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Betterment Everyday™ Cash Reserve: Supplemental Disclosure

Betterment waives its wrap fee on funds held in Everyday Cash Reserve ("Cash Reserve"). Betterment receives payments from Cash Reserve program banks, which Betterment expects will result in annualized revenue of more than 0% but less than 0.25% of the average, aggregate balance of the daily program deposits at program banks. The interest rate available on clients’ deposit balances is determined by the amount program banks are willing to pay on deposits, minus the payments to Betterment. Betterment will typically seek to set the amount of the payments it receives to minimize potential variations in the rate of interest received by clients. Payments to Betterment from program banks will vary between banks and from day-to-day. Betterment has a conflict of interest in setting the amount of payments it receives from program banks. Betterment could receive increased payments on a particular day without clients receiving an increased rate of interest. Further, clients should be aware that Betterment will typically have a financial incentive to recommend that clients invest in securities rather than hold cash because Betterment charges its annualized wrap fee on account balances in securities while the range of annualized revenue that Betterment expects to receive on balances in Cash Reserve is less than Betterment’s standard wrap fee. Additionally, Betterment Securities and other third-party service providers receive compensation for providing operational and administrative services in connection with Cash Reserve.

This supplemental disclosure is being provided to all clients with a Cash Reserve account as of March 24, 2020, as well as any clients who create new Cash Reserve accounts on or after that date. This disclosure is meant to supplement the description of Cash Reserve in Betterment's ADV and modifies the sub-section titled “Client Fee Considerations.” Additional information about Cash Reserve can be found in Betterment’s ADV.