Betterment vs. Acorns for ESG Investing (Review)

Two top robo-advisors, Betterment and Acorns, now offer ESG or Socially Responsible Portfolios. Betterment is the largest robo-advisor, while Acorns is known for letting you save by rounding up your change. We have reviewed over 30 robo-advisor portfolios, and we will help you compare Betterment and Acorns with sustainability in mind.

SustainFi October 19, 2021

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At a glance

  • Both Acorns and Betterment offer good sustainable options. Acorns makes saving easier, but Betterment gives you more investing choices
  • Best for beginners who need help saving: Acorns is easier to use for beginners and lets you save and invest your spare change
  • Best choice of Impact Portfolios: Betterment lets you choose among three Impact Portfolios (Broad Impact, Climate Impact and Social Impact)

Keep reading to learn more.

Minimum investment


Minimum investment


Management fee

0.25% - 0.40%

Management fee

$3-5 / month

ESG option

Three Impact Portfolios

ESG option

ESG (Sustainable) Portfolio

Human advisors

Yes (extra fee)

Human advisors


Round up your change


Round up your change


What is Betterment?

Founded by Jon Stein in 2008, Betterment is the first and most successful robo-advisor judging by assets under management (which reached $29 billion in early 2021). The robo-advisor uses algorithms based on the Modern Portfolio Theory to create the right portfolio to meet your goals, such as saving for retirement or growing your wealth.

Betterment has two service tiers, Digital and Premium. Betterment Digital charges a 0.25% annual fee, and there is no minimum balance. Betterment Premium charges a 0.40% fee, and you need at least $100,000 to get started. In return, you get access to human financial advisors.

🔔 Check out the full Betterment review.

What is Acorns?

Acorns is a robo-advisor that lets you invest spare change from everyday purchases in diversified portfolios made up of exchange-traded funds (ETFs). The company was launched in 2014 by the father and son duo, Walter and Jeff Cruttenden, to make investing accessible to everyone. Acorns has since expanded to retirement and checking accounts.

The robo-advisor grew its assets under management from $3 billion in 2020 to $4.7 billion in 2021. It has over 9 million users. Acorns is best known for having no minimum balances, letting you save your spare change and being beginner-friendly.

🔔 Read the full review of Acorns.

Betterment vs. Acorns: Account Types

Both Acorns and Betterment support:

  • Individual and joint taxable investment accounts
  • Retirement accounts for traditional, SEP, and Roth IRAs, plus rollover IRAs

In addition, Acorns offers custodial accounts (Acorns Early), which let account-holders create UTMA/UGMA accounts for children. Acorns Early is only available if you sign up for the Family Plan.

In contrast, Betterment supports trusts.

💰 The winner: Tie. Both Acorns and Betterment offer enough account types to suit most investors. Acorns also has custodial (UTMA/UGMA) accounts, while Betterment offers trusts.

Betterment vs. Acorns: Checking accounts

Both Acorns and Betterment can set you up with checking accounts.

Acorns offers checking accounts that come with a metal Visa debit card. The card offers free access to over 55,000 in-network ATMs. Your account is FDIC-insured for up to $250,000 and includes fraud protection, direct deposit and mobile check deposit options. Acorns Earn lets you earn bonus investments when you shop with over 350 brands like Apple, Chewy and Sephora.

Betterment offers two cash management accounts:

  • Betterment Cash Reserve, a high yield savings account, is FDIC-insured for up to $1 million and pays a 0.10% APY as of October 2021
  • Betterment Checking Account, a no-fee checking account that comes with a Visa debit card. The account is FDIC-insured for up to $250,000 and reimburses all ATM fees. You can get cash back rewards from thousands of brands like Dunkin, adidas and Walmart

💰 The winner: Betterment. Both Acorns and Betterment offer checking accounts with a debit card, but Betterment gives you a choice of two accounts, one of which earns an APY.

