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Behavioral Finance

Manage Your Cash the Modern Way With Two-Way Sweep

Manage your cash the modern way—effortlessly. Try out Two-Way Sweep, our latest in cash management technology.

Articles by Volodymyr Chernat

By Volodymyr Chernat
Senior Quantitative Researcher, Betterment  |  Published: February 5, 2019

In the past, cash management has been a manual and time consuming process.

Save time by using our newest feature to move cash between accounts as needed.

You could earn a higher yield on your extra cash by moving it into Smart Saver—effortlessly.

Most of us organize our day-to-day financial lives using three different accounts: a checking account, a savings account, and a credit card.

The Headaches of Cash Management

After paying bills and paying down credit card balances each month, you may accumulate extra cash in your checking account. Over time, if you leave this extra cash in your checking account, it will likely lose value to inflation, and you may wish to move that extra cash to an account that earns a higher yield, such as a savings account.

On the other hand, if you find that you end up spending more than your income in a given month, you may need to move cash back from your savings account (or from another type of account) to your checking account.

If you choose to manage your cash manually, not only would you have to take time to move money back and forth, but to get the most out of your hard earned money, you may also end up spending your time comparing banks to find the best yield for your savings account—the average of which is 0.09% per year.

Does all this sound like the perfect job for a computer? It is.

Two-Way Sweep Provides a Solution

The next evolution of cash management for Betterment customers is here. By working alongside our cash analysis recommendations and your Smart Saver account, Two-Way Sweep minimizes the need for tedious manual cash management practices.

Two-Way Sweep automates transfers between your checking account and Smart Saver so that idle cash you might have in your checking account is moved to Smart Saver to help earn a higher yield. Conversely, if we detect insufficient funds in your checking account for your expected future spending needs, Two-Way Sweep will move cash back to your checking account from Smart Saver.

Now you can have a personal cash management tool that helps you earn a high yield on money that may otherwise be sitting in cash, and also aims to keep enough cash in your checking account to cover expected future cash needs.

Ready to Try the Latest Technology?

We have automated cash management by addressing two competing objectives: increasing returns on idle cash while sufficiently funding your checking account to cover expected future cash needs. Get started or log in to access Two-Way Sweep in your Betterment account. We’ve also got all your Two-Way Sweep questions covered in our methodology and our comprehensive overview.

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Explore your first goal

Safety Net

This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.

Retirement

Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.

General Investing

If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.

Smart Saver

You could earn 20X more than a typical savings account with our low-risk investing account for your extra cash.

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