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Betterment Everyday™ Cash Reserve FAQ

We want to help you make the most of your everyday money. Learn about Betterment Everyday™ Cash Reserve.

Articles by Betterment Editors

By the Editorial Staff
Betterment Resource Center
Published: July 23, 2019 | Updated: January 22, 2020


TABLE OF CONTENTS


What is Betterment Everyday™?

Betterment Everyday™ provides you with a cash management solution that helps you spend and save confidently.

Betterment Everyday™ Cash Reserve: A High-Yield Cash Account

  • A high-yield cash account
  • Earn a variable rate of APY*
  • FDIC insurance covering up to $1,000,000 at our program banks
  • Access your cash in 1-2 business days
  • No limits on withdrawals
  • No minimum balance
  • No fees on your balance

Betterment Everyday™ Checking

  • ATM fees are reimbursed worldwide‡
  • No minimum balance
  • No overdraft fees
  • No maintenance fees
  • FDIC insurance on up to $250,000

Cash Reserve is provided by Betterment LLC, which is not a bank, and cash transfers to program banks are facilitated by Betterment Securities. Checking will be provided by Betterment Financial LLC, in partnership with nbkc bank.

What is Betterment Everyday™ Cash Reserve?

Betterment Everyday™ Cash Reserve is our newest way to help you save. As part of our cash management suite, Cash Reserve is a high-yield cash account that is available now, and you can use it alone or alongside other investment goals you already have with Betterment.

Benefits:

  • Earn a variable rate of APY*
  • FDIC insurance covering up to $1,000,000† at our program banks
  • Access your cash in 1-2 business days
  • No limits on withdrawals
  • No minimum balance
  • No fees on your balance

How can I sign up?

Ready to save? If you don’t have an account with Betterment at all yet, click here to sign up. It only takes a few minutes!

If you already have a Betterment investing account, click here.

Are there any fees?

Betterment Everyday™ Cash Reserve has no fees on your balance. 

Are there any minimum balance requirements?

There are no minimum balance requirements to use Betterment Everyday™. This means that the minimum balance is $0. You can have as little or as much cash in Betterment Everyday™ as you want—we won’t judge.

One thing to note is that the smallest deposit amount you can make into Betterment Everyday™ Cash Reserve is $10. This is due to ACH transaction limitations.

Is Betterment a bank?

Neither Betterment nor its affiliates are banks.

Cash Reserve is offered by Betterment LLC, an SEC-registered investment adviser, and cash transfers to program banks are facilitated by Betterment Securities.

Checking accounts and the Betterment Visa Debit Card (Betterment Everyday tm Checking) are provided by and issued by nbkc bank, Overland Park, Kansas, Member FDIC in partnership with Betterment Financial LLC.

What is the interest rate on my cash?

Your annual percentage yield, or APY, is variable and can change. As of , the APY we are offering for Cash Reserve is *. Interest will be paid into your account by the first business day of each month, unless that day is a bank holiday, then it will be paid by the following business day.

Cash Reserve is provided by Betterment LLC, which is not a bank, and cash transfers to program banks are facilitated by Betterment Securities. 

Why does the interest rate fluctuate?

The program banks that participate in Betterment Everyday™ Cash Reserve all pay interest rates that are tied to the federal funds rate, which is the rate at which banks can loan money to each other, and it’s set by the Federal Reserve

The federal funds rate aims for a target range, rather than aiming for a specific number. Because of this, the federal funds rate can change by a small amount from day to day. That means that your interest can also vary by a small amount every day—think 0.01% to 0.03%—as we experience those changes. You’ll notice this change after you log in to your account and see your current rate from day to day. 

However, the Federal Reserve also can change the target federal funds rate (usually in 0.25% increments). If and when this happens, your interest rate will vary by more than the typical daily variation. If the federal funds rate goes up, your rate will go up, too. If it goes down, your rate will track that change as well.

Note that the rate we market on our websites and in our advertisements is updated at least once a  month, rather than every day. When you log in to your account, you will see the current rate as of that day. 

Is Betterment Everyday™ Cash Reserve covered by FDIC insurance?

Yes. Any cash in Betterment Everyday™ Cash Reserve is covered up to $1,000,000† in FDIC insurance once deposited into our program banks. Read more about special considerations here.

Can I opt out of holding my cash in a specific bank?

Yes, you may opt out of holding cash at a specific bank. To opt out of a specific bank, please email us.

