Acorns Vs Robinhood Vs Betterment Vs M1 Finance

DISCLOSURE: THIS POST MAY CONTAIN AFFILIATE LINKS,MEANING That I GET A COMMISSION IF YOU DECIDE TO MAKE A PURCHASE THROUGH MY LINKS, AT NO COST TO YOU. PLEASE READ FULL DISCLOSURE HERE

So, which stock trading and investing app is the best for you, Acorns or Robinhood or Betterment or M1 Finance?

What is the main difference between Acorns, Robinhood, Betterment, and M1 Finance?

How do you actually decide which stock trading and investing app is the right one for you?

In this detailed comparison review, I am going to compare everything from fees, platform features, investment products to customer reviews, and customer support to help you make an informed decision.

What To Look For In A Stock Investing App

So, what do you look for in a stock trading and investing app? Here’s a list of factors that you should consider:

• What type of investment assets can you trade and invest in? (e.g. stocks? ETF? options? crypto?)
• What account types can you open? (e.g. brokerage account, IRAs, etc)
• Is there any minimum balance?
• Is it easy to use the platform?
• Does it provide automated investment services (i.e. robo-advisor)?
• What are the fees & commission?
• How good is the customer support as well as customer review?

Before we go on and compare Acorns, Robinhood, Betterment, and M1 Finance in all these aspects, you first need to know the different types of stock trading and investing apps.

Here are the four main types:

• Micro-investing app: allow you to invest in a super small amount of money by buying fractions of shares (e.g. Acorns)
• Online brokerage: allow you to trade and invest stocks through its mobile app (e.g. Robinhood)
• Online robo-advisor: provide automated, algorithm-driven investment services (e.g. Betterment)
• Online robo-advisor and brokerage hybrid: you choose your own stocks and funds, then it helps you automatically re-balance your portfolio based on your pre-defined asset allocation (e.g. M1 Finance)

Acorns

Acorns is a micro-investing app that automatically helps you invest your spare change.

How does it work?

First, you need to link Round-Up accounts (i.e. your checking accounts, debit cards or credit cards) to your Acorn account.

There is no limit to how many checking accounts, debit cards, and/or credit cards you can link as Round-Up accounts.

Once it’s linked, Acorns automatically rounds up your everyday purchases to the next dollar and invests the spare change for you.

For example, when you spend $15.10 on dinner with your credit card, Acorns will automatically round up your purchase to the next dollar (which is $16 in this case) and take the round-up of $0.90 and save it.

When your Round-Ups across your linked accounts reach at least $5, Acorns will transfer that amount to begin investing for you.

So, how does Acorns invest your money?

It automatically helps you invest in a portfolio of ETFs.

Your investments are diversified across more than 7,000 stocks and bonds, and Acorns automatically re-balances your portfolio to stay in its target allocation.

So, to sum it up, Acorns automatically helps you invest your spare change in ETFs.

	Pros	Cons
Acorns	Low minimum deposit IRA accounts Recurring deposit	No stock trading Little control over your investment Limited investment options High fees for small accounts Spare change investing won’t make you lots of money

Robinhood

Now, what about Robinhood?

Robinhood is an online brokerage that works just like your traditional brokers, but it does not have any physical retail locations.

So, what types of investments can you buy on the Robinhood app?

You can make trades in stocks, ETFs, gold, options, and cryptocurrencies.

If you don’t have a lot of money to get started, here’s good news.

Robinhood allows you to invest in fractional shares.

It means that you don’t have to buy one whole share – only a fraction of it.

Let me give you an example.

Google share is trading at around $1818 per share as of the time of my writing.

To buy Google shares would cost you more than one thousand dollars.

With fractional share investing, you can own parts of a whole share.

It gives you more flexibility to diversify your investment portfolio and reduce risk.

So, to sum it up, you can buy and sell stocks, ETFs, gold, options, and cryptocurrencies through Robinhood app.

	Pros	Cons
Robinhood	zero commission for trading stocks, options, and crypto Recurring investment	Buy only (no short-sell) Not best execution price Lagging market data Limited order types  Limited research & analytics tools No education resources

Betterment

Now, let’s look at Betterment.

Betterment is a robo-advisor.

What does that mean?

It means that Betterment will automatically manage your money and invest it in a recommended portfolio, depending on what you are investing for and when you want it.

Betterment will handle the trading and rebalancing for you.

Basically, you don’t have to do anything at all.

So, what does Betterment invest your money in?

Betterment helps invest your money in stocks and bonds in the form of low-cost and index-tracking ETFs.

Below is a list of stock and bond index ETFs that Betterment Portfolio invests in:

• Vanguard Total Stock Market ETF
• Vanguard Value ETF
• Vanguard Mid-Cap Value ETF
• Vanguard Small-Cap Value ETF
• Vanguard FTSE Developed Markets ETF
• Vanguard FTSE Emerging Markets ETF
• iShares Short Treasury Bond ETF
• iShares National Muni Bond ETF
• iShares Core U.S. Aggregate Bond ETF
• iShares JP Morgan USD Emerging Markets Bond ETF

You can see that it includes both US and emerging markets stocks and bonds.

For stocks, it has value stock ETFs as well as more volatile small-cap (i.e. high growth) stock ETFs.

So, depending on your goals, chosen portfolio strategy set your goals, choose a portfolio strategy and see the holdings at any stock-to-bond allocation you choose.

