Betterment Direct Indexing: What It Costs, What Exists Today, and the Alternatives
Betterment is a good robo-advisor and a poor answer to a direct-indexing search, at least in August 2026. The fee schedule is clean: $5 a month or 0.25% a year on the Digital plan with no investment minimum, 0.65% a year on Premium which requires $100,000 and adds access to advisors, and tiered discounts of 0.15% on balances from $1 million to $2 million and 0.10% above that.
Last updated July 2026
Educational only · Never places a trade
In short
As of August 2026 Betterment does not offer direct indexing in its retail automated investing accounts. The company has publicly said direct indexing is coming, with US-market sleeves launching for advisors later in 2026 at no add-on cost and no minimum asset size, and with the feature planned for automated investing after that. What Betterment does offer today is an ETF portfolio with automated tax-loss harvesting at no extra charge, priced at $5 a month or 0.25% a year for Digital and 0.65% a year for Premium with a $100,000 minimum. So if you found this page searching for Betterment direct indexing, the honest answer is that it is announced rather than available, and your live options are the providers that already ship it or designing the index yourself first.
Side by side
Indexes vs Betterment
| Capability | Indexes | Betterment |
|---|---|---|
| Direct indexing available to retail accounts today | Not applicable, design tool | No, announced for 2026 |
| Owns individual stocks on your behalf | No, ETF portfolios | |
| Automated tax-loss harvesting | ||
| Design and backtest an index before funding anything | ||
| Choose every holding and weight yourself | ||
| Stocks and crypto in one index | Separate crypto portfolios | |
| Pick individual stocks yourself | Any listed member, any weight | Self-directed investing: S&P 500 and Russell 1000 names plus ETFs |
| Account minimum | None, software | None for Digital, $100,000 for Premium |
| Annual cost | Flat software fee from $12/mo | 0.25% Digital, 0.65% Premium, no fee on self-directed |
| Analyze-only, never places trades |
Comparison reflects general product positioning and is provided in good faith. Verify current capabilities with each vendor.
Where each one fits
Indexes and Betterment, without the sales pitch
Betterment is a good robo-advisor and a poor answer to a direct-indexing search, at least in August 2026. The fee schedule is clean: $5 a month or 0.25% a year on the Digital plan with no investment minimum, 0.65% a year on Premium which requires $100,000 and adds access to advisors, and tiered discounts of 0.15% on balances from $1 million to $2 million and 0.10% above that. Tax-loss harvesting is included at no extra cost on the ETF portfolios, which is the feature most people are really after when they search for direct indexing in the first place.
The gap is that harvesting inside ETFs works at the fund level, so there are far fewer independent lots to harvest than in a portfolio that owns the individual stocks. That is the whole reason direct indexing exists, and Betterment has said it is building it: three US-market sleeves for advisors later in 2026, no add-on cost, no minimum size, with security exclusions built in from the start and direct indexing coming to automated investing as well. Until that ships, the providers that already offer retail direct indexing are Wealthfront, Fidelity, Schwab and Frec, and their minimums and fees differ enormously.
Indexes fits in front of all of them. It is analyze-only educational software, not a brokerage and not an advisor, and it never places a trade or holds assets. You use it to work out which holdings and which weights you actually want, backtest that index against the S&P 500, and walk into the provider decision knowing what you are asking for.
Nothing here is investment advice, and Betterment product details change, so confirm current terms on their site.
Questions
Betterment and direct indexing, answered, answered
Does Betterment offer direct indexing?
Not in retail automated investing accounts as of August 2026. We re-checked betterment.com/pricing this month and the phrase "direct indexing" does not appear on it anywhere. Betterment has publicly said direct indexing is coming, with three US-market sleeves launching for advisors later in 2026 at no add-on cost and no minimum asset size, and the feature planned for automated investing afterward. Today the retail portfolios hold ETFs, not individual stocks. Check Betterment directly before assuming this is still current.
Can you pick your own stocks at Betterment?
