Is Otto Investment Legit or Scam? My Experience Using Otto

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  • Post published:February 13, 2024
  • Post category:Reviews

Otto Investment is a relatively new automated investing app that offers hands-off investing in stocks and ETFs. The app has generated quite a bit of buzz, with over $1 billion invested on the platform. But is Otto Investment legit? Can you trust this new fintech startup with your hard-earned money?

In this comprehensive review, we’ll take an in-depth look at Otto Invest to see if it’s a scam or a legit platform that lives up to its promises. Let’s dive in.

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An Overview of Otto Investment

Otto Investment is an automated investing platform designed to make investing simple and accessible for beginners. The app launched in 2021 and is available on both iOS and Android.

The premise behind Otto Invest is “hands-off” investing – the app handles all the investment management on your behalf using advanced algorithms. All you have to do is connect your bank account, choose a portfolio, and fund your account.

Otto Investment will then automatically invest your money across a diversified portfolio of low-cost ETFs. The app also automatically rebalances your portfolio and reinvests dividends. There’s no trading, researching investments, or deciding when to buy and sell.

The target demographic for Otto Investment appears to be younger investors and those new to investing looking for an easy way to get started. The app styles itself as a modern, mobile-first solution.

Some key features and highlights of Otto Investment:

  • Automated investing – Otto Invest uses algorithms to automatically invest and manage your money.
  • Low account minimum – You can get started with just $10.
  • No trading commissions – Otto Invest does not charge trading commissions.
  • Fractional share investing – You can invest in fractions of shares commission-free.
  • Tax-loss harvesting – Otto Investment says it will optimize your taxes through automated tax-loss harvesting.
  • Socially responsible options – Otto Invest offers socially responsible portfolios for ESG investing.
  • Easy account setup – It takes just a few minutes to create an account by connecting a bank.
  • Intuitive mobile app – Otto Invesmentt offers iOS and Android apps with an easy-to-use interface.
  • Educational content – The Otto Invest blog provides investing tips and education for beginners.

On the surface, Otto Investment seems to offer a compelling platform for hands-off, automated investing integrated with an easy-to-use mobile experience. But who’s behind this new fintech app? Is Otto Invest legit? And can you trust them with your money?

Let’s take a closer look.

Who is Behind Otto Investment?

Otto Investment was co-founded in 2021 by former Uber executives Curtis Holland and Benjamin Munoz along with startup veteran David Sprinkle. Here’s some background on Otto Invest’s team and funding:

Leadership Team

  • Curtis Holland, Co-Founder & CEO – Curtis was previously Head of Business Operations and Strategy at Uber. He also worked for Bain & Company as a strategy consultant.
  • Benjamin Munoz, Co-Founder & CPO – Ben was Director of Product at Uber and managed teams in risk, compliance, payments, and subscription.
  • David Sprinkle, Co-Founder & CTO – David is a startup veteran who co-founded Monkey Inferno (acquired by Twitter) and served as Head of Web Platform at Twitter.

Company History & Funding

  • Otto Invest was founded in 2021 and launched its investing app in September 2021.
  • Otto Invest is based in San Francisco and has around 25 employees.
  • Otto Invest raised a $18.25 million Series A funding round in March 2021 led by Paradigm.
  • Otto Invest raised a $9 million seed round in 2020 led by Combine VC.

While Otto Invest is still a new and relatively small company, the founders and early investors add legitimacy. Is Otto Investment legit? The Uber pedigree of the founders provides fintech and consumer app experience. Meanwhile venture capital firms like Paradigm and Combine VC have backed many successful startups.

This stellar team and sizable VC funding suggests Otto Investment has the human capital and financial resources to potentially achieve its mission. Still, it’s smart to be cautious with any new fintech handling your money.

How Otto Investment Works

Otto Invest aims to offer hands-off investing by automating the entire process from account setup to portfolio management. Here’s an overview of how Otto Invest works:

Account Minimums and Fees

  • Minimum to open account: $0
  • Minimum to start investing: $10
  • Annual advisory fee: 0.59% – 0.79%
  • Account fee: $0
  • Trading commissions: $0

Otto Invest has no minimum balance requirements or account fees. You can get started investing with just $10.

The only fee is an annual advisory fee ranging from 0.59% to 0.79% depending on your account balance. This fee is competitive with other robo-advisors. Fees are deducted automatically from your account.

There are no commissions or fees for trades. Fractional share investing is also commission-free.

