Cash Reserve
Betterment Cash Reserve Overview
Cash Reserve is a no-fee, 100% cash account designed to protect your money from market volatility. Given its relatively low returns compared to potential market gains, we generally recommend this account for funds you intend to spend within the next year. Key features of Cash Reserve include a 4.00% annual percentage yield (APY variable), FDIC insurance up to $2 million at our Program Banks ($4 million for joint accounts), subject to certain conditions, and fast access to your money. Betterment is not a bank.
FDIC Insurance and Deposit Structure
Funds deposited into Cash Reserve become eligible for FDIC insurance once they are transferred to one or more Program Banks, with up to $250,000 of coverage per depositor per bank for each insurable capacity (e.g., individual or joint accounts) at up to eight Program Banks. If a client chooses to exclude certain Program Banks from receiving deposits, their total FDIC insurance coverage may be reduced. Cash Reserve provides Betterment clients an opportunity to earn interest on cash intended for future securities purchases through Betterment LLC and Betterment Securities. However, it should not be considered a long-term investment option.
How Cash Reserve Works
Cash Reserve is offered through Betterment LLC and managed via brokerage accounts at Betterment Securities. While Betterment LLC is not a bank, client funds in Cash Reserve are deposited into one or more FDIC-insured Program Banks, where they earn variable interest and qualify for FDIC insurance, subject to certain conditions. This account is designed to provide clients with a secure, interest-earning option for cash that may later be used to invest through Betterment. However, it is not intended for long-term investing.
SIPC and FDIC Protection
Funds held in brokerage accounts are protected by SIPC (Securities Investor Protection Corporation), while funds deposited into Program Banks are FDIC-insured up to $250,000 per depositor per bank, with a maximum aggregate coverage of $2 million ($4 million for joint accounts) once deposited into multiple Program Banks. Funds in transit to or from Program Banks are generally not FDIC-insured but remain covered by SIPC. FDIC insurance limits apply to all accounts a client holds at a bank, not just their Cash Reserve funds. Certain trust and corporate accounts may be eligible for additional FDIC insurance. Clients are responsible for monitoring their deposits across multiple banks to avoid exceeding FDIC insurance limits.
For more details, refer to Betterment’s Cash Reserve Terms & Conditions and Form ADV Part 2. Additional information on FDIC insurance can be found at FDIC.gov.
| Holdings | Program Banks in Cash Reserve |
|---|---|
| Truist Bank1 | |
| State Street Bank and Trust Company1 | |
| HSBC Bank USA, N.A.1 | |
| Webster Bank, N.A.1 | |
| Barclays Bank Delaware1 | |
| First Merchant Bank1 | |
| Bell Bank (Fargo, North Dakota) * pending removal on 7/8/2025 | |
| The Bancorp Bank2 | |
| Cross River Bank | |
| First Internet Bank of Indiana 1 | |
| Wells Fargo Bank, N.A.1 | |
| CIBC Bank USA1 | |
| NexBank1 | |
| Morgan Stanley Bank, N.A.1 | |
| Morgan Stanley Private Bank, National Association1 | |
| Bank Hapoalim, B.M.1 | |
| Northbrook Bank and Trust Company, N.A.1 | |
| Lake Forest Bank & Trust Company, N.A.1 | |
| Encore Bank 1 | |
| State Bank of the Lakes, N.A. 1 | |
| Wheaton Bank and Trust, N.A. 1 | |
| Forbright Bank 1 | |
| First Western Trust Bank1 |
Be invested.
