Stash vs. Betterment [2024]: Is One a Better Option for Your Money?

Learning how to invest money can be a challenge, but many of the best investment apps aim to make the process easier, even for beginner investors. Stash¹ <p>Paid non-client endorsement. The paid partner received cash compensation of up to $150.00 (per cost per action) for providing this endorsement. Compensation creates an incentive for the individual to recommend Stash. Endorsements are not representative of the experience of all clients and are not guarantees of future performance or success. For a representative sample of client testimonials, refer to Apple App Store or Google Play reviews To begin investing on Stash, you must be approved from an account verification perspective and open a brokerage account (“Personal Portfolio”). Promotion offer is subject to <a href="https://lp.stash.com/personal-portfolio-5-first-deposit-offer-promoter/" target="_blank" rel="noopener noreferrer">Terms and Conditions</a>.</p> <p>Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.</p> and Betterment are two of these apps.

Although many of the best brokerage accounts leave you largely on your own to determine what investments to buy, Stash and Betterment work differently. Both apps provide much more help for beginner investors, and they aim to make investing money not just effortless but also actually fun.

They work differently, though, so it's important to understand what each investing app offers when deciding which is best for you.

Stash vs. Betterment

Stash and Betterment are both online platforms that can simplify the investing process.

Betterment does this by actually investing for you. It's a robo-advisor that asks you about your goals and then invests your money in an appropriate mix of assets. Stash doesn't take over the management of your money, but gives you the tools to pick your own portfolio or to let Stash managed a pre-designed portfolio for you, based on your risk profile.

There are actually several differences between Stash vs. Betterment, from the types of accounts they offer to the fees they charge. Here are key things you need to know about each.

Minimum investment	$1	$10 to start investing
Management fees	$3 - $9 per month2 <p class="">Stash offers access to investment and banking accounts under each subscription plan. Each type of account is subject to different regulations and limitations. Stash Monthly Subscription Wrap Fee starts at $3/month. You’ll also bear the standard fees and expenses reflected in the pricing of ETFs, plus fees for various ancillary services charged by Stash and/or the Custodian. Please see the <a href="https://cdn.stashinvest.com/disclosures/StashInvest_Advisory_Agreement.pdf" target="_blank">Advisory Agreement </a> for details. Other fees apply to the bank account. Please see the <a href="https://cdn.stash.com/disclosures/stride-deposit-account-agreement.pdf" target="_blank">Deposit Account Agreement</a>.<br></p>	.25% to .40%
Asset classes	Exchange-traded funds3 <p class="">Before investing in any exchange-traded fund, consider your investment objectives, risks, charges, and expenses.<br></p> and stocks	Exchange-traded funds invested in U.S. and international stocks and bonds
Account types available	Individual taxable account Roth IRA Traditional IRA Custodial Accounts4 <p class="">The adult (or Custodian) who opens the account can manage the money and investments until the minor reaches the “age of majority.” That age is usually 18 or 21, depending on the Custodian’s state. The money in a custodial account is the property of the minor. Money in a custodial account can be used by the parent or legal guardian, but only to do things that benefit the child.<br></p> Online debit account	Individual and joint taxable accounts SEP IRA Roth IRA Inherited IRA Traditional IRA Rollover accounts Trusts High-yield Cash Reserve account5 <p>Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.</p> <p>If you participate in Cash Reserve, you authorize Betterment, on a discretionary basis, to direct Betterment Securities as to the allocation of your funds among one or more Program Banks. Deposits at each Program Bank are insured by the FDIC up to $250,000 for each insurable capacity (e.g. individual or joint). In aggregate, funds deposited into Cash Reserve are eligible for up to $2,000,000 (or $4,000,000 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to eight Program Banks). Even if there are more than eight Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $2,000,000 (or $4,000,000 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. Although certain types of accounts, such as trust accounts may be eligible for additional FDIC insurance based on the number of beneficiaries, funds will be allocated to each Program Bank in such a way that provides up to $250,000 of FDIC insurance for individual accounts, $500,000 of FDIC insurance for joint accounts, and $250,000 of FDIC insurance for trust and other corporate account types, in each case per Program Bank. In the event you maintain an individual or joint Cash Reserve account and are a beneficiary of a Cash Reserve trust account, Betterment does not provide FDIC insurance based on your status as a beneficiary. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full <a href="https://www.betterment.com/legal/cash-reserve">terms and conditions</a> and <a href="https://betterment-prod-cdn.s3.amazonaws.com/agreements/Betterment_LLC_ADV_2023_09_28.docx.pdf">Betterment LLC's Form ADV Part 2</a>.</p> Checking account
Features	Online resources, Stock-Back rewards®6 <p>Stash Banking services provided by Stride Bank, N.A., Member FDIC. The Stash Stock-Back® Debit Mastercard® is issued by Stride Bank pursuant to license from Mastercard International. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Any earned stock rewards will be held in your Stash Invest account. Investment products and services provided by Stash Investments LLC and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.</p> debit card, automated saving and investing tools	Automatic rebalancing, tax-loss harvesting, unlimited calls with a financial advisor for an additional cost with a digital investing account
Distributions	Withdrawals to your bank account Early withdrawal penalties may apply to traditional and Roth IRAs if you are not 59 1/2 or older	Withdrawals to your bank account Early withdrawal penalties may apply for SEP, IRA, and 401(k) accounts before 59 1/2
Taxes	No automatic tax-loss harvesting	Tax-loss harvesting is available
Best for...	Investors who want to choose their own investments with some guidance	Investors who want to take a hands-off approach to money management
	Visit Stash Paid Non-Client Promotion FinanceBuzz doesn’t invest its money with this provider, but they are our referral partner. We get paid by them only if you click to them from our website and take a qualifying action (for example, opening an account.)	Visit Betterment Paid Non-Client Promotion Paid non-client of Betterment. Views may not be representative, see more reviews at the App Store and Google Play Store. No guarantee of future performance or success is being made. Learn more about this relationship.