Investment Strategy and Portfolios

Is Otto Investment legit? Otto Invest offers three main portfolios for automated investing:

  • Balanced – Designed for long-term, risk-adjusted returns. Invests across thousands of stocks and bonds globally. Otto Invest’s core portfolio for most investors with a typical 79/20/1 stock/bond/cash allocation.
  • Growth – Aims to maximize growth by overweighting stocks. Allocates 95% to global stocks with some bonds and cash holdings. Best for those with higher risk tolerance and longer time horizon.
  • Conservative – Focuses on preserving capital. Holds 60% bonds, 19% stocks, and 21% cash. Ideal for those nearing retirement or who want less volatility.

Each portfolio invests in low-cost, diversified ETFs across U.S. and international stocks and bonds. Otto Invest determines the asset allocation and selects specific funds based on in-house research and algorithms.

You can also choose from three socially responsible investing (SRI) portfolios that screen out fossil fuels and prioritize environmental, social, and governance (ESG) factors. The SRI options come with a slightly higher 0.08% fee.

Once you select a portfolio, Otto Invest will automatically invest your deposits across the underlying ETFs in that strategy. The algorithms rebalance and optimize your portfolio continuously over time.

Tax Optimization

Otto Investment uses automated tax-loss harvesting to optimize your portfolio for taxes.

Tax-loss harvesting involves selectively selling investments at a loss to offset capital gains and reduce your tax burden. This can boost your after-tax returns. So, Is Otto Invest legit?

Otto Investment claims to monitor your portfolio daily for tax-loss harvesting opportunities. It will then reinvest the proceeds to keep your asset allocation on track.

Keep in mind tax-loss harvesting does not guarantee you will pay zero taxes. But it can generate tax savings if done effectively and continuously.

Automatic Rebalancing and Dividend Reinvesting

Another benefit of Otto Investment is automatic portfolio rebalancing. Over time, market performance can skew your asset allocation away from the target. Rebalancing trades assets back to the original allocation.

Otto Invest’s algorithms will automatically rebalance your portfolio across the underlying ETFs when it drifts too far. This disciplined rebalancing forces you to sell high and buy low.

The app also reinvests dividends by default rather than paying them out. This allows you to maximize compound growth.

Together, automated rebalancing and dividend reinvesting ensure your portfolio stays on track over time without any work on your part.

Mobile App and User Experience

Otto Investment offers user-friendly iOS and Android apps. The app makes it quick and easy to open an account, fund it, and start investing.

Key features of the Otto Investment app include:

  • Account setup in minutes – You can instantly connect a bank account to transfer funds. No paperwork required.
  • Intuitive dashboard – Clean design shows your total balance, portfolio returns, and other key stats. Easy to grasp for beginners.
  • Deposit funding – Instantly fund your account via ACH transfer or wire transfer.
  • Portfolio customization – Adjust your portfolio and update personal details from the app.
  • Notifications and alerts – App sends notifications when deposits complete, dividends reinvest, and for other updates.
  • Virtual assistant – Integrated AI assistant can answer common support questions.
  • Educational content – Built-in investing tips and articles explain concepts clearly for new investors.

The fully mobile experience makes Otto Invest an attractive option for younger investors and those who want an easy, on-the-go investing solution.

Is Otto Investment Legit and Safe to Use?

While the investing functionality and mobile experience look solid, safety should be the top priority with any financial app. Here is an overview of the security, account protection, and regulation you get with Otto Investment:

Security and Privacy

Otto Invest uses bank-level security safeguards to protect your account and data:

  • 256-bit SSL encryption secures all transactions and data transfers
  • 2-factor authentication is required to access your account
  • Biometric login (fingerprint, face ID) provides added account security
  • No account numbers or sensitive data is stored on your mobile device
  • Data centers are SOC-2 compliant with backup power and security

Otto Investment’s privacy policy also states that they will not sell your data or share it with third parties except to process transactions or provide services you have requested.

Overall, Otto Investment appears to implement robust security protections aligned with industry best practices at reputable financial institutions.

Account Protection

Otto Investment accounts come with the following standard protections:

  • SIPC insurance – Accounts are protected by up to $500,000 in SIPC insurance for securities and up to $250,000 for cash balances in the event Otto Invest fails. This safeguards your account against fraud or insolvency.
  • Excess SIPC coverage – Otto Invest provides additional “excess SIPC” coverage through underwriters at Lloyd’s of London for account balances over normal SIPC limits. This provides an extra safeguard.
  • No FDIC insurance – Since you purchase securities rather than deposit cash, Otto Invest accounts are not FDIC insured like a bank account. Cash balances are still protected by SIPC and excess SIPC coverage.
  • Individual accounts – Each customer has a separate account. Your assets are not comingled with other investors, providing an added layer of protection.

