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Betterment Checking and Cash Reserve: Online Cash Management Account Review
Betterment’s cash management options have strong features, including a high annual percentage yield for Betterment Cash Reserve.
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Like most cash management account providers, Betterment is not a bank. It’s an online brokerage that helps customers invest their money. Betterment (paid non-client promotion*) sweeps customers’ funds into accounts at program banks, where they benefit from Federal Deposit Insurance Corp. insurance. Betterment has two complementary accounts: Betterment Cash Reserve and Betterment Checking.
Betterment Cash Reserve offers a solid annual percentage yield with no fees and no minimum balance requirement.
Betterment Checking has a debit card available and reimburses ATM fees worldwide. This account also has no monthly fees or minimum balance requirement.
Best for: Betterment customers who want a place to stow their cash while it isn’t invested and want to earn a high interest rate.
*Paid non-client promotion
NerdWallet doesn’t invest its money with this provider, but they are our referral partner – so we get paid only if you click through and take a qualifying action (such as open an account with or provide your contact information to the provider). Most importantly, our reviews and ratings are objective and are never impacted by our partnerships. Our opinions are our own. Here is a list of our partners and here’s how we make money.
Where Betterment shines
Where Betterment falls short
Up to 4.75% annual percentage yield** on Betterment Cash Reserve for new account owners for three months once they fund their account (with a qualifying deposit within 14 days of opening the account); 4.25% after promotion ends and for current customers.
No monthly fees or minimum balance.
ATM fees reimbursed worldwide for checking account.
Offers debit cards for Betterment Checking account.
No interest on checking account.
No branches.
No check deposit or writing.
Limited live phone support hours and only virtual assistant chat support.
**See more from Betterment
Betterment says: "Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to partner banks are conducted through the clients' brokerage accounts at Betterment Securities. Learn more: https://www.betterment.com/cash-reserve"
Betterment says: "*Current promotional rate; annual percentage yield (variable) is 4.25% as of 11/8/24, plus a .50% boost available as a special offer with qualifying deposit. $10 to start. Terms apply; if the base APY increases or decreases, you’ll get the .50% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks (www.betterment.com/cash-portfolio) conducted through clients’ brokerage accounts at Betterment Securities. FDIC is subject to certain conditions."
Betterment says: "For Cash Reserve, Betterment LLC and Betterment Securities do not charge fees on your CR balance."
Betterment says: "‡Checking accounts and the Betterment Visa Debit Card provided and issued by nbkc bank, Member FDIC. Checking made available through Betterment Financial LLC. Neither Betterment Financial LLC, nor any of their affiliates, is a bank. Betterment Financial LLC reimburses ATM fees and the Visa® 1% foreign transaction fee worldwide, everywhere Visa is accepted."
Strong APY for Cash Reserve. The APY on Betterment Cash Reserve is currently a high 4.25%.*** New customers can earn 4.75% for three months after they fund their accounts, which they must do within 14 days of opening it. While not a bank account itself, this account has a rate that’s higher than most traditional brick-and-mortar bank accounts.
***Betterment says: *Current promotional rate; annual percentage yield (variable) is 4.25% as of 11/8/24, plus a .50% boost available as a special offer with qualifying deposit. $10 to start. Terms apply; if the base APY increases or decreases, you’ll get the .50% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks (www.betterment.com/cash-portfolio) conducted through clients’ brokerage accounts at Betterment Securities. FDIC is subject to certain conditions.
No monthly fees or minimum balance. Both the Betterment Cash Reserve and Betterment Checking products have no monthly fees or minimum balances.
Customers can withdraw cash, and ATM fees are reimbursed. Betterment reimburses all ATM fees incurred worldwide on its Betterment Checking account.
Debit cards are available. Customers can use a Betterment Visa debit card to access their funds in Betterment Checking.
FDIC coverage up to $2 million through affiliated partner banks. The FDIC typically insures up to $250,000 per depositor, per institution and per account ownership category. Betterment sweeps customers' funds into multiple partner banks to ensure coverage of up to $2 million (and up to $4 million for joint accounts).
Downsides:
No check deposits or check writing. With Betterment Cash Reserve, the only way to deposit and withdraw funds is through online transfer to or from a linked checking account.
Things to consider:
APY can fluctuate without notice. As with other cash management products, the program banks that Betterment partners with are subject to the changing federal funds rate, which is the set rate at which banks loan money to one another. This means that Betterment's APY varies in conjunction with the rates of its program banks. As with savings accounts at regular banks, the APY you open your account with is not guaranteed.
NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
High-quality website. The Betterment website is well-designed, and information on its different products is easy to find. There is also a robust Frequently Asked Questions section on the site that provides additional information on how Betterment’s products work.
High app store ratings. The Betterment mobile app is highly rated in both the Apple App Store and the Google Play store.
Downsides:
No branches. Betterment is an online-only service provider, so customers can receive help only through remote means of communication such as phone and mail.
Limited live phone support hours and no chat support. Phone support is available Monday through Friday, 9 a.m. to 6 p.m. ET. The site has no live online chat support, although a virtual chat assistant is available.
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A savings account is a place where you can store money securely while earning interest.
A savings account is a place where you can store money securely while earning interest.
4.00%SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
4.75%*Current promotional rate; annual percentage yield (variable) is 4.25% as of 11/8/24, plus a .50% boost available as a special offer with qualifying deposit. $10 to start. Terms apply; if the base APY increases or decreases, you’ll get the .50% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks (www.betterment.com/cash-portfolio) conducted through clients’ brokerage accounts at Betterment Securities. FDIC is subject to certain conditions.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
4.25%Annual Percentage Yield (APY) is subject to change at any time without notice. Offer applies to personal non-IRA accounts only. Fees may reduce earnings. For CD accounts, a penalty may be imposed for early withdrawals. After maturity, if your CD rolls over, you will earn the offered rate of interest in effect at that time. Visit synchronybank.com for current rates, terms and account requirements. Member FDIC
Term
13 months
Checking accounts are used for day-to-day cash deposits and withdrawals.
Checking accounts are used for day-to-day cash deposits and withdrawals.
0.10%Advertised Annual Percentage Yield (APY) is variable and accurate as of 07/01/2024. Rates are subject to change at any time before or after account opening.
