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Betterment Cash Reserve Review: A High APY for Savers Who Invest With Betterment

Review Updated
Kailey Hagen
Ben Gran
By: Kailey Hagen
Kailey Hagen
Kailey Hagen
Writer

Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what's almost a farm in northern Wisconsin with her husband and three dogs.

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 and  Ben Gran
Ben Gran
Ben Gran

Ben Gran is a freelance writer based in Des Moines, Iowa. He has written for regional banks, fintechs, and major financial services companies. Ben is a graduate of Rice University.

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Our Banking Experts

Ashley Maready
Check IconFact Checked Ashley Maready
Ashley Maready
Ashley Maready
Writer and Editor

Ashley Maready is a former history museum professional who made the leap to digital content writing and editing in 2021. She has a BA in History and Philosophy from Hood College and an MA in Applied History from Shippensburg University. Ashley loves creating content for the public and learning new things so she can teach others, whether it's information about salt mining, canal mules, or personal finance.

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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. APYs are subject to change at any time without notice.

Betterment Cash Reserve might be for you if: You want a high-yield savings account to go along with your Betterment brokerage account. This cash management account from Betterment offers one of the highest APYs we've seen. And it has no minimum balance, unlimited withdrawals, and $2 million of FDIC insurance coverage.

In this Betterment Cash Reserve review, we'll cover the bases to see whether this savings account is for you.

Ratings Methodology
Rates as of Sep 20, 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
5.00% Rate info Circle with letter I in it. Regular APY is 5.00%. (Var. APY as of 4/2/2024). 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.

Compare savings rates

Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.

Account APY Promotion Next Steps
up to 4.50%²
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
New customers can earn up to a $300 bonus with qualifying direct deposits!¹
4.83%
Rate info Circle with letter I in it. To ensure you keep getting the highest rate at UFB, you'll need to keep an eye on their rates. Occasionally, the bank launches new accounts with higher rates. Existing accounts need to contact the bank to request being moved to one of these new accounts.
Min. to earn: $0
N/A
4.25%
Rate info Circle with letter I in it. See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn: $0
N/A

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 review

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.

Full Betterment Cash Reserve review

The Betterment Cash Reserve account is a high-yield cash account that helps Betterment customers grow their savings with the safety of FDIC insurance.

Betterment Cash Reserve interest rate

Account APY Minimum Deposit
Betterment Cash Reserve 5.00% $10
Data source: Betterment.

The Betterment Cash Reserve offers a 5.00% APY, which is one of the best APYs of any bank savings account or brokerage cash management account that we know of. This account is a great choice to keep savings and earn a high rate of interest, with the safety of FDIC insurance. And unlike some high-yield savings accounts and money market accounts, Betterment Cash Reserve doesn't require a minimum balance (after a $10 initial minimum deposit).

Fees

The Betterment Cash Reserve account does not charge fees -- no account maintenance fees, no monthly service fees, and no other fees charged on your Betterment Cash Reserve balance.

Minimum balance

The Betterment Cash Reserve does not require a minimum balance to remain open. However, there's a bit of inconsistency in how Betterment describes this: you might need $10 to earn APY, or $10 to open the account -- but no minimum amount after opening. Either way, whether it's $0 or $10, this is one of the smallest minimum balance requirements of any account that offers such a high APY.

Withdrawal limit

The Betterment Cash Reserve account lets you have unlimited withdrawals. Not every savings account allows for this; some banks enforce Regulation D, which can limit savings account customers to six "convenient withdrawals" per month. A good savings account should not force you to lock up your money -- unlimited withdrawals make the Betterment Cash Reserve account an even better deal.

Mobile app

The Betterment mobile app is available for iOS and Android, and it gets exceptional reviews:

  • 4.7 stars on the App Store
  • 4.7 stars on Google Play

Not every high-yield savings account has such a well-reviewed mobile app and some banks get more complaints about their Android apps. The high ratings of Betterment's mobile app are a good sign that using the Betterment Cash Reserve account on the go will be easy and stress free.

How to access your money

The Betterment Cash Reserve account gives you a few easy ways to access your money.

Deposit options

You can deposit money into your Betterment Cash Reserve account with:

  • Electronic transfer
  • Wire transfer

Withdrawal options

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

  • Electronic transfer
  • Wire transfer

Online user reviews

Betterment is not accredited by the Better Business Bureau, and it gets a grade of "F" on BBB.org. Some complaints on BBB.org about the Betterment Cash Reserve account include disputes about introductory bonus APY "boots," difficulties withdrawing money, and disagreements about verifying external accounts.

Reviews of Betterment are also mostly negative on Trustpilot, with a 1.7 star rating. Betterment Cash Reserve customers complained on Trustpilot about problems with passwords and logins, and difficulty linking external accounts.

Online reviews are not always indicative of the typical customer experience; many large financial institutions get negative reviews on BBB.org and Trustpilot. Betterment has more than 850,000 customers and most are not posting negative reviews online. The high ratings for the Betterment mobile app might be a better representation of what it's like to be a Betterment Cash Reserve customer.

Top perks

Competitive APY: Betterment Cash Reserve's APY of 5.00% is significantly higher than the national average and in line with the best high-yield savings accounts. At 5.00% APY, a $10,000 balance would earn $500 in one year with this account.

Limited-time 0.50% APY bonus for new customers: When you sign up for a new Betterment Cash Reserve account on Betterment's website, open a new account, and make a qualifying deposit within 14 days, you'll receive an extra 0.50% APY for three months. Terms apply.

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.

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. That could make this account a less attractive choice for people who just want a standalone high-yield savings account, without having to sign up for an investment platform.

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.

Is Betterment Cash Reserve FDIC insured?

Yes -- and not only is the Betterment Cash Reserve FDIC insured, but it's "extra" insured. Betterment works with several program banks to hold the cash in its Betterment Cash Reserve accounts, so it can offer eight times the usual amount of FDIC insurance, for a total of $2 million of coverage. Bottom line: with the Betterment Cash Reserve account, your cash is well-protected against bank failure.

Betterment Cash Reserve is right for you if:

You invest with Betterment (or want to open an investment account with Betterment) and want to earn a high yield on your short-term cash savings.

Keep reading about Betterment

Our savings account methodology

At The Motley Fool Ascent, we rate savings accounts on a five-star scale (1 = poor, 5 = best). We evaluate all savings accounts across four main criteria: annual percentage yield (APY), brand and reputation, fees and minimum requirements, and perks that really make a difference -- think ATM access, linked checking accounts, or even branch access.

Our scores are weighted as:

  • APY: 50%
  • Brand and reputation: 20%
  • Fees and minimums: 15%
  • Other perks: 15%

Learn more about how The Motley Fool Ascent rates bank accounts.

FAQs

  • If you have some extra cash, whether it's an emergency fund or just some "sideline" cash that you're waiting to invest in stocks or other assets in your brokerage account, the Betterment Cash Reserve can give you higher yields. With a 5.00% APY, $5,000 of cash would earn $250 per year.

  • The Betterment Cash Reserve works similarly to a savings account, with FDIC insurance and a variable APY (5.00% APY). But it's connected to Betterment's robo-advisor platform, so you can also easily move the money to buy stocks or purchase other securities through a Betterment investment account.

  • Betterment Cash Reserve could be considered a type of savings account, because it's FDIC insured like a bank. But it's also a brokerage cash management account, because you can use the money to buy securities through Betterment's investment platform. It gives you the best of both of these types of accounts, with a high APY.