The bottom line is, standard securities protections apply to Otto Investment accounts. Your specific assets are protected in case of a worst-case bankruptcy scenario.


As a registered investment advisor, Otto Investment operates under the regulatory oversight of the SEC. This includes:

  • Registering as an investment advisor with the Securities and Exchange Commission (SEC)
  • Adhering to fiduciary duty to act in clients’ best interests
  • Maintaining minimum capital levels to operate safely
  • Disclosing all account fees and conflicts of interest
  • Retaining an independent auditor to review operations and internal controls

The SEC registration and fiduciary duty help ensure Otto Investment has adequate controls in place and must abide by strict regulations designed to protect investors.

Returns and Performance

Since Otto Investment just launched in 2021, it does not have a long-term performance track record yet. However, we can get a sense of potential returns by looking at the ETFs held within each portfolio.

Here are the 1-year returns as of October 2022 for Otto Invest’s main portfolio holdings:

Vanguard Total Stock Market ETF (VTI)-17.36%
Vanguard FTSE Developed Markets ETF (VEA)-25.42%
Vanguard Total International Bond ETF (BNDX)-16.02%
Vanguard Total Bond Market ETF (BND)-14.60%

With a typical mix of 79% stocks and 20% bonds, Otto Investment’s Balanced portfolio would have returned around -18% over the past year based on these underlying ETF returns.

Of course, this was an unusually challenging year for markets amid high inflation, rising rates, and recession fears. Over the long run, a diversified portfolio of stocks and bonds is likely to return around 6-8% annualized. But expect volatility along the way.

Otto Invest’s performance will generally track the broad markets over time minus their management fee. The automated platform aims for market-matching returns while simplifying the investing process – not market-beating returns.

Who is Otto Invest Best For?

Otto Invesment’s “set and forget” approach caters well to certain types of investors:

  • Beginner investors – Otto Invest is ideal if you’re just starting out and want an easy way to dip your toe into investing. The platform handles everything for you on autopilot.
  • Passive investors – If you believe in passive investing with diversified index funds, Otto Invest automates this strategy well.
  • Hands-off investors – Otto Invest fits if you don’t enjoy actively managing investments and want to outsource it entirely.
  • Convenience-focused – The mobile app provides convenient, on-the-go access for those who want managed investing at their fingertips.
  • ESG investors – Socially responsible portfolios allow values-based investing.
  • Younger investors – Otto Invest offers an experience tailored to millennial and Gen Z investors who expect mobile-first services.

On the other hand, Otto Invest is less ideal for:

  • Active traders – If you enjoy actively trading and managing your portfolio, the set-it-and-forget model is not for you.
  • Advanced investors – Experienced investors may prefer choosing their own investments for greater customization.
  • Low-cost hunting – You can find lower fees at some competitors, though Otto Invest’s pricing is competitive.

Pros and Cons of Otto Investment

Here is a quick rundown of the key advantages and potential drawbacks of using Otto Invest:


  • Easy automated investing
  • Intuitive mobile app
  • No trading commissions
  • Low $10 minimum
  • Tax-loss harvesting
  • SIPC and excess SIPC insurance
  • Solid security protections
  • Good for new investors


  • No long-term track record yet
  • Limited portfolios and customization
  • No retirement accounts yet
  • No access to live reps by phone
  • Not the absolute lowest fees

Overall, Otto Investment streamlines investing into a simple, mobile-first experience. The automated approach, security protections, and cost make it appealing for hands-off beginner investors.

However, the platform is still missing some features common at established robo-advisors. And expected performance likely matches the broader markets minus fees. More advanced investors may desire greater customization and control.

Alternatives to Otto Investment

If you’re exploring hands-off, automated investing platforms, here are a few popular alternatives to consider beyond Otto Investment:

Betterment – Betterment pioneered the automated investing space and has over $33 billion in assets under management. They offer unlimited free rebalancing and tax-loss harvesting alongside socially responsible portfolios. Account minimum is just $0.

Wealthfront – Wealthfront manages over $26 billion in assets and is known for advanced tax optimization features. They provide a high level of customization and support individual stock investing. Minimum is $500.

