Betterment Cash Management Account Review – Forbes Advisor

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.

Betterment may be well known as one of the original robo-advisor investing platforms, but it offers more than just investment services and support. The financial firm also provides cash management accounts with checking and savings capabilities that rival those of banks.

The Betterment Cash Reserve account pays interest on your savings, while Betterment Checking offers unlimited ATM access with no fees. This Betterment cash management account review looks at both cash accounts and their pros and cons to help you decide whether Betterment is right for you. Account details and annual percentage yields (APYs) are accurate as of Nov. 16, 2021.

Account Basics

Betterment Cash Reserve

Betterment Cash Reserve is a high-yield cash account that acts as an alternative to a traditional savings account. The account currently earns 0.10% APY, above the national average, according to FDIC data. Cash Reserve has a $10 minimum deposit requirement, but there’s no monthly maintenance fee or minimum balance requirement. There’s also an option to open joint Cash Reserve accounts.

Betterment customers can separate their savings into savings goals. There’s even an option to automate savings by setting up automatic deposit rules.

Deposits to Betterment’s Cash Reserve are FDIC insured up to $1 million. Joint accounts are eligible for coverage up to $2 million. Like most cash management accounts, Betterment partners with several banks to sweep deposits into multiple bank accounts to provide this extra protection. Betterment partner banks include:

  • The Bancorp Bank
  • Barclays Bank Delaware
  • Citibank, N.A.
  • Cross River Bank
  • HSBC Bank USA, N.A.
  • State Street Bank and Trust Company
  • Wells Fargo Bank, N.A.

Cash Reserve accounts don’t come with a debit card. Deposits and withdrawals are limited to only a couple of options—electronic transfers and wire transfers. There’s no fee for incoming wire transfers, but your bank may charge you for sending one.

Because Betterment isn’t a bank, its accounts aren’t subject to typical savings deposit transaction limits. Betterment customers can move money in and out of their Cash Reserve account as much as they want. Transfers usually take one to two business days.

Betterment Checking

Betterment’s other cash management product is its checking account. Betterment Checking is a mobile-first checking account. The account comes with a complimentary contactless Visa debit card. Betterment doesn’t have an ATM network but provides unlimited ATM fee reimbursements worldwide. You’ll even get foreign transaction fees waived when you use your debit card outside of the U.S.

Betterment Checking is also available as a joint account. Deposits are FDIC insured up to $250,000 per depositor. Checking accounts are provided through a partnership with nbkc bank.

Another perk to Betterment Checking is cell phone insurance. If you pay your cell phone bill with your Betterment debit card, your phone is covered against damage and theft up to $600 per claim (limit of two claims per 12-month period, with a $50 deductible per claim).

When you open a Betterment Checking account, you may consider opening a Cash Reserve account as well. You aren’t required to use it and can close it at any time. Betterment Cash Reserve and Betterment Checking can be used together as a complete cash management solution.

Betterment doesn’t offer online bill pay through your account or its mobile app. However, you can use your account’s debit card or routing number and account number to pay bills through any vendor’s bill pay program.

Other Betterment Accounts and Services

Along with its cash management products, Betterment offers a variety of other accounts and services:

  • Automated investing
  • IRAs
  • 401(k)s
  • Portfolios
  • Socially responsible investing products
  • Retirement planning services

Betterment Investment and Retirement Accounts

Betterment offers investment accounts to help meet a variety of future savings goals. The robo-advisor provides two tiers of investment services—Betterment Digital and Betterment Premium.

Betterment Digital carries an annual fee of 0.25% of your balance. The plan has no minimum balance requirement. Investment portfolios are built with low-cost, globally diversified stock and bond ETFs.  A digital plan features expert financial advice, automatic rebalancing and tax-saving strategies.

The Premium plan requires a $100,000 minimum investment and carries an annual fee of 0.40% of your balance. You’ll get all of the features included with the digital plan plus:

  • Unlimited access to Betterment’s CFP professionals
  • In-depth investment advice

In addition to its investment products, Betterment also offers several retirement accounts. Options include:

  • Traditional IRAs
  • Roth IRAs
  • SEP IRAs
  • Roth conversions
  • 401(k) rollovers

Betterment’s investment and retirement accounts are designed to help you reach long-term savings goals. They will recommend a specific portfolio option based on your needs.

Read our in-depth Betterment review for details on investment and retirement accounts through the robo-advisor.

Access on the Go

Since Betterment is a robo-advisor, account management is done primarily online and through its mobile app, available on iOS (4.8 stars out of 5 on the App Store) and Android (4.7 stars out of 5 on Google Play. The highly rated mobile app allows Betterment customers to:

  • Manage accounts
  • View transactions
  • Add savings goals
  • Set up auto-deposits
  • Transfer money
  • Deposit checks
  • Lock your debit card
  • Adjust holdings
  • View performance data and projections

Pros

  • No monthly fees
  • No minimum balance requirement
  • FDIC insurance up to $1 million, $2 million for joint accounts

Cons

  • Relatively low APY
  • No debit card with Cash Reserve account
  • No checkbook

How Betterment Stacks Up

Betterment LLC’s Cash Reserve account is a well-rounded cash management account, offering no monthly fee and low minimums. It pairs well with Betterment’s no-fee checking account that provides unlimited ATM fee reimbursements regardless of where you travel. While Betterment is best known as a robo-advisor, its banking products and services are equally impressive.

A cash management account through Betterment isn’t for everyone. Almost all of its services are digital, with little human interaction. If you prefer more personal banking and investment help, you’ll need to look elsewhere. Betterment Cash Reserve accounts also come with a relatively low APY—you can find higher APYs at the best online banks.

Frequently Asked Questions (FAQs)

What is a Betterment Cash Reserve account?

Cash Reserve is a cash account available through Betterment. The account features no monthly fee, no minimum balance requirements and interest earnings.

Is Betterment Cash Reserve safe?

Yes, Betterment Cash Reserve accounts are safe. Deposits to Cash Reserve accounts are FDIC insured up to $1 million through Betterment’s partner banks.

Can you overdraft with Betterment cash management accounts?

Betterment doesn’t charge overdraft fees on its Checking accounts. If your account has insufficient funds, transactions won’t be completed.

Betterment is a popular robo-advisor that offers investment, retirement and cash management solutions.

Is Betterment a real bank?

No, Betterment is a robo-advisor, not a bank. Some of its banking services are provided through a partnership with nbkc bank and other partner banks.

Does Betterment Cash Reserve have any fees?

There are no fees attached to Betterment Cash Reserve accounts.

Are funds deposited with Betterment FDIC insured?

Yes, funds deposited into Betterment Cash Reserve accounts are FDIC insured up to $1 million maximum (up to $250,000 per partner bank, including any existing deposits at those banks) through a deposit sweep program. Joint Cash Reserve accounts are eligible for up to $2 million FDIC coverage. Betterment Checking accounts are FDIC insured up to $250,000 per depositor through nbkc bank.

Similar Articles

Comments

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Advertismentspot_img

Instagram

Most Popular