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Betterment Cash Reserve Review: A Competitive Offer for Betterment Investors

Review Updated
Kailey Hagen
By: Kailey Hagen

Our Banking Expert

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield

Few fees and a high annual percentage yield (APY) are the biggest savings account draws for most people. And the Betterment Cash Reserve account succeeds on both these counts, offering a high interest rate with unlimited monthly withdrawals and eight times the national average FDIC insurance.

In this Betterment Cash Reserve review, we'll take a closer look at all the perks this account has to offer to help you decide if it's right for you.

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Ratings Methodology
Rates as of Mar 28, 2024

Betterment Cash Reserve

Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
APY
4.75%-5.50% Rate info Circle with letter I in it. Regular APY is 4.75%. New customers who sign up on Betterment's site, open an account, and make a qualifying deposit within 14 days can receive an extra 0.75% on their APY for three months. Terms apply. (Var. APY as of 7/31/2023). New customers only with qualifying deposit. Terms & conditions apply. Betterment LLC, not a bank.
Min. To Earn APY
$0
  • Competitive APY
  • $2 million in FDIC insurance
  • Unlimited withdrawals
  • No maintenance fee
  • Only available to Betterment clients
  • No ATM card

The Betterment Cash Reserve account offers some unusual perks, like $2 million in FDIC insurance, alongside more standard savings account benefits, like a high APY. Its lack of fees only adds to its appeal. But the fact that it's only available to Betterment investors may encourage some to look at other homes for their cash.

High-yield savings account comparison

We recommend comparing high-yield savings account options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of standout accounts.

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Account APY Promotion Next Steps
up to 4.60%
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn: $0
N/A
4.35%
Rate info Circle with letter I in it. 4.35% annual percentage yield as of March 28, 2024
Min. to earn: $1
N/A
5.05% APY for balances of $5,000 or more
Rate info Circle with letter I in it. 5.05% APY for balances of $5,000 or more; otherwise, 0.25% APY
Min. to earn: $100 to open account, $5,000 for max APY
N/A

Full Betterment Cash Reserve review

Top perks

Competitive APY: The Betterment Cash Reserve's APY of 4.75%-5.50% is significantly higher than the national average and in line with what other best high-yield savings accounts are offering. Depending on your balance, you could earn tens or hundreds of dollars annually in interest with this account.

Limited-time APY bonus for new customers: When you sign up for a new Betterment Cash Reserve account on Betterment's web site, open a new account, and make a qualifying deposit within 14 days, you'll receive an extra 0.75% on your APY through Dec. 31, 2023. Terms apply.

$2 million in FDIC insurance: Betterment spreads your money between several partner banks to give each person $2 million in FDIC insurance. Joint account holders get $4 million in FDIC insurance. This is eight times the average $250,000 ($500,000 for joint accounts) that most banks offer.

Unlimited monthly withdrawals: You won't incur any fees for making too many monthly withdrawals from your Betterment Cash Reserve account. Though less common now than in the past, there are still many savings accounts that charge customers for taking money out more than six times per month.

READ MORE: What Is Regulation D?

No maintenance fee or minimum balance requirement: Betterment requires at least $10 to open your account, but after this, you don't need to maintain any minimum balance or pay a monthly maintenance fee to own this account.

What could be improved

Accessibility: The Betterment Cash Reserve account is currently only available to those who have a Betterment investment account. Those who don't invest in Betterment will have to explore some other options.

ATM card: This account doesn't provide you with any way to access your cash directly. You must transfer your funds to a checking account before you can withdraw them. Transferring to accounts at external banks could take one to two business days.

How to access your money

Here's a closer look at how the Betterment Cash Reserve account enables you to access your money.

Deposit options

You can deposit money into your Betterment Cash Reserve account in the following ways:

  • Electronic transfer
  • Wire transfer

Withdrawal options

These are your options for withdrawing money from your Betterment Cash Reserve account:

  • Electronic transfer
  • Wire transfer

We tried it: Our team's firsthand experience

Here at The Ascent, we pride ourselves as real users of most of the products across our site. Our Technology Leader, Tim White, uses the Betterment Cash Reserve himself. Here's Tim's firsthand experience:

"I've been a Betterment investing customer since 2014, and I jumped on their Cash Reserve as soon as it came out. I wanted to be able to park money I was going to use in the next year in a risk-free place. At 20x the interest of my local bank account, it was a no-brainer. And after the bank crashes in 2023, I was super-glad that Betterment spreads your money across a bunch of partner banks. That way you end up being FDIC insured for way more than a single bank would allow."

–Tim White, Technology Leader here at The Ascent, a Motley Fool Service

Betterment Cash Reserve is right for you if:

The Betterment Cash Reserve account could be the right choice for you if:

  • You already invest with Betterment or are interested in doing so.
  • You want to keep large sums of money in the account.
  • You hope to earn a high yield while paying fewer fees.

Keep reading about Betterment

Our savings account methodology

At The Ascent, a Motley Fool Service, we rate savings accounts on a five-star scale (1 = poor, 5 = best). Our criteria? We dive deep into factors like APY, account minimums and fees, along with features that really make a difference -- think ATM access, linked checking accounts, or even branch access. We blend this with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best. Our aim is to maintain a balanced best-of list featuring top-scoring products from reputable brands offering competitive APYs and standout features.

Our Banking Expert