Betterment vs. Acorns: Minimum investment

Both Acorns and Betterment have no minimum investment. Compare this to working with a human financial advisor, some of whom require $250,000 or more to get started.

Although Acorns has no minimum, it will start investing your money when you have at least $5 in your account.

There is no minimum for the Betterment Digital plan. The premium plan, which gives you access to fiduciary financial advisors, requires a $100,000 investment.

💰 The winner: Tie. Both Acorns and Betterment have no minimum investment.

Betterment vs. Acorns: Management fees

Betterment and Acorns have different fee structures. Acorns charges a fixed fee per month, while Betterment charges an annual fee of 0.25% – 0.40% of the assets under management. Neither Acorns nor Betterment charges any account opening fees.

Acorns has two membership plans that cost $3 or $5 a month. As of September 2021, Acorns Lite ($1/month) is no longer offered. The two plans offered today are:

  • Acorns Personal ($3/month), which includes personal investment, retirement, and checking accounts plus a metal debit card
  • Acorns Family ($5/month), which includes all the Personal features plus Acorns Early, which offers investment accounts for kids

The fees are competitive for higher account balances. However, $3-$5/month may be expensive if you have very little invested. If you only have $1,000 in your account and sign up for Acorns Family, you are paying 6% each year. (You could argue that it’s still worth it because Acorns helps you save money you would have spent otherwise.)

In contrast, Betterment charges an annual fee of 0.25% of assets under management ($25 annually on a $10,000 investment). Betterment Digital charges the same management fee for traditional and ESG portfolios. 0.25% is one of the lower fees among full-service robo-advisors. The premium plan costs 0.40%.

💰 The winner: It depends. Because Acorns charges a flat monthly fee, it can be more expensive than Betterment for small account balances and cheaper for larger balances. For example, if you sign up for the Acorns Personal plan, it costs the same as Betterment Digital if you invest $14,400. Acorns is cheaper if you invest over $14,400.

Betterment vs. Acorns: Fund expenses

When you invest through a robo-advisor, you also need to pay the fees of the funds in your portfolio. (They are deducted automatically.) The money goes to the fund manager, not to the robo-advisor company.

The funds in the Acorns ESG Portfolio cost from 0.05% to 0.25% annually (so that, if you have $10,000 invested you pay $5 to $25 to the fund managers each year.) The expense ratio of your combined portfolio will depend on the risk profile you select. For comparison, the Moderately Aggressive Portfolio, which is 80% in stocks and 20% in bonds, costs 0.16% annually.

The funds in the Betterment Broad Impact Portfolio cost from 0.05% to 0.39%. The portfolio with 80% in stocks is comparable to Acorns’ Moderately Aggressive Portfolio (81% is in stocks and 19% is in bonds.) On a combined basis, that portfolio also costs 0.17%.

💰 The winner: Tie. The funds in Betterment and Acorns ESG portfolios cost roughly the same. They are also in line with other robo-advisors with ESG portfolios, like Wealthfront. Note that the overall cost will change if your risk profile changes, but the difference appears small.

Betterment vs. Acorns: Socially Responsible (ESG) Portfolio

Catching on to the ESG investing trend, both Acorns and Betterment offer ESG or sustainable portfolios. Betterment refers to them as the Socially Responsible Investing (SRI) Portfolios or Impact Portfolios. Broadly speaking, ESG portfolios score better on environmental, social, and governance metrics like carbon emissions, worker treatment, diversity and governance.

🔔 Read our ESG investing guide to learn more.