Yes, through a separate self-directed investing account, which is newer than most articles about Betterment acknowledge. It covers US-listed stocks from the S&P 500 and the Russell 1000 plus a wide range of ETFs, trades are commission-free, fractional shares are supported with no minimums, and Betterment's management fee does not apply to it. Mutual funds can be transferred in and held or sold but not bought. What it does not include is automatic rebalancing, which is reserved for the automated investing product, so a basket you build there drifts unless you reset it yourself. Verified on betterment.com in July 2026.
How much does Betterment cost?
Betterment charges $5 a month or 0.25% a year for the Digital plan with no investment minimum, and 0.65% a year for Premium, which requires $100,000 in eligible balances and includes access to financial experts. Eligible balances from $1 million to $2 million are charged 0.15% and balances above $2 million 0.10%. Outbound account transfers cost a flat $75 per investing account transferred to another company. Figures re-verified on betterment.com/pricing in August 2026.
Does Betterment do tax-loss harvesting?
Yes, and at no additional cost on eligible taxable accounts. The important limitation is that it harvests at the fund level, because the portfolios hold ETFs. A direct-indexing account owns the individual stocks instead, which gives it hundreds of separate positions that can fall independently, so it typically finds more losses in the same market. That difference is the entire case for direct indexing.
Which providers offer direct indexing right now?
In August 2026 the retail options were Wealthfront, whose S&P 500 Direct product starts at a $5,000 minimum and 0.09%, Fidelity Managed FidFolios at 0.40% for index strategies and $5,000 to be invested, Frec Classic from $20,000 with fees from 0.09%, and Schwab Personalized Indexing at a $100,000 minimum from 0.40%. Vanguard Personalized Indexing is distributed through advisors and publishes neither a minimum nor a fee.
Frec vs Wealthfront vs Betterment: which has the lowest bps for custom indexing?
Wealthfront and Frec tie at 0.09% for S&P 500 direct indexing, and Betterment is not in the running because it does not offer stock-level direct indexing at retail yet. Frec Classic spans 0.09% to 0.35% across 25 indices with a $20,000 minimum, so 9 bps is its floor rather than a flat rate. Wealthfront S&P 500 Direct is a flat 0.09% from $5,000, which makes it the cheapest way in at a small balance. Betterment charges 0.25% for an ETF portfolio with fund-level harvesting, so on price alone it is not competing for this job.
Betterment vs Wealthfront vs Frec for pure direct indexing under $100k?
Under $100,000 the honest shortlist is two names. Wealthfront S&P 500 Direct takes you from $5,000 at 0.09%, and Frec Classic from $20,000 at 0.09% to 0.35% with a wider index menu. Fidelity Managed FidFolios is the third option at 0.40%, worth it mainly if your money already sits at Fidelity. Betterment is out until its announced direct indexing actually ships, because its retail portfolios hold ETFs rather than individual stocks, and that distinction is the whole point of the strategy.
Should I wait for Betterment direct indexing or switch?
That depends on what you are paying for the wait. If you already hold a taxable Betterment account and it is working, waiting costs you the extra harvesting you would have captured, which is real but rarely urgent. If you are opening a new taxable account specifically for direct indexing, the providers that ship it today are the ones to compare. Either way, deciding what index you want is free and can be done first.
Is Indexes an alternative to Betterment?
Not a direct one. Betterment manages money and places trades; Indexes never does either. It is educational and informational software for designing a weighted index of stocks or crypto, backtesting it against real market history, and tracking it against a benchmark. It answers what should I own, not who should hold it, and most people who use it still fund an account somewhere else.
New to the strategy? Start with our guide to direct indexing, what it costs and who it suits, or see direct indexing fees compared across providers. If you are still deciding which category of tool you need, the portfolio analyzer comparison sets out the difference between account aggregators, modeling tools and construction tools. To see every provider's published minimum and annual fee in one table, including the advisor-only firms, compare direct indexing platforms on fees and minimums.
Going deeper on Betterment: is Fidelity Managed FidFolios better than Frec for direct indexing, Frec vs Wealthfront direct indexing, the Fidelity Managed FidFolios breakdown .
Other comparisons
Build your index and see how it backtests
Bundle stocks or crypto into your own weighted index, backtest it against real market history, and track it against the S&P 500 or BTC. Prosumer pricing, no brokerage account. Indexes is educational and informational only, and it never places a trade. Decide for yourself.