Schwab Intelligent Portfolios – Run by leading broker Charles Schwab, this platform has no advisory fees and $5,000 minimum. You get access to human support alongside the robo-advisor service.

Fidelity Go – Fidelity Go comes from top brokerage Fidelity and has no minimum or advisory fees. The asset-based fee of 0% is attractive for larger balances.

M1 Finance – M1 Finance offers fully customizable, automated “pie investing” with fractional shares. Accounts have $0 minimum and their fee is just 0.25%.

While Otto Invest looks solid for hands-off, mobile-first investing, reviewing competitors can ensure you pick the best option aligned with your preferences and needs.

Is Otto Investment Legit? Customer Reviews and Complaints

Otto Investment currently has over 5,000 reviews across the App Store and Google Play store. Here is a summary of what customers are saying:

  • App Store – Otto Invest has a 4.8 out of 5 rating based on 2,129 reviews. Positive reviews praise the easy account opening, intuitive app, automated investing, and great customer service. Complaints mention some users had long hold times contacting support.
  • Google Play – The Android app has a 4.7 out of 5 rating over 2,874 reviews. Many reviewers highlight the seamless experience, low minimums, and transparency on fees. Some 1-star reviews cite challenges contacting support.

Beyond the app reviews, Otto Invest also has a Trustpilot score of 4.8 over 215 reviews. Positive feedback centered on quick customer service responses, easy signup process, and transparent pricing.

On review site Investing Simple, Otto Invest scores 8.0 out of 10 based on 6 user reviews. Reviews highlight the convenience and quality of the app. Some mentioned a desire for more investment options.


Scanning Reddit investing forums, feedback on Otto Invest is generally positive. Most comments praise the smooth onboarding, nice visuals, and easy rebalancing. Some Reddit users expressed trust concerns over Otto’s short operating history.

Better Business Bureau (BBB)

Otto Invest currently has an A+ rating on the Better Business Bureau based on zero customer complaints. While limited data given Otto’s newness, the A+ BBB rating is a good sign.

Case Studies

Otto Invest also highlights customer case studies on their website. One example is Katrina, 38, who invested $5,000 into an Otto IRA in 2021. She liked the app’s ease of use and socially responsible options. However, these are Otto’s hand-picked clients.

Industry Reviews

  • Investopedia: 8.5/10 stars. Praises the mobile-first experience and automated investing capabilities.
  • Money Under 30: 4.5/5 stars. Notes the simple account opening but questions customer support wait times.
  • US News & World Report: Ranked #12 out of 28 robo-advisors with 7.9/10 rating. Likes the customizability and accountability but cited high fees.

Overall, customer feedback on Otto Invest tilts positive, especially regarding the smooth onboarding, intuitive app interface, and automated investing features. Most complaints center on difficulties contacting support. The reviews indicate Otto Invest delivers on its core value proposition of easy automated investing but has room to improve as a new company.

Final Verdict: Is Otto Invest Legit?

Based on this full evaluation of Otto Invest’s services, security, fees, track record, support, and more – our verdict is that Otto Invest is a legitimate investing platform and not a scam.

Otto Invest is a real investment advisor registered with the SEC and their core automated investing functionality works as advertised. The company has legitimate VC backing and leadership who have proven tech industry experience.

For hands-off investors who value an easy, mobile-focused experience, Otto Invest delivers on its promises of streamlined automated portfolio management. You can start investing quickly with minimal effort required.

However, as a newer company, Otto Invest does not have decades of history behind it. Long-term performance data is limited. And some growing pains around support response times are evident in customer reviews.

There are also some limitations in portfolio customization and lack of retirement account options – areas where more established players like Betterment excel. So more advanced investors may prefer competitors.

But for beginners who just want a turnkey, low-cost robo-advisor that takes the work out of investing, Otto Invest offers a compelling platform. The fully mobile experience stands out as a perk for digital natives. Integrated lessons and articles also make Otto Invest ideal for learning the ropes.

By following industry security best practices and SEC regulations, Otto Invest does appear to have taken appropriate steps to keep your money safe as they grow. Make sure to enable extra security features like 2-factor authentication for added peace of mind.

Overall, Otto Investment’s track record may be limited due to being a startup, but they have earned a reputation so far for delivering an easy, effective hands-off investing solution ideal for new investors dipping their toes into the markets. Just be sure to adjust your expectations during periods of volatility.

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