How does Stash work?

Stash allows you to get started investing with as little as $1⁷ <p> </p><p>Paid non-client endorsement. The paid partner received cash compensation of up to $150.00 (per cost per action) for providing this endorsement. Compensation creates an incentive for the individual to recommend Stash. Endorsements are not representative of the experience of all clients and are not guarantees of future performance or success. For a representative sample of client testimonials, refer to Apple App Store or Google Play reviews To begin investing on Stash, you must be approved from an account verification perspective and open a brokerage account (“Personal Portfolio”). Promotion offer is subject to <a href="https://lp.stash.com/personal-portfolio-5-first-deposit-offer-promoter/" target="_blank" rel="noopener noreferrer">Terms and Conditions</a>.</p><p> </p><p>This material is not intended as investment advice and is not meant to suggest that any securities are suitable investments for any particular investor. Investment advice is only provided to Stash customers. All investments are subject to risk and may lose value. All product and company names are trademarks ™ or registered ® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.</p> <p>Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.</p> <p>What doesn’t count: Cash withdrawals, money orders, prepaid cards, and P2P payment. See full terms and conditions.<br><br>Fractional shares start at $0.05 for investments that cost $1,000+ per share.</p> . You can choose to buy individual stocks or ETFs with your money, and Stash guides you through choosing investments that make sense for your situation. With a Stash account, you have the option to purchase fractional shares rather than being restricted to full ones.

Investors will also have the option to invest in Stash's Smart Portfolios. These carefully designed portfolios enable you to be diversified and regularly invest in your portfolio without having to make all your own investment decisions. Stash will also rebalance your portfolio for you, as well as reinvest your dividends.

Where Stash really sets itself apart is both its investor education and its automated process for putting money into your account. Stash offers some innovative features to encourage you to invest more, including rounding up purchases you make with your Stash debit card and investing the difference, or analyzing your spending patterns and moving over cash you can spare into your investment account.

One of the most innovative, however, is its Stock-Back® plan. If you have a Stash bank account, you'll get a debit card that gives you at least .125% stock back when you make purchases with qualifying merchants. This is an alternative to cash back because your rewards for using the card are invested either in the places you shop or in a diversified fund if you make purchases at local stores that don't sell stock to the public.

Read our Stash review to learn more about how Stash works and whether it's right for you.

How does Betterment work?

Betterment is a little different than Stash because you give up much more control over money management. As a robo-advisor, Betterment asks you questions about your investing timeline and risk tolerance and uses the information you provide to invest your money for you.

Because the money-management process is automated, you'll pay a relatively low fee for managing your money — unlike with a human investment advisor. Your invested cash is put into a mix of ETFs, which are funds that own shares of many different U.S. and/or international companies as well as bonds. And your investment portfolio is balanced automatically as Betterment changes your investments over time to make sure you own a mix of assets that match the investing profile you create.

Betterment also offers some additional special features that can help you make the most of your investment dollars, such as the option to get financial advice from a human advisor. It also offers tax-loss harvesting, which can reduce the taxes you pay on investment gains. 