Acorns Sustainable (ESG) Portfolios

The first notable difference is that the Acorns ESG Portfolios invest in more funds. Here are the funds Acorns chooses for its ESG Portfolios:

  • U.S. large-cap stocks: iShares ESG Aware MSCI USA ETF (ESGU), iShares MSCI USA ESG Select ETF (SUSA)
  • U.S. small-cap stocks: iShares ESG Aware MSCI USA Small-Cap ETF (ESML)
  • International developed markets stocks: iShares ESG Aware MSCI EAFE ETF (ESGD)
  • Emerging markets stocks: iShares ESG Aware MSCI EM ETF (ESGE)
  • Short-term corporate bonds: iShares ESG Aware 1-5 Year USD Corporate Bond ETF (SUSB)
  • Long-term corporate bonds: iShares ESG Aware USD Corporate Bond ETF (SUSC)
  • Short-term Treasury bonds: iShares 1-3 Year Treasury Bond ETF (SHY) (not ESG)
  • Long-term Treasury bonds: iShares US Treasury Bond ETF (GOVT) (not ESG)
  • Long-term Treasury bonds: iShares MBS ETF (MBB) (not ESG)
  • U.S. aggregate bonds: iShares ESG Aware US Aggregate Bond ETF (EAGG)

Some of the bond funds are non-ESG because there aren’t enough large funds for each type of asset.

Acorns ESG Portfolios are offered in partnership with iShares, the largest provider of low-cost, sustainable ETFs. ESG Portfolios are designed to perform in line with conventional, Core Portfolios.

Betterment Impact Portfolios

Betterment offers three socially responsible investing options: Broad Impact, Climate Impact, and Social Impact Portfolios. 

Broad Impact Portfolio

Betterment’s general ESG option includes ESG funds for U.S. stocks, emerging and developed markets stocks, and, for non-taxable portfolios, U.S. high-quality bonds. Because of fees or trading limitations, the rest of the portfolio (including U.S. bonds for taxable accounts, international bonds, and emerging markets bonds) is still drawn from conventional ETFs. When tax-loss harvesting is enabled, Betterment adds conventional ETFs for emerging and developed markets stocks. 

The Broad Impact Portfolio includes the following funds:

  • U.S. stocks: iShares ESG Aware MSCI USA ETF (ESGU), iShares MSCI KLD 400 Social ETF (DSI), iShares MSCI USA ESG Select ETF (SUSA)
  • U.S. engagement stocks: Engine No. 1 Transform 500 ETF (VOTE)
  • Emerging markets stocks: iShares ESG Aware MSCI EM ETF (ESGE)
  • Developed markets stocks: iShares ESG Aware MSCI EAFE ETF (ESGD)
  • U.S. bonds: iShares ESG Aware USD Corporate Bond ETF (SUSC), iShares ESG U.S. Aggregate Bond ETF (EAGG) for retirement accounts, iShares National Muni Bond ETF (MUB) for taxable accounts
  • Conventional options for international bonds and emerging markets bonds

The portfolio relies on cheap ESG ETFs from iShares. Betterment uses large ESG ETFs from iShares (BlackRock), especially the iShares ESG Aware MSCI USA ETF (ESGU). While iShares ETFs own fossil fuel companies, they generally contain less energy than conventional alternatives. They also exclude tobacco, thermal coal, and certain weapons manufacturers. 

In July 2021, Betterment added the VOTE ETF, which will try to engage with large U.S. companies to drive change on issues like climate change.

Climate Impact Portfolio

The Climate Impact Portfolio emphasizes the “E” or environmental factors in ESG. This portfolio features a low-carbon footprint stock ETF (CRBN) and ETFs that divest from fossil fuel reserve owners. According to Betterment, carbon emissions per dollar of revenue for the 100% stock Climate Impact Portfolio are half of those of the conventional (Core) Portfolio. The portfolio adds green bonds – bonds that fund environmentally friendly projects – through a green bond ETF. 

To construct this portfolio, Betterment relies on the iShares MSCI ACWI Low-Carbon Target ETF (CRBN). CRBN is an ETF that seeks to include companies with a lower carbon footprint. The ETF provider measures the carbon intensity of each stock by tracking the tons of CO2 emissions per million dollars in sales. (Despite lower carbon intensity, CRBN has energy exposure, including oilfield services provider Schlumberger.)

