Betterment Cash Reserve Review 2023

Betterment, known for its innovative and intuitive technology, has introduced the Betterment Cash Reserve, a high-yield savings account to guard your funds. In this review, we will scrutinize this new feature to help you make well-informed financial decisions.

Key Takeaways

  1. Higher Returns: Betterment Cash Reserve offers a high annual percentage yield (APY) that promises higher returns on your savings.
  2. Safety: With FDIC insurance up to $1 million, your funds are safe even in the unlikely event of bank failure.
  3. No Limitation on Withdrawals: Offers unlimited withdrawals to your funds without incurring any penalties.
  4. User-friendly Interface: Both the app and web interface are designed keeping users comfort in mind.

What is Betterment Cash Reserve?

Betterment is a robo-advisor that provides automated investment guidance. They’ve ventured into the world of high-yield savings with the Betterment Cash Reserve- a cash management option that prioritizes the safety of your money.

Betterment Cash Reserve is a high-yield cash reserve account designed for holding and growing your cash over time. The dynamics of Betterment’s Cash Reserve sets it apart from your typical savings account.

Features and Benefits

  • High Yield: One of the most alluring features is its competitive APY (Annual Percentage Yield), which is much higher than the national average.
  • Unlimited Withdrawals: There are no limits on withdrawals, providing easy access to your cash when you need it.
  • Ease of Use: The user-friendly app and website make managing your cash reserve straightforward.
  • FDIC insured: It covers up to $1 million, providing a safe haven for your funds.

Pricing and Fee Structure

One of the things to love about Betterment Cash Reserve is that it comes without a monthly maintenance fee. Also, nothing is charged for withdrawals or low balance.

Drawbacks

No product is without its cons. Betterment Cash Reserve does not offer ATM cards, checks, or direct bill pay. Therefore, while it serves as an excellent place to park your money, it may not replace your daily checking account.

Who is Betterment Cash Reserve for?

It’s ideal for those who plan on keeping a substantial sum of money in their account and are looking forward to high yields, unlimited transfers, and FDIC insurance.

Comparison with Other Checking Accounts

In this section, we will compare Betterment Cash Reserve with a few other popular checking accounts to assess its efficacy and benefits. The chosen accounts are Ally Bank Interest Checking, Discover Cashback Debit, and Chime Spending Account.

Betterment Cash Reserve vs. Ally Bank Interest Checking

Betterment Cash Reserve:

  • High APY (higher than the national average).
  • No monthly maintenance fee.
  • FDIC insured up to $1 million.
  • Unlimited withdrawals.
  • No ATM cards/checks/direct bill pay.

Ally Bank Interest Checking:

  • Competitive APY (tiered system).
  • No monthly maintenance fee.
  • FDIC insured up to $250,000.
  • Free Ally Bank branded ATMs and reimbursement for out-of-network ATM fees up to $10 per statement cycle.
  • Free checks and debit cards.
  • Overdraft protection available.

Betterment Cash Reserve vs. Discover Cashback Debit

Betterment Cash Reserve:

  • High APY.
  • No monthly maintenance fee.
  • FDIC insured up to $1 million.
  • Unlimited withdrawals.
  • No ATM cards/checks/direct bill pay.

Discover Cashback Debit:

  • No APY.
  • No monthly maintenance fee.
  • FDIC insured up to $250,000.
  • 1% cashback on up to $3,000 in debit card purchases/month.
  • 60,000+ free ATMs and reimbursement for out-of-network ATM fees.
  • No checks but offers free debit cards and direct bill pay.
  • Overdraft protection available.

Betterment Cash Reserve vs. Chime Spending Account

Betterment Cash Reserve:

  • High APY.
  • No monthly maintenance fee.
  • FDIC insured up to $1 million.
  • Unlimited withdrawals.
  • No ATM cards/checks/direct bill pay.

Chime Spending Account:

  • No APY.
  • No monthly maintenance fee.
  • FDIC insured up to $250,000.
  • 38,000+ free ATMs through the MoneyPass and Visa Plus Alliance networks.
  • Sends notifications when your card is used and updates account balance automatically.
  • Chime’s SpotMe overdraft protection available.

Conclusion

The Betterment Cash Reserve procures a balance between earning a reasonable return and accessing your funds whenever necessary. Therefore, if you’re looking for a safe, high-yield place to store your capital, Betterment Cash Reserve might be the right place for you. Betterment Cash Reserve is an excellent choice for high-yield savings due to its competitive APY, no monthly maintenance fee, and FDIC insurance up to $1 million. However, it lacks ATM cards, checks, and direct bill pay options. In contrast, the other checking accounts mentioned above offer these features, making them more suitable for everyday transactions. It is prudent to consider your financial goals and account requirements before making a decision.

Frequently Asked Questions (FAQs)

What is Betterment Cash Reserve?

Betterment Cash Reserve is a cash management option offering a high-yield savings account. Betterment, a robo-advising platform, launched this feature to provide higher returns and safer protection for your money.

What is the APY on Betterment Cash Reserve?

While the APY as of 2023 has not been specifically disclosed, its competitive rates can be expected to be significantly higher than the national average.

How many withdrawals can be made from Betterment Cash Reserve?

Betterment Cash Reserve allows unlimited transfers and withdrawals from your savings account.

Are there any service charges or fees?

Betterment Cash Reserve is a zero-fee account with no monthly maintenance charges, withdrawal fees, or low balance fees.

Is my money safe in Betterment Cash Reserve?

Yes, your funds are FDIC insured up to $1 million, means they’re protected and safe in the event of a bank failure.

Can it replace my daily checking account?

While Betterment Cash Reserve is an excellent place for high-yield savings, it currently does not provide ATM cards, checks, or direct bill pay, which may make it less convenient for daily transactions. However, it’s a powerful tool for growing your savings.