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Smart Saver Disclosure

Important information about Smart Saver.
Revised July 1, 2019


References to a 2.00% yield for a Smart Saver account correspond to the asset-weighted blend of the 30-Day SEC Yield as of July 1, 2019 of the ETFs that comprise this portfolio net of Betterment’s 0.25% management fee for its Digital Plan. Clients who are in Betterment’s Premium Plan pay an advisory fee of 0.40%, reducing the net yield by an additional 0.15%. The SEC Yield is based on the dividends and interest paid out by the funds over the past 30 days, after deducting fund expenses. It is the standard measure of the annualized yield an investor could expect to receive from a bond fund, assuming dividends are paid at the same rate over the course of a full year as they were for the most recent 30-day period.

The ETFs for the Smart Saver account were chosen with an aim to limit risk and produce income. Smart Saver's yield is not guaranteed and may fluctuate over time. Yield is an important number in evaluating a low-risk, all-bond portfolio, but is distinct from actual investment returns, which may vary. For more information about how Betterment selected the Smart Saver account funds and their expected risk and return, please see our methodology document.

Betterment’s comparison of 20X the average savings account is calculated by taking the FDIC’s national average savings account interest rate for deposits under $100,000 of 0.10% (as of July 1, 2019) compared to the expected yield of a Betterment Smart Saver portfolio net of Betterment’s advisory fee, as described above. This national average savings account interest rate is calculated as an annual percentage yield (“APY”), which is the rate of interest you can expect to earn in a year, including compounding over the course of the year, assuming you don’t make any further deposits to or withdrawals from the account. It is the standard measure of bank account interest. Visit our methodology on Smart Saver for additional information.

Tax Implications

Smart Saver is a taxable account.

When we refer in Betterment's Interface to a bank interest yield that you'd likely need to "keep up with Smart Saver," we are describing the rate that would result in approximately the same after-tax return as Smart Saver's yield (as of July 1, 2019) if you pay state income taxes. The calculation assumes that you would deposit the same amount in Smart Saver or a savings account. To estimate your state marginal tax bracket, we use the state income tax rate for the address that you reported when you signed up for a Betterment account and the tax filing status and the household income that you provide to us. The calculation does not account for any additional local or municipal tax that you may pay. The calculation uses the same Smart Saver yield assumptions as described above, does not treat Betterment's management fee as tax-deductible, and assumes that you would not pay any fees on a savings account. The calculation uses the 2018 government interest portion of the dividends from the funds in the Smart Saver portfolio, since data for 2019 is not yet available. No state tax benefits for NEAR are included because less than 50% of the assets in that fund are from U.S. government obligations. The equivalent bank interest yield is not intended to be presented to any person who lives in a state without income taxes.

Betterment is not a tax advisor and is not intending to provide tax advice. Your individual circumstances may differ, and you should consult a tax advisor about your specific situation.

Additional Disclosures

Any recommendation to move extra cash to a Smart Saver account does not consider whether paying down debt or saving for another financial goal might be a more appropriate use of that cash.

Unlike for other Betterment investing accounts, you do not have the option to choose an allocation for the money invested in a Smart Saver account. The Smart Saver account is always invested in the 0% stock/100% bonds allocation of the Betterment portfolio strategy.

Smart Saver accounts are not eligible for Betterment’s Tax Loss Harvesting+ feature or for Tax Coordination. Smart Saver accounts also are not eligible to be auto-adjusted, since these accounts have no goal term, and the intended allocation between stocks and bonds in the account will not change over time.

Smart Saver accounts are subject to the same deposit and withdrawal terms, including timing, as all Betterment accounts, as set forth in the Betterment Client Agreement.

Assumptions for Projections

Some clients who have synced external bank accounts to their Betterment accounts may see (either in emails, or in the application) projections for potential extra dollar amount earned over ten years with Smart Saver. These projections are based on the balance of the synced savings account. The hypothetical calculation compares the expected ending balance if the account earned 2.00% (the Smart Saver yield net of Betterment’s advisory fee as described above, as of July 1, 2019), and the expected ending balance if the account earned the published interest rate from that bank indicated below (or the interest rate you provided). This calculation assumes the balance of the synced account remains invested over the 10-year period with no withdrawals or additional deposits, dividends and interest payments are assumed to be reinvested, and assumes the expected yield of the Smart Saver account and assumed bank rate of the synced account (see chart below) remains the same. It is hypothetical in nature, does not represent actual returns attained, and does not take into account any economic or market conditions. Actual results may differ significantly from the value shown.

Assumed Interest Rate of Synced Account

The list below includes the top five savings accounts that are synced to Betterment by customers. The assumed interest rate is the highest APY offered (based on the respective firm’s website as of May 1, 2019) for savings account balances under $100,000 (if available) using the zip code 10010, and does not consider promotional rates, if any. Banks that had interest rates higher than the expected yield of a Smart Saver were excluded from the top five and other banks were not considered. Betterment is not responsible for the accuracy of the interest rates or data sourced from third party bank websites. The actual interest rate for your Synced Account may be different and could be significantly higher or lower. If you changed the name of your Synced Account on the Betterment website, it may not match the firm name below.

Bank name
Assumed interest rate

Chase Bank

Assumed interest rate


Wells Fargo

Assumed interest rate


Bank of America

Assumed interest rate


Capital One 360

Assumed interest rate



Assumed interest rate