Few major banks offer interest rates on regular savings accounts above 1% (in fact, the national average is a measly 0.09%), and even fewer banks offer ATM reimbursements worldwide. Fortunately, the popular robo-advisor platform Betterment is out to change that with checking and savings accounts that will likely become consumer favorites over the next few years.
The new program – called Betterment Everyday™ Cash Reserve – has existed in the form of high-interest “Smart Saver” accounts for quite some time now, but Betterment’s checking account option just recently launched. There are many perks involved beyond just higher interest rates, of course; Betterment also offers substantially lower fees, exceptional customer service and access to a variety of high-quality financial services.
If you’ve considered opening an online bank account, then Betterment might be a great addition to your personal finance plan.
Best Online Checking Account
There’s currently a waitlist to sign up for Betterment’s checking accounts and for good reason: there are no fees involved! No account fees, no overdraft fees, no minimum balance fees, and (best of all) there’s no unreimbursed ATM fees. This means that wherever you withdraw funds in the world – at home or abroad – Betterment will reimburse you so the only difference comes from the currency exchange rate.
These perks alone make Betterment checking accounts outshine their traditional banking competitors (which often charge anywhere from $1-5 for out-of-network ATMs, especially those in countries outside of the U.S.). Betterment checking accounts are also FDIC-insured up to $250,000 so you don’t have to worry about whether your funds are safe in this online banking platform.
Save More with Betterment Savings
Betterment Everyday™ Cash Reserve gives consumers access to APYs of up to 2.21% (again, compare this to most other major banks’ 0.09% average rate). There are no account fees, no minimum balance requirements (though a $10 initial deposit is required), and your balances would be FDIC-insured up to $1,000,000.
If you join the Betterment Everyday Checking waitlist, you’ll qualify for an even higher possible APY for your Betterment Everyday Cash Reserve account: 2.21%.
As of July 23, people can start saving with Betterment Everyday Cash Reserve and join the waitlist for Betterment Everyday Checking which will be available later in the year.
Betterment Everyday stands out from the competition for several reasons, most notably:
- One of the highest rates in the country, 2.21% APY*
- FDIC-insured up to $1,000,000†
- No minimum balance
- No fees on balances
- Unlimited withdrawals (compared to a limit of six withdrawals per month with most savings accounts)
- Checking‡ :
- ATM fees reimbursed worldwide
- No account fees
- No overdraft fees
- No minimum balance
- FDIC-insured up to $250,000
Optimize Your Savings Strategy
To get the most out of the Betterment Everyday program, it’s important to save money on a regular basis and have specific, measurable, attainable, relevant and time-bound goals in mind for a particular account. For example, a couple who knows they’re trying to save at least $50,000 for a down payment on a home within 3 years is generally more likely to meet their savings goal than someone who simply starts out with “I want to save more money” and goes from there.
Optimizing your personal financial management strategy requires consistent maintenance, careful calculations and a willingness to adapt your approach to accommodate both expected and unexpected life events. No high-tech robo-advisor with high-interest savings account options can completely overcome a poor savings strategy, which is why the Betterment Everyday Checking and Savings accounts are best paired with well-researched and detailed savings goals.
What does this mean for Smart Saver?
With this launch, we’ve built an even better savings vehicle. Starting in no fewer than 30 days, we’re going to automatically upgrade customers’ Smart Savers to Savings, about which they will, of course, be notified (via email and in-app).
Given that Smart Saver will transition into Savings, we ask that you please remove any mentions of it as a product feature. That said, customers will still be able to create a general investing goal with a 100% bond allocation if they’d like to continue to mirror the Smart Saver portfolio strategy.
What are the benefits of Savings vs. Smart Saver?
Savings comes with a few notable benefits that were not applicable to Smart Saver, including:
- It comes with an APY of up to 2.21% (rate as of 9/20/19)
- It’s FDIC-insured up to $1 million (as compared to Smart Saver, which was not FDIC insured).
- Faster withdrawal times — customers will be able to transfer their money between Savings and their linked checking account within 1–2 business days (instead of 4–5 business days).
But what about Two-Way Sweep and Cash Analysis?
Cash Analysis is Betterment’s tool for helping you determine how much extra cash you have in your checking account. The idea is that your extra cash is money that could be earning more if it were in a different type of account, like Savings, which can help mitigate the effects of inflation.
By organizing and predicting your expense needs, Cash Analysis tells you if you’re holding an appropriate amount of cash, if you have too little in your checking account, or if you have extra cash that you should move into Savings.
You can link your external checking account or Betterment Everyday Checking account to Betterment Everyday Cash Reserve, and Two-Way Sweep will move any extra money — that is, money that Cash Analysis sees as excess, based on your regular spending — into your Cash Reserve.
It also can move cashback to your checking account when your balance runs low. You can change the target balance for your checking account, and Betterment sends an alert before making a sweep, which gives you the opportunity to cancel the transaction if you’d like.
Betterment is well-known for its array of financial products ranging from retirement savings accounts to general investing and savings funds. The algorithm-based financial advisor typically has some of the lowest fees in comparison to traditional human advisors, and Betterment investors often notice substantial gains in their portfolios compared to casual investors who pick their own stocks and bonds on other online platforms.
Should I Sign Up for Betterment Everyday™?
Why should you pay your bank to hold money for you when it’s out there making money off of your deposits? Online banks have picked up on consumers’ frustration with major banks offering lousy perks (0.09% interest!) and steep costs (monthly account fees?) on their checking and savings accounts, which is why most online-based banks tend to outperform traditional banking giants in the areas of customer satisfaction and pricing.
Betterment is no stranger to offering everyday consumers/investors fantastic pricing on high-quality financial products, and its new Everyday™ checking and savings accounts are no different. The added perks of worldwide ATM reimbursements, easy online account access, jaw-droppingly high interest rates on savings deposits and FDIC-insured accounts makes Betterment one of the best options available for consumers who want their money to work harder for them.
If you want to exponentially increase the amount of interest you’re earning on savings deposits, reach your savings goals in more efficient ways and save money on pointless account fees, then Betterment Everyday™ Checking and Saving accounts are ideal for your situation.
*The Betterment Everyday Cash Reserve (“Savings”) annual percentage yield (“APY”) is based on commitments from program banks if the program was available as of 9/20/2019. 2.21% APY is a promotional offer for individuals who sign up for the Betterment Everyday Checking waitlist and applies to cash deposited into Savings for the duration of 2019. APY is a variable rate and may change at any time. Current APY can be found here. No minimum balance is required. There is a minimum deposit of $10.