Betterment and Fidelity Go are two excellent robo-advisors. Investing is a well-liked method to allocate your funds according to your risk tolerance and the moment's needs. Betterment, one of the best independent robo-advisors, won the Bankrate award for best robo-advisor. Meanwhile, Fidelity Go, the well-known robo-advisor service from Fidelity Investments, also scored highly in Bankrate's industry analysis.

What is better Fidelity or Betterment? Comparative analysis.

Robo-advisors create portfolios of low-cost stock and bond funds based on your needs. Once your portfolio is set up, you can add more money, and the robo-advisor will buy the investments. It's easy to create a portfolio; the robo-advisor handles the rest. The best robo-advisors also include tax loss recovery and a cash control account.

One benefit of using a robo-advisor is that it offers a professionally managed, low-cost investment portfolio. Who is better than Fidelity? Or Is Betterment really worth it? Furthermore, the top robo-advisors charge a lot less than a typical human advisor.

This is how Betterment and Fidelity Go, two of the leading players, compare to one another.

Portfolio management

Accountability, Credibility, and Being open offer excellent portfolio management, but Betterment goes above and beyond.

The first step towards improvement is understanding your financial goals and allowing you to arrange your portfolio according to them. Instead of holding assets that would be better employed for long-term objectives (like retirement), you could set up investments that would be appropriate for short-term goals (like a down payment).

Betterment creates a portfolio based on when you need the money and how much risk you can take. It provides 13 asset classes, bonding, and stocking among them. Betterment can arrange everything for you, but it also offers a range of options, including trading portfolios, ethical funds, all-cash and all-bond portfolios, bright beta funds, and technology strategies. In addition, should you want to make additional adjustments, you can alter the funds' values in your portfolio.

Your portfolio is managed daily by the robo-advisor, who makes adjustments if the investments deviate from the target ratios by more than 3-5%. You can talk to advisors about your plans and portfolio if you select Betterment's premium service and have the required $100,000.

Based on your financial goals and risk tolerance, Fidelity Go will allocate you to one of seven portfolios, ranging from moderate (more bonds) to ambitious (more stocks). However, unlike some competitors, you will only be able to offer one goal. The four primary asset classesbonds, cash, foreign stocks, and U.S. stocksare represented by nine funds. Your portfolio is built using fee-free Fidelity Flex funds as part of the Go program.

You will only have immediate access to a Fidelity financial advisor if you are a new customer and can fund your account with up to $25,000. Once you cross that threshold, though, you can book as many 30-minute consultations as you'd like with professionals who can help you plan. However, you can contact Fidelity's top customer service agents with general questions. Fidelity monitors your account daily and modifies your portfolio as needed.

Fund and management fees

Robo-advisors typically charge two main fees: an ETF fee that goes to the fund company and a management fee that goes to the advisor. Betterment may first seem to offer lower management fees when all the costs are added up, but the competition is more intricate than you may have thought.

First, let us examine the headline figures: For customers with a maximum balance of $20,000, Betterment charges $4 per month (you can avoid the cost if you set up an annual deposit of $250). The company pays a yearly fee of 0.25 percent of funds for mostly digital services. With Fidelity Go, the first $25,000 in assets are free; after that, there is a 0.35 percent fee.

In practical terms, what does that mean?

• A $10,000 annual balance at Betterment would cost $48 (or possibly $0), but at Fidelity Go, it will only cost $0 a year.
• Compared to $150 at Betterment, a $60,000 at Fidelity Go will cost $122.50 annually. (The $35,000 charge times the upper limit of 0.35 percent over $25,000.)
• Betterment charges 0.40 percent of assets annually, or $40 for every $10,000 invested, for its premium plan, which gives access to advisors who hold the CFP designation.

It would help if you thought about the cost of investment funds. Betterment offers funds in their average portfolio that charge $7, or 0.07 percent, annually for every $10,000 invested. No extra fees are associated with using Fidelity's funds in the interim.

