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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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Betterment Cash Reserve
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.
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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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.
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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.
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.
Here's a closer look at how the Betterment Cash Reserve account enables you to access your money.
You can deposit money into your Betterment Cash Reserve account in the following ways:
These are your options for withdrawing money from your Betterment Cash Reserve account:
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
The Betterment Cash Reserve account could be the right choice for you if:
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.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.