Betterment HYSA Review 2024: Can A Robo-Advisor Keep My Money Safe?

Betterment HYSA details

Annual percentage yield (APY)	Up to 4.25% (as of Dec. 2, 2024)
Minimum deposit requirement	$10
Monthly maintenance fees	$04 <p class="">For Cash Reserve, Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.<br></p>
ATM access	No
FDIC-insured	Yes, you get up to $2 million for single account holders and $4 million for joint account holders through partner banks.

What is the Betterment Cash Reserve?

The more I learn about saving and investing, the more it makes sense to save for short-, medium-, and long-term goals. While there are different schools of thought, it helps me to see the exact amounts I’ve saved towards each goal, and I can choose where to direct funds from each paycheck.

If there’s an unexpected expense that my emergency fund can’t handle, I can take money from my vacation fund to help cover it and then work on replenishing the funds later.

That’s one reason the Cash Reserve account from Betterment can be helpful, primarily if you already use Betterment to invest.

It allows you to transfer money into Betterment, but instead of investing it right away, you can keep your money ‘on deck’ to invest when the time is right while still earning a higher APY than you’ll find with some other accounts.

The Betterment Cash Reserve allows you to break your short-term goals into specific savings buckets and intentionally direct your funds there, potentially helping you reach those goals faster. The platform’s automated features can offer advice, and you can also set up recurring deposits from an external account to help you stay on track.

However, the Cash Reserve account is not a traditional savings account. Instead, it's a cash management account that works within the Betterment investment platform and offers features similar to those of a high-yield savings account. And you must be a Betterment customer to use its Cash Reserve product.

It provides a 4.25% (as of Dec. 2, 2024) APY, is FDIC-insured, and only requires an opening deposit of $10, making it an attractive spot to park some extra cash. It also doesn’t charge monthly maintenance fees or require a minimum monthly balance to earn the highest APY.

Unlike many traditional savings accounts, Betterment doesn’t limit the number of withdrawals you can make each month. This is helpful when you have unexpected expenses to cover.

Who is the Betterment HYSA best for?

The Betterment HYSA through Cash Reserve is best if you already use Betterment as your investing platform and have an established high-yield savings account for your emergency fund.

Although it offers many benefits similar to a competitive savings account, it's important to remember that Betterment’s primary focus is investing. The money you keep in the Cash Reserve is meant for use within a few months or for eventually investing in stocks, bonds, and other securities – not for money you want to keep readily available.

It's best to consider the Cash Reserve account as a bridge between your primary savings or checking account and your Betterment investment accounts. You can deposit extra cash into your Cash Reserve and hold it there until you decide where to invest it.

If you plan to use the cash within a year, keeping your funds out of the market and in the Cash Reserve is likely best. But if you plan to keep money in your Cash Reserve account longer, investing it may be more beneficial since you can likely earn higher returns over the same period and have some time to recover from any downturns.

Account benefits

The Betterment Cash Reserve account can be helpful if you already use Betterment as an investing platform. Some of its benefits include:

High APY

This account currently offers a 4.25% (as of Dec. 2, 2024) APY on all balances. However, new Betterment customers may also qualify for an APY boost of 0.50% per month for the first three months after funding an account. After the first three months, the account will earn the current available APY.

Comparatively, the national average for savings accounts is currently 0.43% (as of 11/18/24), and some traditional banks offer only a 0.01% APY. Marcus by Goldman Sachs currently offers a 4.10% (as of 11/18/24) APY with its high-yield savings account, and SoFi® offers up to 4.00% APY ⁵ <p>SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a></p> if you meet specific deposit requirements.

Betterment’s robo-advisor competitor Wealthfront provides a comparable cash account with similar features and a 5.00% APY.

No fees or minimums

Betterment's high-yield cash account doesn’t charge monthly maintenance fees, and much like its investment side, it doesn’t require a minimum balance. While you need $10 to open an account, you aren’t required to maintain a specific dollar amount afterward.

FDIC Insurance

Since Betterment isn’t a bank, it doesn’t hold the funds in Cash Reserve accounts. Instead, the money is distributed across as many as eight separate program banks.

Each bank is FDIC-insured for up to $250,000 per depositor, per bank. The combined total of funds covered by FDIC insurance through the Betterment program banks is up to $2 million per single account holder and up to $4 million for joint accounts.

