Betterment checking and cash reserve review (2023)

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How Betterment products compare

  • Betterment checking and cash reserve review (1)

    Betterment Cash Reserve Account

  • Betterment checking and cash reserve review (2)

    Betterment Checking Account

Annual Percentage Yield (APY)

3.75%

Annual Percentage Yield (APY)

None

Learn more

On Betterment's website

Learn more

On Betterment's website

Overall bank rating

FeatureInsider rating (out of 5)
Checking4.25
Cash reserve4.25
Trustworthiness4
Total4.25

Pros and cons

ProsCons
  • Can bank and invest with the same company

  • Reimburses foreign transaction fees

  • Reimburses ATM fees

  • Offers a cash-back checking account

  • Has a high-yield savings account

  • Automatic savings tools and savings buckets

  • Cannot bank in person
  • Can't deposit cash
  • Need to qualify to use mobile check deposit
  • $2,000 paper check deposit limit

Betterment Checking Account

Betterment checking and cash reserve review (3)

Betterment Checking Account

4.25/5

4.25 out of 5 Stars

Annual Percentage Yield (APY)

None

Minimum Deposit Amount

None

View Full Details

(Video) Betterment Review | Walkthrough | Pros + Cons | Is It Worth It?

On Betterment's website

Annual Percentage Yield (APY)

None

Minimum Deposit Amount

None

On Betterment's website

Betterment checking and cash reserve review (5)

On Betterment's website

Details

Annual Percentage Yield (APY)

None

Minimum Deposit Amount

None

Editor's Rating

4.25/5

4.25 out of 5 Stars

Pros & Cons

Pros

(Video) Betterment Savings Accounts: What You Should Know

No minimum opening deposit

No monthly service fees

Reimburses all ATM fees

Reimburses all foreign transaction fees

No overdraft fees

Earn cash back rewards

Cons

No physical branch locations

You won't earn interest without a Cash Reserve account

Mobile check deposit is limited to certain customers

You can only deposit $1,500 in paper checks per day

No way to deposit cash

Highlights

More Information

  • No ATM network, but all ATM and foreign transaction fees are reimbursed
  • By linking to a Betterment Cash Reserve Account (Member FDIC), you can set up the "two-way sweep," which helps you earn more interest and set up overdraft protection
  • Earn cash back rewards, powered by Dosh
  • You can use mobile check deposit if a) you've been a Betterment customer for at least 30 days, and b) you have received at least $500 in direct deposits in the last month
  • FDIC insured through NBKC Bank

Betterment Checking is a good account for travelers because it reimburses 100% of foreign transaction fees and ATM fees.

You can also earn cash back with thousands of retailers. The percentage you'll earn will depend on a) which business you shop at, and b) whether there are any new cash back promotions — but you can typically expect to earn 2% to 20% cash back.

Betterment Cash Reserve Account

Betterment checking and cash reserve review (6)

Betterment Cash Reserve Account

4.25/5

4.25 out of 5 Stars

Annual Percentage Yield (APY)

3.75%

Minimum Deposit Amount

$10

View Full Details

(Video) Betterment Review - Expert Robo-Advisor Analysis

On Betterment's website

Betterment checking and cash reserve review (7)

Betterment Cash Reserve Account

4.25/5

4.25 out of 5 Stars

Annual Percentage Yield (APY)

3.75%

Minimum Deposit Amount

$10

On Betterment's website

Betterment checking and cash reserve review (8)

On Betterment's website

Details

Annual Percentage Yield (APY)

3.75%

Minimum Deposit Amount

$10

Editor's Rating

4.25/5

4.25 out of 5 Stars

Pros & Cons

Pros

(Video) Betterment Checking Review | Who Is The Betterment Everyday Checking Account Really For?

Competitive APY

$10 minimum deposit

No minimum balance requirements

No monthly service fees

No transaction limits

FDIC insured for up to $1 million

Create savings goals

The "two-way sweep" moves extra money from checking to cash reserve to help you save

Cons

No physical branch locations

Mobile check deposit is limited to certain customers

You can only deposit up to $1,500 in paper checks per day

No way to deposit cash

Highlights

More Information

  • By linking to a Betterment Checking Account (Member FDIC), you can set up the "two-way sweep," which helps you save automatically, earn more interest, and set up overdraft protection
  • You can use mobile check deposit if a) you've been a Betterment customer for at least 30 days, and b) you have received at least $500 in direct deposits in the last month
  • Interest compounds daily, pays monthly
  • FDIC insured through partner banks

Additional Reading

Read our review Read Our Review A looong arrow, pointing right

Betterment Cash Reserve is essentially a high-yield savings account. But unlike most savings accounts, it doesn't limit how many transactions you can make each month.