Read our Betterment review to learn more about the site's key features and find out full details about how it works.

What both investment platforms excel at

Both Stash and Betterment excel at making investing accessible to people without a lot of investment experience or a lot of money. Although they approach this differently, they both accomplish this goal very well and make it possible for everyday people to start investing without spending hours poring over company earnings reports.

Both Stash and Betterment don't require you to have a lot of money to get started — in fact, you can begin investing with either platform for just a few dollars. This makes both platforms a decent choice for young people who may not have a lot of spare funds, as well as new investors who are just getting their feet wet in the market.

There are great online and mobile apps available with both sites that easily let you track how your portfolio is performing. Both the Stash and Betterment mobile apps are available for Android and Apple devices. Their intuitive, easy-to-use platforms could make investing more fun. And both ask easy-to-understand questions to guide you toward the right investments — though Betterment takes control over your dollars in response to your answers, whereas Stash just makes suggestions.

6 important differences between Stash and Betterment

Although Stash and Betterment have some similarities, there are six big differences that set each company apart. Here are the biggest differences you need to know about when deciding which is right for you.

1. Investing process

Stash gives you guidance based on your answers to questions, but it does not necessarily pick investments for you. If you want to manage your own portfolio, then it won't rebalance your portfolio for you — you'll need to make sure you maintain the right mix of investments over time. That said, you also have the option to invest in the Smart Portfolios, which handle your investment choices for you and do rebalance.

As a robo-advisor, Betterment automates your investments. You don't have to worry about picking companies or funds to invest in, and you don't have to reallocate your assets over time.

2. Investment options

When you invest with Betterment, your money is put into a mix of ETFs. These are traded like stocks, but they don't buy you an ownership stake in just one individual company. Instead, ETFs track financial indexes or provide exposure to particular industries and sectors by investing in many companies within that sector or all the companies that make up the index. ETFs can offer diversification, though all investments come with risk.

With Stash, you have the option to buy ETFs but also to buy shares of individual companies. Because you can buy fractional shares, you can also start investing without much money. For example, if you want to buy Apple shares, you can buy a partial share for as little as $1. Buying shares of companies is riskier, but if the company performs especially well, you can beat out the returns that ETFs generally provide.

3. Account types

Betterment offers more account types than Stash does. You can invest in SEP individual retirement accounts with Betterment, whereas Stash offers only traditional and Roth IRAs for retirement investing at this time. Betterment also offers joint taxable accounts, while Stash does not currently offer this option.

4. Fees

Betterment charges a fee equal to a percentage of your Betterment account balance, which is either .25% for the Digital Plan and .40% for the Premium Plan. The Premium version comes with unlimited calls with a financial advisor.

Stash charges a flat monthly fee, which means those who have very little money to invest effectively pay a larger percentage. Stash Growth costs $3 per month. You can open a personal investment account and invest for retirement with this plan. Stash+ costs $9 per month, and offers two custodial accounts, as well as access to retirement and custodial accounts.

5. Other financial services

Betterment provides a cash account and checking account in addition to investment accounts. (If you’re interested in learning more about its checking account, read our Betterment checking review.) Stash doesn't provide high-yield savings but does offer a debit account that comes with a Stash debit card that gives you access to Stock-Back® rewards.

6. Techniques to help you save

Stash offers many more tools to automate the process of saving money. In addition to Stock-Back® rewards that let you earn shares of stocks by using your debit card to make purchases, you can also opt to round up all purchases with your debit card and move the spare change to your investment account. Or you can sign up to have Stash assess your spending patterns and move money over when it detects you have extra.

Betterment doesn't use these techniques to help you save, so you'll need to be more disciplined about manually moving over money yourself.

Which investment platform should you choose?

Ultimately, your decision should be guided by one key fact: Do you want to manage your own investments or have a robo-advisor manage them for you?

All the rest of the differences matter — especially the different fee structures — but you ultimately cannot use Betterment to buy individual stocks. And because the primary goal here is to invest (rather than to earn rewards or use a high-yield savings account or move money to your account automatically), you need to decide based on the type of investor you want to be.

FAQs

Is Stash or Betterment best for you?

Ultimately, both Stash and Betterment can be good tools to help you learn how to invest money in the stock market. You must consider your financial goals, risk tolerance, interest in investing, and other details about your individual financial situation to choose the best investment app for you. Or, because you can get started with Betterment for only $10 and Stash for $1, you could always try them both out to see which ends up being a better fit. If you are interested in learning more about your options, check out our picks for the best brokerage accounts.