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Updated on Wednesday, May 19, 2021
Betterment launched in 2010 as an online investment platform. As the company expanded, it has added more services, including a checking and a savings account, which are available to customers anywhere in the U.S.
As a digital organization, Betterment has no physical branches. This helps keep costs low and creates some unique account perks. However, Betterment is missing some of the features of a full-service bank. To help you decide whether Betterment is right for your money, we cover the key details of its accounts below.
Betterment savings accounts
- APY: 0.30%
- Minimum opening balance: $10 (but no minimum to earn APY)
- Monthly fee: None
Betterment Cash Reserve is a high-yield “cash account”. Its interest rate currently far exceeds the national average and is competitive with the best savings accounts in the country. The account also does not charge a monthly fee and requires no minimum balance, though you do need to deposit at least $10 to open an account.
Since it’s not a traditional bank, the Betterment savings account does have some extra hurdles when it comes to moving money in and out. To add and withdraw money from the Betterment savings account, you need to make transfers using a linked checking account, whether the Betterment checking account or one with an external bank. You can also fund the account through wire transfers.
Betterment Cash Reserve does not come with a debit card, so you cannot withdraw cash directly from this account. You also cannot direct deposit your paycheck or transfer funds straight into the Cash Reserve account any other way as the money needs to go through another checking account first.
However, Betterment Cash Reserve does have some advantages compared to traditional savings accounts. First, there’s no limit to the number of withdrawals you can make each month. In addition, the Betterment savings account offers much higher Federal Deposit Insurance Corp. (FDIC) insurance: $1 million versus the standard $250,000 by partnering with multiple other banks to hold the funds.
Another useful account feature offered through the app is Two-Way Sweep analysis, which makes it easier to optimize your balances in checking and savings. If there’s more than you need in checking based on an analysis of your typical spending, the tool automatically transfers the excess to your Cash Reserve account, to earn more interest. If there’s too little in checking, it transfers funds from your Cash Reserve balance.
For more options when it comes to your savings, check out our picks for the best savings accounts.
Betterment checking accounts
- APY: N/A
- Minimum opening balance: None
- Monthly fee: None
Betterment also offers a checking account for day-to-day spending. While this account does not earn interest, it does a terrific job minimizing fees. Betterment Checking does not have a minimum balance requirement and does not charge a monthly maintenance fee. There is also no overdraft charge if you accidentally withdraw past your balance.
The Betterment Checking account comes with a debit card, which you can use to make purchases and free withdrawals from any ATM in the world. Betterment will refund any fees charged by the ATM owner, including international fees. If you use the debit card to make purchases, you can also earn cash back with select merchants. Betterment does limit ATM withdrawals to $500 per day, and debit card transactions to $2,000.
To fund Betterment Checking, you can make transfers from another linked bank account, direct deposit your paycheck or deposit paper checks using the mobile app. However, you cannot use an ATM to deposit cash or paper checks, nor can you make a wire transfer. While paper checks are available, Betterment Checking does not offer bill pay services, money orders, cashier’s checks or international money transfers.
Even though Betterment is not a bank itself, you still receive FDIC insurance on your balance up to the normal $250,000 through its partner, nbkc bank, member FDIC.
For more options, check out these top-notch checking accounts.
Betterment does not offer any certificates of deposit (CDs). It only offers the checking and savings account as banking options, detailed above. If you are interested in using a CD to earn long-term interest on your savings, you will have to look elsewhere.
Check out MagnifyMoney’s CD roundup for the best options on the market today.
Customer experience at Betterment
Betterment is a completely digital financial institution, with no physical branches or ATMs of its own. Customers should have no issue with ATM access though, as Betterment allows free withdrawals from any ATM in the world by reimbursing the fees.
As an online organization, Betterment also offers excellent digital tools. You can sign up for an account through its website or mobile app, which was redesigned in 2019. Not only can you use the app to check your account balance and cashback rewards, you could also access automated tools, like Two-Way Sweep Analysis to move money between savings and checking, or Betterment’s robo-investing platform.
While you can’t get face-to-face customer support from Betterment, you will have access over the phone and via email. Its customer service line is open Monday to Friday, from 9 a.m. to 6 p.m. For more specialized help, you could schedule a call with one of Betterment’s financial advisors, though this comes with a fee, starting at $299 an hour.
Consumer reviews with the Better Business Bureau (BBB) are mostly negative for Betterment and they have a score of 1 out of 5, based on 10 reviewers. The reviewers complained that they ran into problems with their accounts, like trouble transferring funds, and it was very difficult and time-consuming to reach a representative at Betterment for help. This could show one of the downsides of working with a free, online-only organization as one reviewer even noted “you get what you pay for.”