The remaining half of the stock exposure in the Climate Impact Portfolio is invested in fossil fuel reserve-free ETFs (SPYX for U.S. stocks, EFAX for developed markets stocks, and EEMX for emerging markets stocks). (Despite excluding oil and gas companies with reserves, SPYX includes oilfield services and fossil fuel-powered utilities.)

The Climate Impact Portfolio includes the following funds:

  • Global stocks: iShares MSCI ACWI Low-Carbon Target ETF (CRBN)
  • U.S. stocks: SPDR S&P 500 Fossil Fuel Reserves Free ETF (SPYX)
  • U.S. engagement stocks: Engine No. 1 Transform 500 ETF (VOTE)
  • Emerging markets stocks: SPDR MSCI EAFE Fossil Fuel Reserves Free ETF (EFAX)
  • Developed markets stocks: SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF (EEMX)
  • U.S. high-quality and international bonds: iShares Global Green Bond ETF (BGRN)
  • Non-ESG options for other bonds

The Climate Impact Portfolio is not fossil free. Although the Climate Impact Portfolio is not free of fossil fuels, it does have better ESG scores and less exposure to energy than Betterment’s Core Portfolio, particularly for international stocks.

This portfolio doesn’t take into account social or governance factors (the “S” and the “G” in ESG), leading to lower ESG ratings from ESG rating providers Sustainalytics and MSCI than the Broad or Social Impact Portfolios. 

Social Impact Portfolio

The Social Impact Portfolio adds diversity and inclusion funds. The Social Impact Portfolio adds two impact funds that promote gender diversity and ethnic and racial inclusion. These funds are SPDR SSGA Gender Diversity Index ETF (SHE) and Impact Shares NAACP Minority Empowerment ETF (NACP). These two funds add up to around 8% of the portfolio invested 70% in stocks and 30% in bonds.

  • SHE is a U.S. Stock ETF that includes companies with greater gender diversity in senior leadership. Companies are ranked according to the ratio of women in senior leadership positions; the leaders in each sector are added
  • NACP, a U.S. stock ETF from Impact Shares, uses a scoring methodology from the National Association for the Advancement of Colored People (NAACP). The goal is to provide exposure to companies with strong diversity policies

The Social Impact Portfolio includes the following funds:

  • U.S. stocks: iShares ESG Aware MSCI USA ETF (ESGU), Impact Shares NAACP Minority Empowerment ETF (NACP), SPDR SSGA Gender Diversity Index ETF (SHE)
  • U.S. engagement stocks: Engine No. 1 Transform 500 ETF (VOTE)
  • Emerging markets stocks: iShares ESG Aware MSCI EM ETF (ESGE)
  • Developed markets stocks: iShares ESG Aware MSCI EAFE ETF (ESGD)
  • U.S. bonds: iShares ESG Aware U.S. Aggregate Bond ETF (EAGG), iShares National Muni Bond ETF (MUB)
  • Non-ESG options for international bonds, emerging markets bonds, and inflation-protected securities

🔔 Read the full review of the Betterment Impact Portfolios.

Acorns and Betterment ESG Portfolios Comparison (80% stocks, 20% bonds)

Expense Ratio% of Assets in ESG Funds
% of Assets in Energy
Sustainalytics ESG Rating
Betterment Broad Impact0.17%
7.6 / 103.4 / 5
7.3 / 10
3.8 / 5

Data as of 9/30/2021

We’ve compared Acorns and Betterment Broad Impact ESG portfolios that are roughly 80% in stocks and 20% in bonds. Although Acorns invested 87% of the portfolio in ESG funds and Betterment only 81%, the ratings from ESG rating agencies Sustainalytics and MSCI were comparable.

Neither portfolio is fossil free, although both invest less in energy than non-ESG portfolios. ESG strategies try to perform close to the market as a whole while choosing better companies with lower emissions.