For Fidelity and Betterment, the headline rates for fund expenses and management are 0.35 percent and 0.32 percent, respectively. Of course, to obtain a trustworthy direct comparison, you'll also need to consider Fidelity's $0 fee for the first $25,000 in assets.

Tax plan

Betterment's tax strategy service consists of two parts, which makes it a more complete choice that could result in cost savings.

First, a separate robo-sells lost investments using an automated tax-loss collection mechanism to get a tax advantage. Every day, the app searches for possible advantages and assists you in avoiding short capital gains, which are usually liable to higher tax rates. The automatic method is more advanced than what human advisors can handle. Betterment claims this feature can increase your after-tax gains by 0.77 percent annually.

Second, Betterment also uses a tax-coordinated portfolio to lower taxable profits. It changes the assets allocated to different portfolios; for instance, highly taxed assets could be put in an IRA or another tax-advantaged account. Betterment estimates that this feature might raise your refunds by 0.48 percent annually, or about 15 percent over 30 years.

Fidelity Go's tax scheme, however, is simple. The robo-advisor replaces ordinary bond funds with tax-free municipal bond funds in its clients' taxable accounts. If your portfolio is aggressive, with a high proportion of shares and little to no investment in bonds, this feature will only be of limited assistance to you. This is because a bond ratio is necessary.

Account for cash management

Betterment and Fidelity are strong rivals. Navigate to the accounts for cash management. Both have many features and strong accounts, but Betterment's is better because of the interest it pays on cash holdings.

Betterment's cash management account is divided into two accounts: one for saving and the other for spending. The Pay Preserve beneficial savings account has a variable rate, but it's still competitive, and the robo-advisor usually gives one of the higher sums. Customers can open accounts with no minimum balance, and the FDIC insures individual accounts up to $2 million. If you'd like, you can even access the account without using Betterment's investment services.

On the other hand, there are no costs associated with Betterment's checking accountnot even for basic accounts or overdraftsand you will be reimbursed for any ATM and foreign transaction fees. A cash-back debit card, rewards programs, and up to $250,000 in FDIC protection for each account are included.

It is necessary to open a different Fidelity cash management account from your Go account, but the performance of this account is also good. Renowned for its customer-centric approach, Fidelity offers FDIC protection up to $1.25 million and charges no account fees. Furthermore, Fidelity offers all the features already common to a cash account, including the ability to write checks, pay bills, use debit cards, and make mobile payments. Additionally, you can receive reimbursement for ATM fees incurred when making transactions in the US.

If there's a downside, it's that Fidelity's interest rate on funds isn't as high as Betterment's as of this writing, nor is it close enough to be overlooked.

Features and Tools

Here, Fidelity Go and Betterment Both Shows perform superbly, offering many useful options for investors.

Betterment offers the following benefits:

• An app that makes it easier to donate shares to charities; a tax-impact calculator shows the tax consequences of making changes to your portfolio.
• A retirement planning tool that thoroughly analyzes your finances and offers suggestions for strengthening them.
• A tool to help you optimize your various financial objectives through goal-setting.
• Educational resources on investment and personal finance.

Furthermore, Fidelity Go offers an extensive range of beneficial tools:

• A target tracker showing how far you've come toward your goals.
• A tool for tracking the amount of debt you still owe.
• Full access to Fidelity's investment resource library, including instruction manuals, screeners, and planning guides.
• Both rivals have much to offer investors who want to maximize their robo-advisor and expand their financial horizons.

Conclusion

Even though Betterment could be more expensive for fresh investors, it's still a wonderful pick for your next robo-advisor. The higher price over Fidelity Go is justified by the greater range of options, such as tax-loss harvesting, and this cost difference lowers as your asset value increases. It may be too simple for existing Fidelity customers to open a new account and maintain their funds with a customer-friendly corporation they recognize and trust. With both robo-advisors rating strongly in Bankrate's yearly reviews, it takes time to go right.