Betterment Cash Reserve and Checking – Cash Management Account [Detailed Review]

Betterment Cash Reserve Account

A Betterment Cash Management Account or the Betterment Cash Reserve is a high-yield cash management account (CMA) that stores your cash while making an investment decision (how to invest it). It is not created as a savings account but mainly as an alternative to a traditional one.

New customers can earn an APY of 5.50% after signing up for Cash Reserve for three months until the customers receive the base rate. Currently, the account is earning a base rate of 5.00% APY, which is more competitive as compared to the high-yield savings account. New customers should sign up for a Cash Reserve Account with the help of an offer link and deposit within the duration of 14 days.

Furthermore, it allows you to increase your funds freely with $0 fees. You’re also allowed to make unlimited withdrawals and need not worry about maintaining the minimum account balance to keep your account in active mode.

As Betterment isn’t a bank, your deposits are protected up to $2 million ($4 million for joint accounts) for FDIC insurance, all thanks to its partner banks.

Betterment Cash Management Account partners with numerous banks to sweep deposits into different bank accounts that offer extra protection. Some of the partner banks of the Betterment are:

• Barclays Bank Delaware
• Bell Bank (Fargo, North Dakota)
• Cross River Bank
• CIBC Bank USA
• First Internet Bank of Indiana
• First Merchant Bank
• HSBC Bank USA, N.A.
• Morgan Stanley Private Bank, National Association
• Morgan Stanley Bank, N.A.
• NexBank
• State Street Bank and Trust Company
• The Bancorp Bank
• Truist Bank
• Webster Bank, N.A.
• Wells Fargo Bank, N.A.

Betterment Products

1. Debit Card Rewards

Earn automatic cash back at specific retailers only; the reward percentage depends on the retailer.

2. Checking Account

This mobile-centric Betterment checking account offers you a debit card that doesn’t allow you to make ATM transactions or pay foreign transaction fees.

3. Financial Planning

If you want a personal touch, robo-investing is best for you. You could opt to work with Betterment’s financial experts and take some advice from them. The annual fee is 0.40%, and to qualify, a minimum balance of $100,000 is required.

4. Investing

You are free to select between traditional investing options, like IRAs and 401(k)s, but you can also choose crypto investing if you want to take a modern approach.

Betterment Checking

Betterment checking is a mobile-first checking account that comes with a complimentary contactless Visa debit card. It does not have an ATM network but still offers unlimited ATM fee reimbursements worldwide. Foreign transaction fees will be waived when you leverage a debit card if you are outside the U.S.

Betterment Checking is available as a joint account. Deposits in the Betterment Cash Management Account are insured by FDIC insurance for up to $250,000/depositor. Checking accounts are offered via an amalgamation with NBKC Bank.

Another benefit of Betterment Checking is cell phone insurance. Paying your mobile phone bill via your Betterment debit card will cover your phone against theft and damage up to $600 per claim (there is a restriction of two claims per year and a $50 deductible per claim).

When you open an account with Betterment Checking, consider opening a Cash Reserve account as well. Betterment Checking and Cash Reserve can be combined to provide a complete package of cash management solutions.

Betterment does not provide online bill pay via mobile app or your account. However, you can leverage your routing number, account number, or debit card to pay bills via any vendor’s bill-pay program.

How Does Betterment Cash Management Account Stacks Up?

Betterment LLC’s Cash Management Account offers minimum deposits and no monthly fees. It goes well with Betterment’s no-fee account, which offers unlimited ATM reimbursement fees irrespective of where you’re traveling. While Betterment is a robo-advisor, all its banking services and products are the equal point of attraction.

Almost all the Betterment services are digital, with only a pinch of human interaction. You must move around if you need more investment and personal banking help. Betterment also offers nominal returns. However, you will get higher APYs at different online banks.

Betterment Cash Management Account Interest Rate

Betterment Cash Reserve allows you to accelerate your savings with a high-yield savings account. It secures your money while letting you earn ten times the national average.

Let’s better understand this with the help of a table.

Betterment Cash Management Account Fees

There is a $0 fee or no fee for incoming wire transfers, but your bank may charge for sending the amount, and these transfers generally take one or two working (business) days.

Customers holding Betterment Cash Management Accounts can freely move money in and out of their CRA as they wish. 

Pros and Cons of Betterment Cash Management Account

Pros

Strong APY: The Betterment Cash Management Account offers 5.00% APY. At the same time, new customers can earn 5.50% APY for 90 days after funding their accounts, which must be performed within 14 days of opening an account. This account has a higher interest rate than most traditional bank accounts. 

Debit cards are available: You can use Betterment’s Visa debit card to access funds available in your Betterment Checking Account.

No minimum balance required: Other financial institutions cater to higher interest rates depending on the larger balance – you can increase your deposits with Betterment at $10. 

$2 million FDIC-insured: Customers can enjoy up to $2 million via partner banks. FDIC insured up to $250,000/depositor/account ownership/institution category. Betterment sweeps customers’ funds into different partner banks to get coverage of up to $2 million (up to $4 million for joint accounts).

ATM fees are reimbursed: Betterment reimburses the ATM fees incurred worldwide.

Cons

No check writing: The only way to withdraw and deposit funds is via online transfer (international) to or from a linked checking account.

No branches: With Betterment, customers can get help only remotely by communicating with customers over email, phone, and Twitter support.

The Bottom Line 

The Betterment Cash Management Account is a Cash Reserve, a high-yield account for storing cash and making investment decisions. 

So, if you’re planning to invest in Betterment Cash Reserve, it’s advisable to research its benefits and features to maximize your returns and growth.

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Happy Investing!