	Pros	Cons
Betterment	No minimum balance for Digital Investing A good mix of ETF-based portfolios recommended and automatically managed for you  Investment, IRA & Trust accounts available High yield cash account Goal-based savings and investing tools Tax harvesting Option to talk to CPF professionals	No stock trading Limited investment options (0nly stock and bond ETFs) Miss out on high growth stocks  Annual fees for its robo-advisor

M1 Finance

Lastly, let’s take a look at M1 Finance.

First of all, M1 Finance is a hybrid of robo-advisor and traditional brokerage.

What does that mean?

It means that if you want everything taken care of for you, you can do it with M1 Finance. 

But, if you choose to manage your own investments, you can do that with M1 Finance as well.

So, how does M1 Finance robo-advisor work?

M1 Finance lets you use “Pie” to build your investment portfolio.

Here’s how it works.

Step 1: Simply select your investments (i.e. stocks or ETFs) and add them to your “Pie”.

Each holding will represent one “slice.”

Step 2: Set the target weight of each slice.

These percentages correspond to the portion of your overall portfolio.

Just fund your “Pie”, and money automatically flows into your investments to align with your target asset allocation.

Step 3: M1 Finance automatically re-balances your portfolio as you continue to fund your portfolio.

What I like this “Pie” concept is that it lets you easily visualize portfolio performance.

Slices that outperform their target weight will grow, while underperforming slices will shrink.

At any time, you can add, remove, or edit slices.

So, can you trade stocks with M1 Finance?

Yes, you can, but here’s the catch.

You cannot buy or sell stocks any time during the market open.

Instead, M1 Finance is only trading one time or two times per day, depending on whether you are eligible to trade in the second window.

The reason why M1 Finance only has one morning trade window and one afternoon trade window is that it helps keep M1 Finance’s management fees low and therefore keep the basic M1 Finance Invest Account free.

The trade window is the window of time each weekday when M1 Finance makes all trades for user accounts.

Here’s an example of how it works:

Let’ say you only have a morning trade window, all your trades will be executed by M1 in the morning at the same time together with all other trades from other user accounts.

M1 Finance‘s trade window begins at 10 am EST every day the NYSE market is open and runs until all orders have been completed.

So, you cannot choose the exact timing of your trades.

If you are a day trader that buys and sells shares frequently throughout the day, then this platform is not right for you.

But if you are investing for the long term, then this is a good platform for you because the timing of trades is less important.

	Pros	Cons
M1 Finance	zero commission for buying stocks and ETFs zero fees for automatically re-balancing your portfolio You can either choose your own investments or invest passively in  its expert portfolios Investment, IRA & Trust accounts available High yield cash account	Only two trade windows, so not suitable for day trading No mutual funds, futures, options, Forex, and Crypto No tax harvesting feature Limited charting and analysis tools

Acorns Vs Robinhood Vs Betterment Vs M1 Finance

(1) Fees & Commissions

	Fees & Commissions
M1 Finance	zero commission to buy stocks & ETFs no additional transaction fees to buy and sell securities no additional fees for depositing or withdrawing no additional cost to rebalance your portfolio automatically
Robinhood	zero commission to buy US-listed stocks, ETFs, and options no additional fees for depositing or withdrawing
Acorns	Lite Plan ($1/month) : Invest Account Personal Plan ($3/month): Investment, Retirement & Checking Account Family Plan ($5/month): Investment, Retirement & Checking Account + Investment Account For Kids
Betterment	Digital Investing Plan (0.25% annual fee with zero minimum balance): Robo-Advisor + Checking & Cash Reserve Account Premium Investing Plan (0.40% annual fee with $100,000 minimum balance): All features of Digital Investing + unlimited consultation with CFP professionals

(2) Account Types & Minimum Balance

	Account Types	Minimum Balance
M1 Finance	Individual account Joint account IRA Trust Checking account	$100
Robinhood	Trading account Checking account	$0
Acorns	Checking account Investment account IRA	$5
Betterment	Individual account Joint account IRA Trust Checking Account	$0 for Digital Investing $100,000 for Premium Investing

---

Which One Is Right For You?

So, which stock investing app is right for you, Acorns, Robinhood, Betterment, or M1 Finance?

If you are a complete beginner and have very little money to start investing with, you might want to consider Acorns.

But, if you are a passive investor who wants to grow your wealth over the long term and save for retirement, then you can consider M1 Finance and Betterment. 

The difference between M1 Finance and Betterment is that M1 Finance charges zero fees for using its automatic portfolio re-balancing while Betterment charges an annual fee of 0.25%. 

Other than that, I prefer M1 Finance to Betterment because you get more flexibility and more investment options.

If you want to buy individual high-growth stocks or a particular ETF, you can do that with M1 Finance with zero commissions. 

But, with Betterment, you cannot buy individual stocks or ETFs. 

Instead, Betterment recommends a portfolio based on your goals and risk tolerance and automatically re-balance your portfolio for you.

Currently, Betterment realizes that experienced investors might want more control over their investments.

So, it is rolling out features to let you adjust the asset allocation ratios on its recommended portfolios. 

But personally, I don’t think this gives me enough control and options on what I want to invest in. 

Plus, I don’t like the annual fees that it charges for its robo-advisor. 

Here’s why.

On top of Betterment’s annual fee, you still have to pay for the ETF management fees every year. 

These fees might look small to you, but it can significantly reduce your investment returns over the long term.

For Robinhood, if you are looking to trade stocks, then there are other better stockbrokers with more powerful trading platforms, better execution, more advanced charting tools.