Betterment Cash Reserve pays a high interest rate.You can also create buckets to save for different goals, such as "Travel Account" or "Emergency Fund."

How Betterment works

Betterment is primarily known as an online investment platform, but it also has a checking and cash reserve account.

If you have both accounts, you can link them to take advantage of what Betterment calls the "two-way sweep."

With the two-way sweep, Betterment assesses whether there's any extra money in your checking account by looking at your balance and spending habits. Then it sweeps any excess money into cash reserve to help you save more and earn interest. The two-way sweep also uses your cash reserve account as overdraft protection. If you overdraw from your checking account, money moves from cash reserve to cover the overdraft.

The Betterment app ranks as one of ourtop banking mobile apps. It has 4.8 out of 5 stars in the Apple store, and 4.6 out of 5 stars in the Google Play store.

To contact customer support, call or email Monday through Friday, 9 a.m. to 6 p.m. ET.

Your deposits in Betterment Checking are FDIC insured for up to $250,000 through NBKC Bank, or $500,000 for joint accounts. Deposits in Betterment Cash Reserve are FDIC insured for up to $1 million by multiple partner banks.

Betterment trustworthiness and BBB rating

The Better Business Bureau gives Betterment a B rating. The BBB cites 65 complaints filed against the business as the reason for the grade. A good BBB score indicates a company responds effectively to customer complaints, advertises honestly, and is transparent about business practices.

A strong BBB grade doesn't guarantee you'll have a smooth relationship with a company, though. You may want to ask friends and family about their experiences with Betterment or read online reviews. You could also look at any recent controversies.

Betterment hasn't been involved in any recent public controversies.

Betterment vs. Wealthfront

You'll probably like Betterment if you want separate checking and savings accounts. Wealthfront has a hybrid checking/savings account. On the bright side, Wealthfront does let you create savings buckets to organize and plan your saving.

You'll earn interest on your entire balance with Wealthfront. With Betterment, you'll only earn interest on your cash reserve balance.

Betterment vs. Acorns

Acorns actually doesn't have a savings account. But it does have checking, retirement, and brokerage accounts, plus investment accounts for kids. Depending on which accounts you want, you'll pay between $1 and $5 per month.

You may prefer Acorns if you want more account options, but Betterment if you want a regular checking and savings account.

Laura Grace Tarpley, CEPF

Personal Finance Reviews Editor

(Video) The #1 PROBLEM with Betterment Investing

Laura Grace Tarpley (she/her) is a personal finance reviews editor at Insider. She edits articles about mortgage rates, refinance rates, lenders, bank accounts, wealth building, and borrowing and savings tips for Personal Finance Insider. She was a writer and editor for Insider's "The Road to Home" series, which won a Silver award from the National Associate of Real Estate Editors. She is also a Certified Educator in Personal Finance (CEPF). She has written about personal finance for over six years. Before joining the Insider team, she was a freelance finance writer for companies like SoFi and The Penny Hoarder, as well as an editor at FluentU. You can reach Laura Grace at ltarpley@insider.com. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services »

FAQs

Is Betterment cash reserve worth it? ›

Betterment Cash Reserve is high-quality savings product from a big name in robo-advising. It's best for its high FDIC insurance protection and above-average interest rate. However, they do not have the best interest rate around. If you already have accounts at Betterment, adding a savings product could make sense.

What does cash reserve mean on Betterment? ›

If you participate in Cash Reserve, you authorize Betterment, on a discretionary basis, to direct Betterment Securities as to the allocation of your funds among one or more Program Banks. Deposits at each Program Bank are insured by the FDIC up to $250,000 for each insurable capacity (e.g. individual or joint).

How long does Betterment cash reserve withdrawal take? ›

When you withdraw from your Cash Reserve or cash goals, the cash will be transferred to your connected checking account generally within 1 to 2 business days, depending on when you put in your request.

Is Betterment cash reserve a high yield savings account? ›

Betterment Cash Reserve is essentially a high-yield savings account. But unlike most savings accounts, it doesn't limit how many transactions you can make each month. Betterment Cash Reserve pays a high interest rate. You can also create buckets to save for different goals, such as "Travel Account" or "Emergency Fund."

Can you withdraw from Betterment cash reserve? ›

You can withdraw your money from Betterment at any time, without additional fees. We do not charge any trading fees or assess penalties for requested withdrawals or account closures. It's your money and is always accessible to you.

