Betterment Cash Reserve Account Review 2024

Betterment offers a high-yield cash reserve account to help you grow your money faster. Learn how this account works to help decide if it's right for you.
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Editor's Rating
4.5
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Written by Rebecca Lake
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Managing Editor
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Cash reserve accounts combine some of the features of checking accounts and high-yield savings accounts into a single money management vehicle.

You can open a cash reserve account at a brokerage to hold funds you plan to invest later or simply to get a better interest rate on balances.

Betterment offers cash reserve accounts and investing in one place with no hidden fees. You can earn a competitive rate and enjoy up to $1 million in FDIC coverage.

Not sure if a cash reserve account is right for you? Our Betterment Cash Reserve Account review offers a closer look at how this unique savings option works.

Betterment Cash Reserve Account At-a-Glance

Compare Checking and Cash Management Accounts

Compare Betterment Cash Reserve to other cash management and checking accounts to see how it stacks up. Check rates and more.

Pros and Cons of Betterment Cash Reserve Accounts

While there’s a lot to like about the Betterment high-yield cash account, there are a few potential downsides to keep in mind.

The main benefit of this account is its high APY. However, if you’re more comfortable banking at a branch, you may want to look for another high-yield savings option.

Here’s how the pros and cons compare.

Pros

  • Easy online account opening
  • Manage your accounts from anywhere with online and mobile banking
  • Earn competitive rates on deposits
  • FDIC-insured savings of up to $1 million
  • No minimum opening deposit requirement
  • Pay no monthly maintenance fees or minimum balance fees
  • Link to external accounts for convenient transfers
  • No excess withdrawal limits or fees

Cons

  • No branch banking
  • Live chat support is virtual only
  • No ATM card access, debit card access, or checks

Compare to Other Accounts

Betterment’s Cash Reserve account is a high-yield cash account that functions offers unlimited withdrawals while allowing you to earn interest.

If you want to earn a solid rate on account balances, here are a few other banking options you might consider.

American Express® Checking

American Express® offers an FDIC-insured checking account alongside its suite of credit card products. The account has no monthly maintenance fees and no minimum balance requirement to open.

You can earn a competitive APY on balances with American Express Checking, though the rate may be below what you can get with a Betterment Cash Reserve account.

However, you can earn membership rewards with debit card purchases and make fee-free withdrawals at in-network ATMs.

Aspiration Spend & Save

Aspiration offers a new spin on banking with its Spend & Save account.

You can earn interest on balances, with a higher rate available when you upgrade to Plus status.

There’s a monthly fee for that, but you get benefits like 10% back on debit card purchases and unlimited access to more than 55,000 ATMs nationwide.

You’ll need at least $10 to open a Spend & Save Plus account.

There’s no minimum balance requirement for basic accounts.

However, the APY you’ll earn is well below what you’d get with a Betterment Cash Reserve account.

Axos Bank Money Market

Axos Bank offers online money market accounts that earn a competitive APY.

The account also includes check-writing privileges and a debit card that you can use to make purchases, pay bills, or withdraw cash at ATMs.

That’s a plus if you’re looking for a convenient way to manage money. However, there are limits on the number of withdrawals you can make each month.

The Axos Money Market account also has a $1,000 minimum deposit requirement.

Who Is a Betterment Cash Reserve Account For?

A Betterment Cash Reserve account could be a good fit if you’re comfortable banking online and you’re interested in getting the best combination of higher rates and lower fees.

You might consider opening a high-yield account if you:

  • Invest or are planning to invest through Betterment and want a convenient place to hold uninvested cash
  • Want to earn a highly competitive rate on your balance
  • Are hoping to avoid the high fees that traditional checking and savings accounts often charge
  • Would like to expand your FDIC coverage limits

A Cash Reserve account can also appeal to anyone who wants to open a bank account with a minimal amount of money.

There’s no minimum deposit required, and it takes just $10 to start earning interest.

Top Features of the Betterment Cash Reserve Account

Cash reserve accounts are not your typical checking account, and you might be wondering whether you should consider opening one.

We’re breaking down some of the highlights of what you can expect if you decide to open a high-yield checking account with Betterment.

Account Types

Our review is focused on the cash reserve account, but Betterment also offers a no-fee checking account, as well as investment accounts.

If you’d like to invest, spend, and save in the same place, you can do that here without the steep fees you’ll pay at traditional banks.

Competitive Rates

Betterment’s Cash Reserve account offers one of the most competitive rates of any high-yield checking, savings, or money market account option.

That’s an advantage if you’d like to grow your money faster while still being able to make withdrawals without restrictions or limitations.

