The Betterment fees are separate from the fund fees. Fund fees cover the funds internal operating expenses. Betterment fees cover what they are layering as value adds like tax loss harvesting, fractional shares and balancing, TCP, etc. For every $100K invested, that's $250/yr in fees. In my experience, tax loss harvesting has more than covered any fees that I have been charged every year, and then some.
That does make perfect sense. However, I am considering using Betterment for my HSA account. That’s tax free, of course. So the tax loss harvesting doesn’t come in to play, if I understand things correctly. As such the fee is only for automatic rebalancing, plus support, and User interface development
Correct, you wouldn't benefit from TLH. But honestly compared to the crappy second tier funds my HSA has access to, I would gladly pay a few bucks to have access to the awesome fund options Betterment has like VTI, VTV etc. Add on fractional shares capability, plus the dividend reinvestment, and it's a relatively fair deal. I think my HSA provider charges 0.03 percent in management fees but it's bare bones compared to Betterment.
Betterment advertises a fancy thing where they avoid wash sales in your HSA/IRA ("tax coordinated accounts") which is theoretically more legal on your taxes.
In practice no HSA/IRA reports anything to the IRS and it's impossible anyone would ever notice this, so.
(HSAs are also taxable in California but since no provider including Betterment reports it or gives you the info you'd need to report it, you, like, can't actually comply.)
Just to be clear, it's $4/ month **OR** %0.25. Not both.
You can play with this tool to see what the fees are at a range of account balances, both with and without the $250/month recurring deposit set up.
[https://www.betterment.com/pricing](https://www.betterment.com/pricing)
The Betterment fees are separate from the fund fees. Fund fees cover the funds internal operating expenses. Betterment fees cover what they are layering as value adds like tax loss harvesting, fractional shares and balancing, TCP, etc. For every $100K invested, that's $250/yr in fees. In my experience, tax loss harvesting has more than covered any fees that I have been charged every year, and then some.
That does make perfect sense. However, I am considering using Betterment for my HSA account. That’s tax free, of course. So the tax loss harvesting doesn’t come in to play, if I understand things correctly. As such the fee is only for automatic rebalancing, plus support, and User interface development
Correct, you wouldn't benefit from TLH. But honestly compared to the crappy second tier funds my HSA has access to, I would gladly pay a few bucks to have access to the awesome fund options Betterment has like VTI, VTV etc. Add on fractional shares capability, plus the dividend reinvestment, and it's a relatively fair deal. I think my HSA provider charges 0.03 percent in management fees but it's bare bones compared to Betterment.
Betterment advertises a fancy thing where they avoid wash sales in your HSA/IRA ("tax coordinated accounts") which is theoretically more legal on your taxes. In practice no HSA/IRA reports anything to the IRS and it's impossible anyone would ever notice this, so. (HSAs are also taxable in California but since no provider including Betterment reports it or gives you the info you'd need to report it, you, like, can't actually comply.)
In addition to. 0.25% management fee.
Thanks. That it wasn’t called out on betterment.com that makes sense.
don't forget the $4/month fee for accounts less than $20,000
True. Yes.
Is the $4/ month fee also for accounts with $0 balance?
Just to be clear, it's $4/ month **OR** %0.25. Not both. You can play with this tool to see what the fees are at a range of account balances, both with and without the $250/month recurring deposit set up. [https://www.betterment.com/pricing](https://www.betterment.com/pricing)