Is Betterment legitimate? ›

Yes. Betterment is a fiduciary company that's registered with the SEC and a member of the FINRA. It hires Certified Financial Planners to give advice. While investments could lose value over time — a risk with all investing — funds in Betterment accounts are protected by SIPC in case of emergencies.

What is a good amount of cash reserve? ›

Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.

Should I have a cash reserve? ›

Key Insights. An emergency fund can serve as your personal safety net during periods of financial stress. While you're working, we recommend you set aside at least $1,000 for emergencies to start and then build up to an amount that can cover three to six months of expenses.

Should you keep a cash reserve? ›

You should always hold savings you need for emergencies in an easy access account. Those you're holding for expected expenses in the next five years are better off in cash too. Some people will invest for near-term planned expenses, especially when starting from scratch or keen to build their pot quickly.

How does cash reserve work? ›

The Cash Reserve is a personal line of credit attached directly to your checking account. If your checking account runs short of available funds to cover transactions, funds are automatically advanced from the available credit in your Cash Reserve.

How long should a cash reserve last? ›

Most financial experts suggest that cash reserves cover three to six months of expenses. But, there's no one-size-fits-all amount. To figure out your cash reserve's sweet spot, look at your financial needs.

What happens to my money if Betterment closes? ›

If Betterment were to go out of business, your funds would be transferred to another brokerage of your choice. If you were to close your account, your money will be transferred back to your linked checking account. Betterment is a member of the Securities Investor Protection Corporation (SIPC).

What is the best high interest savings account? ›

Best High-Yield Savings Account Rates
  • MySavingsDirect - 4.35% APY.
  • CFG Bank - 4.25% APY.
  • Western State Bank - 4.25% APY.
  • UFB Direct - 4.21% APY.
  • Vio Bank - 4.17% APY.
  • Popular Direct - 4.16% APY.
  • Bask Bank - 4.15% APY.
  • Salem Five Direct - 4.10% APY.

What's the best high-yield savings account? ›

The best high-yield savings account rates
  • CIT Bank - 4.05% APY.
  • PNC Bank - 4.00% APY.
  • LendingClub Bank - 4.00% APY.
  • Bread Savings - 4.00% APY.
  • CIBC Bank USA - 3.77% APY.
  • Citizens Access - 3.75% APY.
  • Synchrony Bank - 3.75% APY.
  • TAB Bank - 3.64% APY.

Is Betterment a real bank? ›

Neither Betterment Financial LLC, nor any of their affiliates, is a bank.

What are the cons of Betterment? ›

Cons: Where Betterment could improve
  • Account minimum and premium fee structure. Betterment's $100,000 account minimum for its premium plan is steep in the robo-advisor world, where many clients are approaching investing for the first time. ...
  • No direct indexing. ...
  • Confusing set-up process.

Does Betterment report to IRS? ›

You will receive a Form 5498, which will be downloadable in your account by May 31st, 2022, if you had made annual or rollover contributions into your Betterment IRA. Direct transfers into your IRA will not be reported, per IRS requirements. You do not need to send the 5498 to the IRS—we will report it for you.

How do I avoid Betterment fees? ›

Will I be charged the whole annual fee if I use Betterment for just part of the year? No, you will not. If you withdraw your entire balance before the end of the month or year, you're only charged the fee for the days your money was managed by Betterment.

Why am I losing money with Betterment? ›

Can you lose money with Betterment? Yes, as with any investment, your investments with Betterment can lose money. If the market drops, your investment could lose value. Unlike checking or savings account deposits, investments are not FDIC insured, and there is no bank guarantee.

Can you get scammed on Betterment? ›

We are committed to protecting your account from fraud. If you see any unauthorized activity in your account, report it immediately. We'll work with you to address any issues that result from unauthorized use of your Betterment account.

Is a Betterment account worth it? ›

Bottom Line: Is Betterment Worth the Fee? Betterment's fee for the robo-advisor is fairly low. It's worth it for investors who want to set up their investments and trust they will grow independently. Investors with a lot to invest will appreciate the advanced tools like tax-loss harvesting at such a low price.

Is $20000 a good amount of savings? ›

Is $20,000 a Good Amount of Savings? Having $20,000 in a savings account is a good starting point if you want to create a sizable emergency fund. When the occasional rainy day comes along, you'll be financially prepared for it. Of course, $20,000 may only go so far if you find yourself in an extreme situation.

How much cash reserve should a start up have? ›

The common rule of thumb is to have a cash buffer of three to six months' worth of operating expenses.