💰 The winner: Tie. Acorns will invest more of your money in ESG funds. But, when we compared the ESG scores between Acorns and Betterment (Broad Impact Portfolio), they were quite close. However, Betterment gives you the choice of three portfolios vs. Acorns’ single sustainable option.

Betterment vs. Acorns: Automatic savings

Acorns lets you save more through automatic round-ups. When you buy something with your Acorns debit card or another linked card, Acorns rounds up your transaction to the nearest dollar and invests the change into your Invest account portfolio. For example, if you just bought a coffee for $3.59, Acorns charges your card for the remaining $0.41 and invests it in the portfolio you’ve chosen.

According to Acorns, the average user invests over $30 a month through round-ups.

You can also set up recurring transfers starting with as little as $5 so that you don’t forget to invest.

💰 The winner: Acorns. Betterment doesn’t offer round-ups.

Betterment vs. Acorns: Tax-loss harvesting

Tax-loss harvesting is a tax reduction strategy that involves selling a fund or stock that has experienced a loss. By realizing this loss, you can offset taxable gains on other investments. The sold fund is replaced with a similar one, maintaining an optimal asset allocation.

Betterment offers automatic tax-loss harvesting at no additional cost at the ETF level. A more advanced tax-loss harvesting strategy, selling individual stocks that have lost money (also called direct indexing), is not available. (If you are interested, you can check out Personal Capital.)

In addition to tax-loss harvesting, Betterment offers Tax-Coordinated Portfolios. To take advantage of that, you need to open both a taxable investment account and a retirement account with Betterment. Betterment will then hold income-earning assets like bonds in your tax-advantaged retirement account and stocks in your taxable account. This will ensure an optimal asset allocation while reducing taxes.

💰 The winner: Betterment. Acorns doesn’t offer tax-loss harvesting.

Betterment vs. Acorns: Human financial advisors

The Betterment Digital plan doesn’t come with access to human advisors, though you can buy a package for an extra fee ($299-$399 for 45-60 minutes). Human advisors are Certified Financial Planners (CFP), the most rigorous certification for financial professionals. CFPs also pledge to be fiduciaries, meaning that they promise to act in your best interest.

Here are some of the packages:

  • Getting Started: $299
  • Retirement Planning: $399
  • Financial Check up: $399
  • College Planning: $399
  • Marriage Planning: $399

Betterment Premium customers get ongoing access to fiduciary financial advisors.

💰 The winner: Betterment. Acorns doesn’t have any human financial advisor options.

Betterment vs. Acorns: Automatic rebalancing

Both Betterment and Acorns will automatically rebalance your portfolio. Automatic rebalancing means that the robo-advisors will buy or sell investments to get to your optimal asset allocation, like 80% stocks and 20% bonds.

Sometimes when one asset class, like stocks, does much better than another one, like bonds, your portfolio may “drift” and become riskier (or less risky) than it should be. Automatic rebalancing solves that.

💰 The winner: Tie. Nearly all robo-advisors now offer this feature.

💰 The Overall Winner

  • It’s very close, so the winner depends on who you are
  • Best for beginners and those struggling to save: Acorns. Acorns Invest is a great option for beginners, especially those who are struggling to save
  • Best for the choice of Impact Portfolios: Betterment. Betterment lets you choose among three Impact Portfolios. In addition, it may be cheaper for low account balances. For an extra fee, you can also get access to human advisors
  • Neither robo-advisor offers advanced customization options. If you want to change up some of the funds in your portfolio or go fossil free, M1 Finance may be the better choice

🔔 Want to compare more options? Read our guide to ESG robo-advisors.

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We compared robo-advisors with an ESG offering based on management fees, ESG portfolio expense ratios, the percentage of the ESG portfolio invested in ESG funds vs. traditional funds, ESG portfolio ratings (from Sustainalytics and MSCI), portfolio exposure to energy, transparency, features like tax-loss harvesting and automatic rebalancing, and access to human advisors.