Which is better Investment Fundrise vs. LendingClub

Improvement against Fundrise

Betterment and Fundri e are both investment platforms that have raised millions of capital and conquered large parts of the market. What are the differences between the two? What everyone offers

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Betterment and Fundrise are both investment platforms that have raised millions of capital and conquered large parts of the market.

What are the differences between the two? What does each offer? Let's break down the two platforms and see what each brings to market.

About improvement and fundrise

About improvement

Founded in 2008 by Jon Stein and Eli Broverman, Betterment is one of the biggest names in robo-consulting (check out our report on improvement). Betterment is a trustee that helps investors get started with their investment and financial planning.

Users answer various questions that will help them determine their risk tolerance. Betterment generates an individual portfolio of Exchange Traded Funds (ETFs) that is tailored to your goals and your level of tolerance. Betterment does not have its own funds and generates its investment advice using modern portfolio theory.

About Fundrise

Founded in 2010 by brothers Ben and Dan Miller, Fundrise is an online investment platform designed to help smaller and newer investors enter the world of private, residential and commercial real estate investing. Fundrise has raised over $ 488 million in capital.

Fundrise users pool their assets to finance real estate projects and are repaid either through quarterly dividend payments or through an increase in the value of the property (the property). Fundrise also offers eFunds, which use pooled funds to buy land, build new homes, and then sell it to home buyers. For more information on these features, see our Fundrise report.

How are they the same

Betterment and Fundrise are both investment platforms that can help people who are just starting out. Both offer low barriers to entry and can diversify your holdings within their platforms, albeit in very different ways.

How are they different?

Improvement is more of a general investment platform. The website is geared towards getting more people to invest through ETFs.

The service offers the following features and tools:

  • Fractional Shares and Free Trade
  • Automatic realignment
  • Tax Loss Harvesting, which can increase your post-tax return by an estimated 0.77% per year
  • A personalized retirement plan
  • The ability to synchronize external financial accounts enables customers to find out about assets that are held outside of Betterment

On the other hand, Fundrise is heavily devoted to real estate investments. In 2015 Fundrise presented a brand new product with eREIT. With the eREIT, Fundrise has chosen the more traditional investment option of a Real Estate Investment Trust (REIT) and made it more accessible to smaller investors online. It is important to note that the eREIT is not traded on a public exchange and the investments are often illiquid.

When you want your money back from your Fundrise investment, it gets a lot harder than it does with stocks. Fundrise offers to buy back your original investment within the first 90 days (although there are some restrictions there). However, if you want your money back another time within the first five years of investing, you will have to pay a number of fees.

Minimum deposit

There is no minimum deposit required for a Betterment Digital account. (However, if you want to sign up for a premium account, you'll need to invest at least $ 100,000.)

Fundrise has a minimum deposit of $ 500 for its starter portfolio. To invest in its core portfolio, you need to deposit at least $ 1,000.

Winner - You can get started with Betterment with no minimum deposit.

Annual fees

Betterment's fees are 0.25% per year for digital and 0.40% per year for premium.

Fundrise fees are 1% per year.

Winner -

Outstanding functions

Properties unique to improvement

Aside from the above traits, Betterment's “human touch” is different from its robo-adviser brothers. You can set up a counseling session with a living, breathing, human betterment advisor for $ 199. Betterment consultants offer Get Started and Financial Review packages, marriage planning, college planning packages, and retirement planning.

Properties that can only be found at Fundrise

Fundrise has made real estate investments dramatically more accessible to people through its eREITs. The minimum deposit required is $ 500 and their funds are available to non-accredited investors, while some real estate investments are only available to accredited investors (those with a net worth of more than $ 1 million who cannot include the value of their home, or a minimum Annual income of at least $ 200,000 for individuals).

Winner - Betterment and Fundrise offer interesting, unique features depending on your investment needs.

security

The improvement uses two-factor authentication. You can also give third parties read-only access to your information without making changes on your behalf. Third-party Digicert has also provided SSL certification for Betterment. Betterment collects a lot of data about its users and website visitors, such as: B. the type of device you are visiting from and your IP address. When you create an account, Betterment collects your social security number, address and information about your financial situation.

Information on Fundrise's privacy and security tactics is not specifically disclosed. The site claims to use bank-level security and investor information is encrypted using an AES-bit symmetric key. The connection of every investor to Fundrise is always encrypted via HTTPS with Transport Layer Security (TLS). Fundrise diversifies where applications and data are physically stored by having multiple security centers. Fundrise uses Amazon Web Services for hosting.

Winner - Betterment and Fundrise both offer security features, but investors should always be careful with their information.

So what's better?

Both platforms are robo-advisors, but serve two very different purposes.

Overall, Fundrise has higher fees, but so far also very high returns. Betterment is focused on the stock market, while Fundrise is primarily focused on real estate investments. Both have low minimum deposit requirements that appeal to new and younger investors without a lot of cash.

With both services, investors will find platforms that are more diversified and automated than traditional DIY investments.

Which one is right for you depends on your own investment needs.