However, you can’t choose which program banks hold your money or how much each bank holds. While you can opt out of keeping your cash at one of the specific banks, you’ll lower the amount of FDIC insurance you qualify for.

Convenience

Keeping your funds in the Cash Reserve account can help you grow your savings and avoid impulse spending. While you can access your money by transferring it to an external account or the Betterment Checking account, neither option is instant, so you have a little time to think before spending.

If you want to invest, you are already on the Betterment platform and can choose various investment options, including stocks, bonds, and ETFs. However, remember that any money you move out of the Cash Reserve account and into investments isn’t covered by FDIC insurance, and all investments carry a degree of risk.

Why you might want a different account

Despite its benefits, the Betterment Cash Reserve account isn’t suitable for everyone. Some of its drawbacks include:

No cash or check deposits

The Cash Reserve account (and the rest of the Betterment platform) doesn’t accept cash or personal check deposits. You must link an external bank account to the Betterment platform for ACH payments or set up a wire transfer to complete a deposit. However, you can’t use a wire transfer to make a withdrawal.

Transfers from the Cash Reserve account to an external checking account can take up to two business days. Betterment allows you to link up to three external checking or savings accounts, and moving funds into the Cash Reserve account can take between one and three days or possibly longer if there are processing delays.

No ATM or debit card

The Cash Reserve account doesn't include a debit card or ATM access. If you want to spend cash you have on the Betterment platform, you’ll need to open a Betterment Checking account, which offers a debit card, Apple Pay, Google Pay, and even paper checks. (Note that you’ll only be able to access your checking balance with these methods and not your Cash Reserve.)

Checking also includes access to ATMs and cash-back rewards on brands like Costco and Adidas, and Betterment will reimburse ATM and foreign transaction fees.

Meant for short-term goals

If you’re working on building up your savings account over time, the Betterment Cash Reserve account may not be the best place to park your savings. But if you already have three to six months of your monthly expenses saved in a high-yield savings account, using the Cash Reserve for any extra funds can be a good idea.

While it can help you save for goals you want to meet within the next 12 months, the account isn’t designed for goals longer than that. If you’re saving for a downpayment on a house or have another big goal with a long time horizon, using the investing side of Betterment might get you a better return, though you should consider the risk.

Lack of in-person customer service options

Betterment is a robo-advisor, which means it doesn’t have physical branches. While it does have a customer service line, the hours are limited to Monday through Friday, 9 AM to 8 PM Eastern time. However, Betterment does offer a 24/7 virtual chat feature.

You can also ask a financial advisor questions about your portfolio, including your Cash Reserve account, for a fee and if you meet the minimum account balance requirements.

Alternatives to Betterment HYSA

If the Cash Reserve account doesn’t sound quite right for you, don’t worry. Some alternatives can help you earn a higher APY than a traditional savings account and still provide a safe place for extra cash.

Wealthfront Cash account

Wealthfront Cash is similar to the Betterment Cash Reserve account. It offers a 5.00% APY, has no account fees, and only requires $1 to start saving. However, unlike the Betterment account, Wealthfront’s Cash account is automatically connected to a debit card and allows you to pay bills and send or deposit checks directly from the account.⁶ <p>Rate is current as of November 3, 2023.</p> ⁷ <p>Wealthfront Cash account is offered by Wealthfront Brokerage LLC, Member of FINRA/SIPC. Wealthfront Brokerage is not a bank. We convey funds to partner banks who accept and maintain deposits, provide the interest rate, and provide FDIC insurance. Rate is subject to change.</p>

When you’re ready to invest the money in your Wealthfront Cash account, you can move it to the investing side in a few minutes. Wealthfront also allows free wire transfers to other institutions, although the receiving bank might still charge you a fee.

Like Betterment, Wealthfront is a robo-advisor, so it focuses on investments, not banking. However, it offers more flexibility and direct access to your funds than the Betterment Cash Reserve account. It also has higher levels of FDIC coverage through partner banks: $8 million for individual accounts and $16 million for joint accounts.

