Lets discuss Betterment and their 2.69% savings account, and whether or not this could be worth it - enjoy! Add me on Instagram: GPStephan
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Betterment is what’s called a “Robo Advisor,” which asks you questions based on your savings, earnings, and investing goals…and then they’ll build you a portfolio tailored to your situation. This is perfect for beginners, who are often overwhelmed by all the investment options out there, and just want a simple, easy approach to making their money make more money.
In terms of WHAT Betterment invests in, it’s pretty much a broad selection of index funds through Vanguard, along with a few other ETFs.
When it comes to this, Betterment charges you a 0.25% Management Fee on your money. And I’m personally NOT a fan of 0.25% management fees. This fee is over 6x HIGHER than what Vanguard charges for their VTI fund.
Now, I will admit…Betterment has ONE advantage over Vanguard, because they can automatically do what’s called Tax Loss Harvesting. In a PERFECT scenario, the tax benefits from tax loss harvesting COULD pay for their 0.25% management fee and make it worth it.
But in terms of their savings account:
There are zero fees and zero minimum balances. Money in this account is also FDIC insured up to $1 million dollars, which they’re able to do by spreading your money throughout several partner banks.
However, in order to unlock the 2.69% interest rate, you’ll need to sign up to be on their new checking account waitlist. But for that 2.69% interest, their fine print states this is only a promotional offer until December 31, 2019. That means, pretty much by the time I post this video, you can only get about 5 months worth of this interest rate…before there’s a chance they’ll discontinue it and lower their payout.
Now of course, they make it clear this interest rate is not guaranteed and may change at any time…and in their defense, Wealthfront can chose to lower it’s 2.57% at any time, as could any other bank…so if you DO decide to go to with Betterment and their 2.69% account, just understand that it might not be permanent, and to manage your expectations.
I see this as a decent move from Betterment to increase attention to their platform, and if people move their money over to a savings accounts, they’re THAT much more likely to then invest with Betterment. And then from that, Betterment is likely to receive a .25% management fee to help offset their cost.
Really, at the end of the day, this is just about customer acquisition - and in order to gain a stronger audience, they MUST go above and beyond in order to stand out, which they’ve done with their 2.69% savings account. But just remember, in my own opinion, paying a .25% management fee is way too high compared to MANY of the other alternatives out there…and the 2.69% interest rate IS absolutely incredible, but it’s not guaranteed to last…and that small difference is something VERY important that everyone should understand, just to be able to manage your expectations of what to expect.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
Second Channel: https://www.youtube.com/channel/UCa-ckhlKL98F8YXKQ-BALiw
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF
Get 2 Free Stocks on WeBull when you deposit $100 (Valued up to $1000): https://act.webull.com/k/Vowbik9Tm5he/main
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
Betterment is what’s called a “Robo Advisor,” which asks you questions based on your savings, earnings, and investing goals…and then they’ll build you a portfolio tailored to your situation. This is perfect for beginners, who are often overwhelmed by all the investment options out there, and just want a simple, easy approach to making their money make more money.
In terms of WHAT Betterment invests in, it’s pretty much a broad selection of index funds through Vanguard, along with a few other ETFs.
When it comes to this, Betterment charges you a 0.25% Management Fee on your money. And I’m personally NOT a fan of 0.25% management fees. This fee is over 6x HIGHER than what Vanguard charges for their VTI fund.
Now, I will admit…Betterment has ONE advantage over Vanguard, because they can automatically do what’s called Tax Loss Harvesting. In a PERFECT scenario, the tax benefits from tax loss harvesting COULD pay for their 0.25% management fee and make it worth it.
But in terms of their savings account:
There are zero fees and zero minimum balances. Money in this account is also FDIC insured up to $1 million dollars, which they’re able to do by spreading your money throughout several partner banks.
However, in order to unlock the 2.69% interest rate, you’ll need to sign up to be on their new checking account waitlist. But for that 2.69% interest, their fine print states this is only a promotional offer until December 31, 2019. That means, pretty much by the time I post this video, you can only get about 5 months worth of this interest rate…before there’s a chance they’ll discontinue it and lower their payout.
