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The pioneer of robo-advising with automatic portfolio management, tax-loss harvesting, and dividend reinvestment—designed for truly hands-off investing.
Betterment is a robo-advisor that automatically builds and manages a diversified ETF portfolio based on your goals and risk tolerance. You answer questions, set a goal, and Betterment handles the rest.
The platform creates a portfolio of low-cost ETFs from providers like Vanguard and BlackRock. Your allocation is automatically adjusted based on your timeline and risk preferences.
For dividend investors, this hands-off approach means all dividends are automatically reinvested and the portfolio stays balanced without any manual intervention.
Every dividend received in your Betterment account is immediately reinvested—no cash sits idle. This automatic DRIP is built into the platform at no additional cost.
Dividends are reinvested according to your target allocation, effectively rebalancing your portfolio with each dividend payment. This is more sophisticated than simple DRIP that buys more of the same security.
You don't need to enable anything—dividend reinvestment happens automatically as part of Betterment's portfolio management.
Betterment's tax-loss harvesting feature automatically sells losing positions to realize tax losses, then immediately buys similar (but not identical) securities to maintain your allocation.
These harvested losses can offset capital gains and up to $3,000 of ordinary income per year. Many customers find that tax savings offset or exceed the 0.25% advisory fee.
Nearly 70% of Betterment customers using tax-loss harvesting covered their taxable advisory fees through estimated tax savings—making the service effectively free or better.
The Digital plan costs 0.25% annually—$25 per year for every $10,000 invested. This is competitive for automated portfolio management with tax-loss harvesting.
High-balance clients get discounts: $1-2 million pays 0.15%, and amounts over $2 million pay just 0.10%.
ETF expense ratios (typically 0.03-0.30%) are charged by fund providers in addition to Betterment's fee. These are deducted from fund returns, not billed separately.
Betterment offers several portfolio strategies: Core (diversified stocks and bonds), Goldman Sachs Smart Beta, Socially Responsible Investing (SRI), and income-focused portfolios.
You can set different goals with different portfolios—aggressive growth for long-term retirement, conservative allocation for near-term goals.
For dividend-focused investors, the income portfolios emphasize dividend-paying ETFs and bonds for regular cash flow.
As of November 2025, Betterment clients can now buy and sell individual stocks and ETFs within the Betterment app. This is a significant change from the pure robo-advisor model.
This means you can now complement your automated portfolio with individual dividend stock picks if desired.
Individual stock trading is commission-free, though these positions won't benefit from Betterment's automatic rebalancing or tax-loss harvesting.
As of December 2024, Betterment's Core portfolio at 90/10 stock/bond allocation returned 12.7% over 1 year, 7.9% over 5 years, and 7.8% over 10 years (net of fees, including dividend reinvestment).
Past performance doesn't guarantee future results, but these returns demonstrate that a diversified, low-cost ETF strategy can deliver solid long-term growth.
The key advantage isn't beating the market—it's consistent, disciplined investing with automatic rebalancing and tax efficiency.
Transparent breakdown of all fees you might encounter.
| Fee Type | Cost |
|---|---|
| Digital Plan | 0.25% annually |
| Premium Plan | 0.40% annually ($100K+ balance) |
| Account Minimum | $0 |
| Trading Commissions | $0 |
| Dividend Reinvestment | Included |
| Tax-Loss Harvesting | Included |
| Rebalancing | Included |
| ETF Expense Ratios | 0.03%-0.30% (varies) |
| High Balance Discount ($1M+) | 0.15% |
| High Balance Discount ($2M+) | 0.10% |
Set your goals and forget it—Betterment handles rebalancing, dividend reinvestment, and tax optimization automatically.
Tax-loss harvesting can generate tax savings that offset or exceed the advisory fee.
Set multiple goals with different portfolios and track progress toward each one clearly.
Betterment is the ideal choice for dividend investors who want a truly hands-off approach. The automatic dividend reinvestment, portfolio rebalancing, and tax-loss harvesting create a sophisticated investment strategy without any manual work. The 0.25% fee is reasonable given the automation and tax benefits. However, if you want to pick individual dividend stocks or have more control over your portfolio, Betterment's traditional model isn't the right fit—though the new individual stock trading feature bridges some of that gap. For pure set-it-and-forget-it dividend investing, Betterment excels.
Compare All PlatformsSee how Betterment stacks up against the competition
More customization with pie-based portfolios, but no tax-loss harvesting.
Read Review →Similar robo-advisor with tax-loss harvesting, different portfolio approach.
Read Review →Fidelity Go robo-advisor is free under $25K, but fewer automatic features.
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