Low Minimums

Traditional checking or savings accounts may require $100, $500, or more to open. Fortunately, you can open a Betterment Cash Reserve account with as little as $10.

You may appreciate that if you’re just getting started with banking or investing and aren’t working with a lot of money yet.

Convenient Access

Betterment makes it easy to manage your account online or through the Betterment app. You can make unlimited withdrawals, which makes it easy to access funds when you need them.

With traditional savings or money market accounts, on the other hand, you may be capped at six withdrawal transactions per month.

FDIC Coverage

The Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks in the rare event that a bank fails.

The standard FDIC coverage limit is $250,000 per depositor, per account ownership type, and per financial institution.

Betterment allows you to enjoy a much higher limit of $1 million through its program banks. That’s significant if you tend to maintain much higher balances in your checking account or savings account.

How to Get Started

If you’d like to open a cash reserve account, you can get started through the Betterment website. You’ll need to give Betterment some basic information, including your:

  • First and last name
  • Mailing address
  • Date of birth
  • Social Security number

You’ll also need to register your email and create a unique password, then choose two security questions. Once you’ve done that, you’ll tell Betterment about your employment, income, and experience with investing.

The final step is funding your account. If you don’t have an investment account with Betterment, you’ll need to link an external bank account using your routing number and account number. From there, you can make your initial deposit.

Rating the Features

You may have less experience with cash accounts than with traditional checking or savings accounts. If you’re on the fence about whether Betterment might be right for you, here’s how the features measure up.

User experience

Betterment has a user-friendly website, and it’s easy to open your account in minutes.

Once your account is open, you’ll have access to a detailed dashboard, and you can even link accounts at other banks so you can see all of your money in one place.

Fees

There are no monthly maintenance fees for a Betterment Cash Reserve account. That means you don’t have to worry about fees eating away at the interest you’re earning.

Rates

As mentioned, Betterment offers an outstanding rate for cash accounts.

The rate applies across all balances, so you can grow your balance whether you plan to save a little or a lot.

Variety

Compared to traditional banks or online banks, Betterment offers fewer account options. However, it makes up for that by stacking the Cash Reserve account with plenty of great features and benefits.

Customer Support

Betterment offers 24/7 virtual chat support if you need answers to basic questions about your accounts.

If you need to speak to someone, you can call customer support at (718) 400-6898 Monday through Friday, from 9:00 a.m.-6:00 p.m. (ET).

Access

You’ll be able to manage your accounts through the Betterment website or the Betterment mobile app.

You can get a debit card if you open a no-fee checking account with Betterment, though this card will not work with the Cash Reserve account.

Pros and Cons of Betterment Cash Reserve Accounts

While there's a lot to like about the Betterment high-yield cash account, there are a few potential downsides to keep in mind. Here's how the pros and cons compare.

The main benefit of this account is its high APY. However, if you’re more comfortable banking at a branch, you may want to look for another high-yield savings option.

Bottom Line

Cash reserve accounts can offer a different take on traditional savings options and offer some of the highest rates.

If you’re already investing with Betterment, you might consider adding a cash account to your personal finance plan, but if you prefer more traditional banking, you may not like the idea of all your banking being online.

Frequently Asked Questions (FAQs)

Is Betterment a bank?

No, Betterment is not a bank, but it does offer bank accounts through partner program banks. The Betterment Cash Reserve account and no-fee checking account are both FDIC-insured through those program banks, so you don’t have to worry about losing money.

Is the Betterment Cash Reserve account a checking account?

No, the Betterment Cash Reserve is not a checking account. Instead, it’s an alternative to a traditional high-yield savings account.
The Betterment Cash Reserve account earns a competitive rate with no monthly fees. Unlike other savings accounts, there are no withdrawal limits.

Are Betterment accounts FDIC-insured?

Betterment is not a bank, so it’s not a member-FDIC institution. However, it does offer FDIC coverage through its program banks.
The coverage limit is $1 million, or four times the regular FDIC limit. Your FDIC coverage is designed to protect your deposits in the rare event that your bank fails.

How much can you withdraw from Betterment Cash Reserve?

There are no limits on how often you can withdraw money from a Betterment Cash Reserve account. There is no maximum withdrawal amount either, although there is a daily cap on ACH deposits.

About Author
Rebecca Lake
Rebecca Lake, a valued contributor at MoneyRates, unravels the intricacies of personal finance with her expertise in areas spanning from banking to homebuying and investing to small business strategies. Rebecca seamlessly bridges the gap between complex financial concepts and readers, demystifying them with her clear and insightful narratives. She has contributed to U.S. News and World Report, among numerous other publications. With Rebecca’s guidance, financial clarity is just an article away.