How much money should I have saved by 40? ›

To stay on track to retire at 67, you should have saved 3 times your income by age 40, according to retirement-plan provider Fidelity Investments.

Where should I keep cash reserves? ›

On This Page
  • High-yield savings account.
  • Certificate of deposit (CD)
  • Money market account.
  • Checking account.
  • Treasury bills.
  • Short-term bonds.
  • Riskier options: Stocks, real estate and gold.
Jun 27, 2022

Why is cash reserve important? ›

Cash reserves are vital to companies. The reserve holds money that a business can use when unexpected costs come up or when revenues are down. Calculating company revenue and subtracting expenses gives companies the amount per month they need to cover themselves.

How much money does the average 30 year old have saved? ›

The Fed's most recent numbers show the average savings for the age group that includes 30-year-olds is $11,250. The median savings is $3,240. If you're in your 30s, you may have some advantages that could help you to grow your savings.

How much savings should I have at 50? ›

One suggestion is to have saved five or six times your annual salary by age 50 in order to retire in your mid-60s. For example, if you make $60,000 a year, that would mean having $300,000 to $360,000 in your retirement account. It's important to understand that this is a broad, ballpark, recommended figure.

How much money should I have saved by 35? ›

So, to answer the question, we believe having one to one-and-a-half times your income saved for retirement by age 35 is a reasonable target. It's an attainable goal for someone who starts saving at age 25. For example, a 35-year-old earning $60,000 would be on track if she's saved about $60,000 to $90,000.

Is cash reserve and cash balance same? ›

Cash balance refers to the amount of money available for the business or its employees. A cash balance plan offers participating employees potential savings toward their retirement. Cash reserves refers to money kept on hand in case of emergencies, and is more liquid.

What can be used as cash reserves? ›

Acceptable Sources of Reserves
  • checking or savings accounts;
  • investments in stocks, bonds, mutual funds, certificates of deposit, money market funds, and trust accounts;
  • the amount vested in a retirement savings account; and.
  • the cash value of a vested life insurance policy.

Do lenders look at cash reserves? ›

If you plan to take out a mortgage to buy a home, your lender may also want to see a healthy savings account or some other type of assets that can be used as mortgage reserves. Having financial reserves shows lenders you will be able cover your mortgage should there be any changes in your income or an emergency.

Are cash reserves taxable? ›

Just like your saved after- tax money in your bank is not taxed each year. If you are setting aside a rental income for future capital expenditure, then the cash reserve are taxed as rental income when you earned it. It is not taxed every year.

Are Betterment fees high? ›

Betterment Premium charges a 0.40% annual fee and requires a minimum $100,000 balance in exchange for unlimited phone access to a team of certified financial planners. You can also get advice on investments held outside of Betterment from your team of CFPs.

Is your money insured with Betterment? ›

Your money is FDIC-insured up to $1M with our program banks ($2M for joint accounts).

How long does it take to get money from Betterment? ›

Please note that some transfers may take longer, particularly if you have recently deposited funds into your Cash Reserve account. If the transaction is initiated on the Betterment side, the timeline is 4-5 business days. If initiated from your connected funding account's side, it's 1-2 business days.

Which bank is giving 7% interest in savings account? ›

Savings account interest rates of Jana Small Finance Bank are effective from 15th November, 2022. On savings bank deposits of more than Rs. 1 lakh and upto Rs. 50 Crores, the bank is now offering an interest rate of 7.00%.

How can I get 5% interest on savings? ›

How to put money into a savings account that gives 5% interest? There is no such thing as a savings account that gives five percent interest. However, you may be able to get close by investing in a fixed annuity. As of January 2023, annuities guarantee up to 5.25% APY.

How much interest does $10000 earn in a year? ›

Currently, money market funds pay between 0.85% and 1.05% in interest. With that, you can earn between $85 to $105 in interest on $10,000 each year. Certificates of deposit (CDs). CDs are offered by financial institutions for set periods of time.

How much cash reserve is enough? ›

Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.

How much cash reserve is enough or sufficient? ›

Individuals. Individuals are advised to have enough cash in reserve to last at least three to six months in case of an emergency. They hold their cash reserves in bank accounts or in short-term stable investments that are not likely to lose value.

How much should a cash reserve be? ›

Rule of thumb is three to six months of expenses

Cash reserves aren't one-size-fits-all. To get to your best number, talk to an advisor. If you are the only employee, work from home, don't need raw materials and have personal reserves, the amount you need is less.

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