If you already have cash at one of our program banks, you can still choose to opt out of that specific bank. Regardless of the number of program banks participating, the total amount of FDIC insurance available to you through Betterment Everyday™ Cash Reserve will be lower by $250,000 for each bank you opt out from.

If you have non-Betterment funds deposited at a program bank already and elect not to opt out, all funds that you hold in that specific program bank (in the “individual” account ownership category) will be totaled for purposes of determining FDIC insurance. This means that some of your funds at that specific program bank may be left uninsured, if the total amount deposited at that bank between individually owned accounts you open separately and your Betterment Everyday™ Cash Reserve exceeds $250,000.

Any cash in Betterment Everyday Cash Reserve is FDIC insured up to $1,000,000† once deposited into our program banks. If you have not opted out of any of our program banks and you have less than $1,000,000 invested in Cash Reserve, we will not allow your balance to exceed $250,000 in any one program bank. This ensures that you are eligible for the maximum possible amount of FDIC insurance at each program bank.

Will I receive any tax forms due to my earned interest?

Yes, we will provide you with a 1099-INT tax form by January 31st of each year if you earned $10 or more in interest during the previous calendar year. You’ll be able to download it directly within your account, and we’ll email you to let you know when it’s available.

Can I open a joint account?

Joint Cash Reserve accounts are available.

If you don’t have an account with Betterment yet, click here to sign up. If you already have a Betterment account, click here.

The sign up flow will prompt you to determine whether you will be the only person using Cash Reserve, or whether you would like a joint account.

Please note that Cash Analysis and Two-Way Sweep are currently only available on individual Cash Reserve accounts.

Is a joint Cash Reserve account covered by FDIC insurance?

Yes. A joint Cash Reserve account offers up to $2,000,000† in FDIC insurance once funds are deposited into our program banks.

This is separate from any cash held in an individual Cash Reserve account, which is covered up to $1,000,000 in FDIC insurance once deposited into our program banks. Read more about special considerations here.

Can I opt out of holding my cash in a specific bank with a joint cash reserve account?

Yes, you may opt out of holding cash at a specific bank. To opt out of a specific bank, please email us, and specify whether you are opting out in an individual Cash Reserve account, joint Cash Reserve account, or both.

If you already have cash at one of our program banks, you can still choose to opt out of that specific bank. Regardless of the number of program banks participating, the total amount of FDIC insurance available to you through a Betterment Everyday™ joint Cash Reserve account will be lower by $500,000 for each bank you opt out from.

If you have non-Betterment funds deposited at a program bank already and elect not to opt out, all funds that you hold in that specific program bank will be totaled for purposes of determining FDIC insurance. This means that some of your funds at that specific program bank may be left uninsured, if the total amount deposited at that bank exceeds $500,000 in the same ownership type.

Any cash in a Betterment Everyday joint Cash Reserve account is FDIC insured up to $2,000,000† once deposited into our program banks. If you have not opted out of any of our program banks and you have less than $2,000,000 invested in Cash Reserve, we will not allow your balance to exceed $500,000 in any one program bank. This ensures that you are eligible for the maximum possible amount of FDIC insurance at each program bank.

Who can I open a joint account with?

A joint Cash Reserve account can be created with any other Betterment customer, as permitted under your state’s laws. If you want to create a joint Cash Reserve account with someone who is not a Betterment customer, they must first open an individual Betterment account (but there is no obligation that the individual account be funded if they only wish to use the joint Cash Reserve account).

How is it different than just having a beneficiary?

Two customers with a joint Cash Reserve account have equal ownership of the assets in the account. Each owner can transfer, deposit, and withdraw money. Upon the death of one of the joint Cash Reserve account owners, the entire interest in the account is transferred to the surviving account owner.

On the other hand, a beneficiary does not have access, control, or ownership over the account while the account owner is alive. Upon the death of both of the joint account holders, the assets are transferred to the beneficiary.

Please note that after the death of one of the joint Cash Reserve account owners, FDIC insurance will decrease after a six month grace period to the amount covered by an individual Cash Reserve account, up to $1,000,000† once deposited into our program banks.

Click here for instructions on how to add beneficiaries.

Who will be the primary account holder?

The account holder who opened the joint account is designated as the primary account holder. To see who the primary account holder is, log in and navigate to Settings > Accounts.

We aren’t able to transfer primary ownership of a joint account once it’s been created. However, remember that a joint account is legally owned by both parties associated with the account. The IRS requires only the primary account holder be listed on tax statements.