Now of course, they make it clear this interest rate is not guaranteed and may change at any time…and in their defense, Wealthfront can chose to lower it’s 2.57% at any time, as could any other bank…so if you DO decide to go to with Betterment and their 2.69% account, just understand that it might not be permanent, and to manage your expectations.
I see this as a decent move from Betterment to increase attention to their platform, and if people move their money over to a savings accounts, they’re THAT much more likely to then invest with Betterment. And then from that, Betterment is likely to receive a .25% management fee to help offset their cost.
Really, at the end of the day, this is just about customer acquisition - and in order to gain a stronger audience, they MUST go above and beyond in order to stand out, which they’ve done with their 2.69% savings account. But just remember, in my own opinion, paying a .25% management fee is way too high compared to MANY of the other alternatives out there…and the 2.69% interest rate IS absolutely incredible, but it’s not guaranteed to last…and that small difference is something VERY important that everyone should understand, just to be able to manage your expectations of what to expect.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
Thank you for the content!
Doesn't wealth front do the same thing
And once again Graham pulls through with good info ❤
Idk if this video is irrelevant now since it’s old but fees like that are extremely common across brokerage firms and Betterment’s fees are kinda fair considering that there are no account minimums and it makes the portfolio for you
Is there a more affordable way to do a Roth option though? (Excluding employer sponsored plans)
Okay so what app do you recommend that is similar to betterment? 🤔
2.69% interest v 8.5% inflation…marvelous.
I'm 19 & still learning how the ROTH IRA and investing works. I started using Fidelity but then I came across a video about the Betterment ROTH IRA and started thinking that I had made a mistake by using Fidelity. THEN I tried to see if Graham made a video about Betterment and NOW I feel better about my Fidelity ROTH IRA. Thanks again, Graham!!!
Betterment is a roboadvisor with rebalancing to maximize profits
I have come to same conclusion. Why am I going to pay money now, for something that just might possibly benefit me later. I would also need to invest the tax savings to get the benefit. This is way too much work. No thanks. Wealth is not built by tax harvesting. It is built by long term holds on investments.
Good day Graham. My question is, when are you going to speak on which of these investment institutions or apps will best suit someone 50 plus years?
Thanks for EXPOSING Betterment lol.
Watching this video in 2021. I'm definitely in the "can't be bothered club" but at least I'm saving in a Roth IRA.
My problem with vanguard is they never answer the phone. I think they’re too small to take care of their large customer base
I don't like betterment, the app has zero functions, does not even show you where the money is invested !
why such a big deal for $25 per year if it adds additional features !
What other apps
Hulk smash like
I don't have a job buy I can still invest money though but they won't accept me
Is it possible to open a tax advantage college fund within any of these Robo investing apps? I believe it is called a 501 3(b) plan?
What about SigFig?
So, you are worried about $25 on $10,000 fee, per year?? You have no business investing.
Please review Sofi
What about making a Roth IRA with betterment
Is this still valid in 2021?
good point on the fee bro
smart guy!
I tjink its a bit missleading when he says "youre paying more foe the exact same thing". Its true that they invest into Vanguard but they invest in other things as well to diversify your money.
i heard tinder and finally understood stocks
I wish I saw this one year ago. That rate dropped from %2.69 to %0.40. So it was all BS to lure people in
So…. I feel pretty burned by Betterment right now. Not only is the APY now in the 0.40% range, but I have been waiting a full nine business days for a simple transfer from Savings to Checking, within the Betterment app. I wanted to check out the roboadviser, so i dropped a hundred bucks in. The app wouldn't allow a transfer from savings into an investment account, so i transferred the hundred to checking. That was on Christmas Eve and I am writing this on January 7th. The app isn't showing the pending amount and I just think the whole thing is a joke. I called customer service a few days ago and was informed that new deposits can be held for up to six business days. Again, it's been nine! As soon as this clears, I am pulling out and closing this account to deal with a legitimate broker.
i know fully well cause i use valuesstock to invest. I get 20% of my investment weekly. cool passive legit income. i have made $30000 so far with valuestock@gmail,com
Not everyone has the knowledge of which funds or how to even allocate funds, and this is the main reason they delay investing for years.
Cool beans ✅
I guess my follow up question is: Betterment doesn’t just invest in VTI. It invests in a myriad of ETFs, both stocks and bonds. Would that diversification and tax loss harvesting be with the fee?