investors. By contrast, Personal Capital appeals to more seasoned investors. It requires customers to have at least $100,000 in investments, but the company offers individual stock investment options and more personalized attention.
We created a side-by-side comparison to help you differentiate between these two robo-advisors and choose the one that’s best for you.
Personal Capital vs Betterment: Feature comparison
|Amount minimum to open account|
|Account fees (annual, transfer, inactivity)|
|Tax loss harvesting|
|Offers fractional shares|
|Ease of use|
|Mobile app||iOS, Android||iOS, Android|
|Customer support||Phone, 24/7 live support, Email, 5branch locations||Phone, Email|
Personal Capital vs Betterment: Management fees
If you’re looking to invest your money, it’s important to pay attention to the fees robo-advisors charge; they can vary widely from company to company. Particularly if you don’t have a lot of money to invest, Personal Capital will be more expensive than Betterment, and it has a higher minimum investment.
Personal Capital’s robo-advisor option requires you to invest at least $100,000 to get started, and charges a tiered annual fee based on the assets you have under management. This fee covers the investment advice you receive, asset custody, and trade commissions:
- Up to $1 million: 0.89%
- First $3 million: 0.79%
- Next $2 million: 0.69%
- Next $5 million: 0.59%
- Over $10 million: 0.49%
That is the only fee you’ll pay with Personal Capital; there are no transfer fees, inactivity fees, or monthly maintenance fees.
For new investors, Betterment provides excellent value with low fees. There is no account minimum to get started, and there is a 0.25% annual management fee for its Digital plan. If you have at least $100,000 invested and want more personalized attention, you can upgrade to Betterment’s Premium plan and gain over-the-phone access to financial experts. The Premium offering has a 0.40% annual management fee.
For investors with more assets, those fees can be even lower. If you have over $2 million under management through Betterment, your annual fee drops — to 0.15% for the Digital plan and 0.30% for the Premium plan — on the portion of your balance over $2 million.
With Betterment, your fee covers the cost of the advice you receive, transactions, trades, and account administration; there are no additional transaction fees.
Another factor to consider is the companies’ expense ratios — how fund’s assets are used for administrative or operational expenses. The higher the expense ratio, the lower your returns will be. Personal Capital reported that its average expense ratio is 0.08%. By contrast, Betterment posted that the average expense ratios of its recommended portfolios was 0.07% to 0.15%. Keep in mind that these expense ratios are dependent on your allocation, and is included solely for comparison’s sake.
Personal Capital vs Betterment: Special features
With both Personal Capital and Betterment, you can connect outside accounts to get a more complete picture of your finances and better plan for your financial goals accordingly.
However, Personal Capital offers more features for seasoned investors, including 24/7 call access, even on weekends. You’re also eligible for advice on 401(k) allocations and insights into your cash flow and spending.
If you have at least $200,000 invested with Personal Capital, you’ll get even more additional features, including two dedicated financial advisors, customizable investments in individual stocks and ETFs and planning services for saving for college. Once you have over $1 million in assets, you’ll get access to estate planning services, too.
By contrast, Betterment lacks many of those features. You can only invest in ETFs and not individual stocks, regardless of your investment level. And, while you can invest in individual investment accounts and IRAs with Betterment, you can’t create a college savings plan.
If you’re looking for a cash management option in addition to your investments, Personal Capital and Betterment both offer high-yield savings options. Note that the top option on our list of the best high-yield savings accounts does offer a better APY than either robo-advisor’s cash management account.
- Betterment Everyday Savings: With Betterment’s Everyday Savings, you’ll earn 2.38% APY (as of Sept. 12, 2019); there are no fees. You’re also eligible for up to $1 million in FDIC insurance; funds are deposited in up to four partner banks, each offering $250,000 in coverage. If you elect to exclude certain partner banks from receiving deposits, your level of FDIC insurance may be lower.
- Personal Capital Cash: Personal Capital Cash has no account minimum, and allows you to earn 2.05% APY (as of Sept. 12, 2019). Your money is also insured by the FDIC, and you’ll get six times the coverage of what most banks offer.
|Personal Capital||Personal Capital Cash||2.05%|
|Betterment||Betterment Everyday Savings||2.39%|
|VioBank||Online Savings Account||2.52%|
Personal Capital’s advantages
- Personalized attention: As a Personal Capital customer, you get access to a 24/7 customer service line and can talk to a financial advisory team. As your investments grow, you will also get access to two dedicated financial advisors.
- Individual securities: With Personal Capital, you can invest in individual stocks, not just ETFs.
- Socially-conscious investment options: Personal Capital’s Socially Responsible Personal Strategy program seeks out companies that are positively impacting environmental, social, and governance issues.
- College planning: Personal Capital offers an Education Planning tool you can use to plan for college costs, including determining how much you need to save each year to pay for school.
- Tax optimization: Personal Capital works to optimize your tax bill by avoiding mutual funds and allocating high-yield stocks and fixed income into tax-deferred or exempt accounts. It also engages in tax loss harvesting, using individual securities to offset gains or qualify for a deduction.
- Low account minimums: Betterment doesn’t have an account minimum, so you can start investing with just $1, rather than having to wait until you’ve saved enough money.
- Fractional shares: Betterment allows you to purchase fractional shares, so you’re able to invest your entire deposit.
- Hands-off investing: Betterment is perfect for investors who want to set-it-and-forget-it. You can make an initial deposit, set up recurring investments, then allow Betterment to do the heavy lifting by rebalancing your account for you based on your risk tolerance.
- Charitable investing: With Betterment, you can donate shares rather than cash to partner charities including UNICEF, Feeding America, Wounded Warrior Family Support, and GiveWell. Not only will you be able to help a worthy charity, but you’ll also avoid the capital gains tax on the sale of your investment.
Personal Capital vs Betterment: Which is best for you?
When it comes to deciding between Personal Capital and Betterment, think about your current financial situation and your future goals.
If you’re new to investing, don’t have much money to deposit or want to be a hands-off investor, Betterment is likely the better choice for you. It offers lower fees, has no account minimum, and completely manages your investments for you. Plus, you can invest in fractional shares, making every dollar work harder for you.
If you have at least $100,000 to invest, and need more personalized attention or assistance with saving for college or estate planning, Personal Capital may be a better fit. Personal Capital has higher fees than Betterment, but you get 24/7 access to support staff, and you can even talk with dedicated financial advisors.
If you’re still exploring your investment options, make sure you check out the best robo-advisors of 2019.