The primary account holder, which is the person who originally created the account, will receive the 1099-INT form associated with the joint account. Integrations with tax preparation software will only work with the primary account holder’s Betterment account.

Since Betterment is not a tax advisor, we highly recommend consulting with a tax professional for further questions regarding how to file your taxes in a joint Cash Reserve account.

Do both joint account owners need to approve actions in the account?

Most actions do not require consent from both account owners. These include closing the account, deposits, withdrawals, most types of transfers, changes to the linked checking account, and beneficiary changes.

Is there a limit to how much I can deposit into my joint Cash Reserve account?

There is no limit to how much you can deposit in a joint Cash Reserve account.

Can we link more than one checking account?

You can only link one checking account to your joint account at a time. The ability to link multiple bank accounts may be something we offer in the future.

Can I transfer between my individual Cash Reserve and joint Cash Reserve accounts?

You will not be able to transfer money between an individual Cash Reserve account and a joint Cash Reserve account at this time. If you would like to move funds between these accounts, you will need to withdraw the funds from the individual account, place them in your linked checking account, and then deposit those funds into the joint Cash Reserve account.

We’ll be sure to monitor customer requests for this, as we may plan to offer this feature in the future.

Can I transfer between my joint Cash Reserve account and investing goals?

At this time, you can only transfer money between a joint Cash Reserve account and joint investing goals. You will not be able to transfer money from a joint Cash Reserve account to any individual investing goals.

If you would like to move funds between these accounts, you will need to withdraw the funds from the joint Cash Reserve account, place them in your linked checking account, and then deposit those funds into the individual Cash Reserve account.

We’ll be sure to monitor customer requests for this, as we may plan to offer this feature in the future.

How can I close my joint account?

Either joint account holder can close the joint account.

Log in and navigate to Settings > Accounts. Click the three dots towards the right of the account you are looking to close, and select “Close Account”. There are no trading fees or penalties for closing accounts.

Who is eligible to use Cash Reserve?

You must reside in the U.S. full-time to use Betterment’s services. You must also be 18 years old, as we are not able to provide services to minors.

Am I required to use both Checking and Cash Reserve?

No. We know that everyone’s needs are different, and we want to provide you with the flexibility to make your own decision on which of our cash management and investing products serve you best.

Will you run a credit check?

No. Credit checks are not required in order to use Betterment Everyday™.

However, we will collect your personal information upon signup. We are mandated to collect your personal information by our regulators and the IRS, so there is no way around this requirement.

Can I open an account for a company or LLC?

Company and LLC accounts are not available through Betterment Everyday™ at the present time. We’ll be sure to monitor customer requests for company and LLC accounts, as we may be able to offer them in the future.

Can I open an account for my trust?

Accounts for trusts are not available through Betterment Everyday™ at the present time. We’ll be sure to monitor customer requests for accounts for trusts, as it’s something we may be able to offer in the future.

Is there a limit to withdrawals?

Unlike transfers from a savings account at a typical bank, Betterment Everyday™ Cash Reserve has no transfer limits on how many times you can move money from your account.

How long do deposits take?

Deposits into Betterment Everyday™ Cash Reserve from your linked checking account generally take 1 to 2 business days to complete, depending on when you put in your request.

  • If the deposit request is placed before 10 PM ET, it will generally appear in Cash Reserve in 1 business day.
  • If the deposit request is placed after 10 PM ET, it will generally appear in Cash Reserve in 2 business days.

Transactions can be subject to processing delays in certain circumstances.

Note that bank holidays do not count as business days. You can see a list of bank holidays here.

The smallest deposit amount you can make is $10. The largest deposit you can make per day via ACH is $300,000.

How long do withdrawals take?

Unlike withdrawals from a savings account at a typical bank, Betterment Everyday™ Cash Reserve has no withdrawal limits on how many times you can move money from your account.

When you withdraw from Cash Reserve, the cash will be transferred to your linked checking account generally within 1 to 2 business days, depending on when you put in your request.

  • If the withdrawal request is placed before 1 PM ET, it will generally appear in your checking account in 1 business day.
  • If the withdrawal request is placed after 1 PM ET, it will generally appear in your checking account in 2 business days.

Transactions can be subject to processing delays in certain circumstances.

While 1-2 business days is generally the expected withdrawal timeline from Betterment Everyday™ Cash Reserve, withdrawing funds soon after a deposit can trigger a temporary hold on your withdrawal. This hold should last no longer than 4 business days. If further action is required on your part, we will let you know.