Visit Wealthfront | Read our full Wealthfront Cash account review

SoFi®

SoFi is a personal finance company that offers checking and high-yield savings accounts and other banking products, including credit cards, loans, and investments. It offers up to 4.00% APY with its high-yield savings account if you have qualifying deposits, and it doesn’t charge monthly maintenance or overdraft fees. SoFi’s checking account earns a 0.50% (as of 12/3/24) APY, which is rare among checking accounts.⁸ <p>The following describes the terms that apply to participation in the SoFi Checking and Savings direct deposit promotion (the “Direct Deposit Promotion”) offered by SoFi Bank, N.A, Member FDIC (“SoFi”).</p> <p>Eligible Participants: All new and existing members without any history of direct deposit transactions into their SoFi Checking and Savings account are eligible for the Direct Deposit Promotion. Members who previously enrolled in direct deposit into either SoFi Money or SoFi Checking and Savings, whether currently still enrolled or not, do not qualify for this Direct Deposit Promotion. Bonuses are limited to one per SoFi Checking and Savings account. In the case of a joint account, only the primary account holder (the member who signed up first) is eligible for a bonus.</p> <p>Promotion Period: The Direct Deposit Promotion will begin on 12/7/2023 at 12:01AM ET and end on 12/31/24 at 11:59PM ET.</p> <p>Bonus Terms: In order to qualify for eligibility for a bonus, SoFi must receive at least one Direct Deposit (as defined below) from an Eligible Participant before the end of the Promotion Period. Direct Deposits are defined as deposits of $1,000.00 or greater from an enrolled member’s employer, payroll, benefits provider, or government agency via ACH deposit. Deposits that are not from an employer, payroll, benefits provider, or government agency (such as check deposits; P2P transfers such as from PayPal or Venmo, etc.; merchant transactions such as from PayPal, Stripe, Square, etc.; and external bank ACH transfers not from employers) do not qualify for this Direct Deposit Promotion. The amount of the bonus, if any, will be calculated during the Direct Deposit Bonus Period as described and defined below.</p> <p>Direct Deposit Bonus Period: The Direct Deposit Bonus Period begins when SoFi receives a Direct Deposit within the Promotion Period and ends 25 calendar days later (the “Direct Deposit Bonus Period”). For the avoidance of doubt, the Direct Deposit Bonus Period shall not extend beyond the Promotion Period. The bonus amount will vary based on the total amount of Direct Deposits received during the Direct Deposit Bonus Period. Once the Direct Deposit Bonus Period has elapsed, SoFi will determine if you have met the offer requirements and will deposit any earned bonus into your checking account within seven (7) business days. For example, if SoFi receives between $1,000.00 and $4,999.99 in Direct Deposits during the Direct Deposit Bonus Period, you will receive a one-time cash bonus of $50. A member may only qualify for one bonus tier and will not be eligible for future bonus payments if Direct Deposits subsequently increase after the Direct Deposit Bonus Period.</p> <p>Total Direct Deposit Amount in Direct Deposit Bonus Period<br> Cash Bonus Tier<br> $1,000.00 - $4,999.99<br> $50<br> $5,000.00 or more<br> $300</p><br> <p>Bonus Payment Timeline: SoFi will credit members who meet qualification criteria within seven (7) business days of the end of the Direct Deposit Bonus Period.</p> <p>Bonuses are considered miscellaneous income and may be reportable to the IRS on Form 1099-MISC (or Form 1042-S, if applicable). SoFi reserves the right to exclude any Members from participating in the Direct Deposit Promotion for any reason, including suspected fraud, misuse, or if suspicious activities are observed. SoFi also reserves the right to stop or change the Direct Deposit Promotion at any time.</p> <p>SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a></p> ⁹ <p>New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) <b>OR</b> $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.</p> <p>SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a></p> ⁵ <p>SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a></p> ¹⁰ <p>We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a></p>

SoFi offers up to $2 million in FDIC insurance through partner banks. It also has a roundup feature that allows you to round up purchases to the nearest whole dollar amount and save the difference. SoFi is a Member, FDIC ¹¹ <p><b>SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a></b></p> .

Although you’ll give up some APY by using SoFi, your money is more easily accessible than with Betterment.

Visit SoFi | Read our full SoFi review

FAQ

Bottom line

If you’re a current investor on the Betterment platform and want a place to safely store cash and get an above-average APY, the robo-advisor’s Cash Reserve account might be a good fit. However, you probably shouldn’t use it as your only savings account or as a place to store money for long-term goals. Plus, you should keep the limited transaction options in mind.

Before signing up for any high-yield savings account, thoroughly research your options and read the account disclosures and fee schedules to ensure you know what you’re getting into. Pay attention to any special requirements you may need to meet to get the highest APY offered. Finally, plan to regularly monitor your account to ensure you’re making progress toward goals.