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Betterment Cash Management Account Review – Forbes Advisor

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

The Betterment Cash Reserve account pays interest on your savings, while Betterment Checking offers unlimited access to ATMs at no cost. This Betterment Cash Management Account Review takes a look at both cash accounts and their pros and cons to help you decide if Betterment is right for you. Account details and Annual Percentage Returns (APY) are correct as of November 16, 2021.

Account Basics

Improvement 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 minimum deposit requirement of $ 10, but there is no monthly maintenance fee or minimum balance requirement. There is also an option to open joint cash reserve accounts.

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

Deposits in Betterment’s cash reserve are FDIC insured up to $ 1 million. Joint accounts are eligible for coverage of up to $ 2 million. Like most cash management accounts, Betterment partners with multiple banks to transfer deposits to multiple bank accounts to provide this added protection. Improvement partner banks include:

  • Bancorp bank
  • Barclays Delaware Bank
  • Citibank, NA
  • Bank of the Cross River
  • HSBC Bank USA, NA
  • State Street Bank and Trust Company
  • Wells Fargo Bank, NA

Cash Reserve accounts do not come with a debit card. Deposits and withdrawals are limited to only a few options: wire transfers and wire transfers. There is no charge for incoming transfers, but your bank may charge you for sending one.

Because Betterment is not a bank, its accounts are not subject to the usual limits for savings deposit transactions. Betterment customers can transfer money in and out of their Cash Reserve account as much as they want. Transfers typically take one to two business days.

Verification of improvement

Betterment’s other cash management product is its checking account. Betterment Checking is a mobile checking account. The account comes with a free contactless Visa debit card. Betterment does not have an ATM network, but offers unlimited ATM fee refunds worldwide. You’ll even get an overseas transaction fee waiver when you use your debit card outside of the United States.

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 benefit of 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 for up to $ 600 per claim (limit two claims per 12 month period, with a deductible of $ 50 per claim ).

When you open a Betterment Checking account, you may also consider opening a Cash Reserve account. You don’t have 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 does not offer online bill payment through your account or its mobile app. However, you can use your debit card or routing number and account number to pay bills through any provider’s bill payment program.

Other improvement accounts and services

In addition to its cash management products, Betterment offers a variety of other accounts and services:

  • Automated investment
  • IRA
  • 401 (k) s
  • Wallets
  • Socially responsible investment products
  • Retirement planning services

Improved investment and retirement accounts

Betterment offers investment accounts to help achieve various future savings goals. The robo-advisor offers two levels 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. The investment portfolios are made up of low-cost, globally diversified equity and bond ETFs. A digital plan includes expert financial advice, automatic rebalancing, and tax saving strategies.

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

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

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

  • Traditional ARIs
  • Roth IRA
  • IRA SEP
  • Roth conversions
  • 401 (k) reversals

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

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

Access on the move

Betterment being a robo-advisor, account management is done mainly online and via its mobile application, available on iOS (4.8 out of 5 stars on the App Store) and Android (4.7 out of 5 stars on Google Play The popular mobile The application allows Betterment customers to:

  • Manage accounts
  • Show transactions
  • Add savings goals
  • Configure automatic deposits
  • To transfer money
  • Check deposit
  • Lock your debit card
  • Adjust holdings
  • View performance data and projections

Advantages

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

The inconvenients

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

How improvement accumulates

Betterment LLC’s Cash Reserve Account is a comprehensive cash management account, offering no monthly fees and low minimums. It pairs well with Betterment’s no-charge checking account which offers unlimited ATM fee refunds no matter 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 is not for everyone. Almost all of its services are digital, with little human interaction. If you prefer personal banking and investment assistance, you’ll have to look elsewhere. Betterment Cash Reserve accounts also come with a relatively low APY – you can find higher APYs at the best banks online.

Frequently Asked Questions (FAQ)

What is a Betterment Cash Reserve account?

Cash Reserve is a cash account available through Betterment. The account has no monthly fees, no minimum balance requirements, and no interest income.

Is Betterment Cash Reserve safe?

Yes, Betterment Cash Reserve accounts are secure. Deposits to cash reserve accounts are FDIC insured up to $ 1 million through Betterment partner banks.

Can You Overdraft With Betterment Cash Management Accounts?

Betterment does not charge overdraft fees on its current accounts. If your account does not have sufficient funds, transactions will not be completed.

Betterment is a popular robo-advisor providing 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 a maximum of $ 1 million (up to $ 250,000 per partner bank, including existing deposits at these banks) through a sweep of deposits. Common cash reserve accounts are eligible for FDIC coverage of up to $ 2 million. Enhancement Control Accounts are FDIC insured up to $ 250,000 per depositor through nbkc bank.