Note that bank holidays do not count as business days. You can see a list of bank holidays here.

Can I transfer money to and from my investing goals?

Yes, you can transfer between Cash Reserve and any individual taxable investment goal. If you transfer from Betterment Everyday™ Cash Reserve to one of your individual taxable investment goals with Betterment, the process generally takes up to 2 business days.

In the reverse situation, if you transfer from one of your individual taxable investment goals to Betterment Everyday™ Cash Reserve, it generally takes up to 2 business days. Transactions can be subject to processing delays in certain circumstances.

Note that bank holidays do not count as business days. You can see a list of bank holidays here.

What is the account number and routing number?

Betterment Everyday™ Cash Reserve is not like a savings account that you can obtain at a traditional bank and will not have its own routing and account number. You won’t be able to wire funds in or transfer funds in directly from another unlinked bank account. Additionally, we are not offering direct deposits between your paycheck and Betterment Everyday™ Cash Reserve at this time.

You’ll have to link a bank account within your Betterment account in order to initiate a transfer into Cash Reserve.

If you need your Cash Reserve account number, it’s the same as your “Personal Account number,” which you can find here—just note that you will not be able to use this number to conduct any transfers.

Can I access Cash Reserve with a debit card?

We’ll provide a Betterment Visa Debit Card to you if you open Betterment Everyday™ Checking when it becomes available later this year. Be sure to join the waitlist to secure your spot and receive updates.

The debit card will allow you to access funds in Checking. You will not be able to access your Cash Reserve with the debit card.

Cash Reserve is provided by Betterment LLC, which is not a bank, and cash transfers to program banks are facilitated by Betterment Securities. Checking will be provided by Betterment Financial LLC, in partnership with nbkc bank. 

Can I use Two-Way Sweep?

You’ll be able to deposit into Betterment Everyday Cash Reserve by making a one-time deposit, by setting up auto-deposits, or by using Two-Way Sweep. Two-Way Sweep is a way to effortlessly manage your cash by moving it to and from your checking account and Betterment Everyday Cash Reserve when you need it.

What happened to Smart Saver?

Smart Saver was a low-risk investment account that was designed to earn a higher yield than a typical savings account through the use of short-term treasury bonds. We’ve replaced this offering with Betterment Everyday™ Cash Reserve.

If you had “free time” on your Smart Saver account, that free time won’t correspond to Betterment Everyday™ Cash Reserve. We know that it might not seem ideal to you to lose the free time, but our hope is that our new cash management tools will fit your needs by helping you spend and save with confidence.

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Betterment Everyday Cash Reserve

*The annual percentage yield (“APY”) on the deposit balances in Betterment Everyday Cash Reserve (“Cash Reserve”) is and represents the weighted average of the APY on deposit balances at the banks participating in Cash Reserve (the “Program Banks”) and is current as of . This APY is variable and subject to change daily. See Current APY. Deposit balances are not allocated equally among the participating Program Banks. A minimum deposit of $10 is required, but there is no minimum balance required to be maintained. The APY available to a customer may be lower if that customer designates a bank or banks as ineligible to receive deposits. APY applies only to Cash Reserve and does not apply to checking accounts held through Betterment Everyday Checking. Cash Reserve and Betterment Everyday Checking are separate offerings and are not linked accounts.

See Betterment’s Form ADV Part II and Terms and Conditions for additional information, including details of the deposit allocation methodology.

†Betterment Everyday Cash Reserve (“Cash Reserve”) is offered by Betterment LLC. Clients of Betterment LLC may participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients’ funds are deposited into one or more banks (“Program Banks“) where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.

Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity — e.g., individual or joint — at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC’s Form ADV Part II.

Betterment Everyday Checking

‡  Checking accounts and the Betterment Visa Debit Card provided by and issued by nbkc bank, Overland Park, Kansas, Member FDIC. Funds deposited into Checking will be eligible for up to $250,000 of FDIC insurance. Betterment Everyday Checking made available through Betterment Financial LLC. Neither Betterment Financial LLC, nor any of their affiliates, is a bank. Betterment Financial LLC does not charge foreign transaction fees for the use of the Betterment Visa Debit Card outside of the United States. However, Visa charges a foreign transaction fee of 1%. Betterment Financial LLC does not reimburse this 1% transaction fee on foreign ATM transactions or on any other foreign transactions or purchases. Checking accounts do not earn APY (annual percentage yield). Betterment Everyday Cash Reserve and Betterment Everyday Checking are separate offerings and are not linked accounts.

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