A SAVINGS ACCOUNT ALTERNATIVE
Many of us hold too much cash in our bank accounts. It’s just sitting there, possibly earning you next-to-nothing. With Smart Saver, you could earn a 2.15% annual yield.*Start with Smart Saver
You deserve to earn more on your savings.
Many banks' savings accounts yield next to nothing.
A low-risk account for investing cash.
We built Smart Saver to keep up with interest rates by investing in short-duration bond funds.
Invested in U.S. government bonds.
We put 80% of your money with U.S. Treasuries and 20% with low-volatility corporate bonds. (If short-term Treasury bills aren’t a stable place for your money, we're not sure what is.)
Learn to keep a smart level of cash in your checking.
Smart Saver's yield is just the start. We've built a cash analysis tool to help you see if you’re holding cash in your checking account that could be earning more.
Why check your balance? Smart Saver has Two-Way Sweep.
Having extra cash is a nice problem to have, but moving that money can be a hassle. We built Two-Way Sweep to make it easy. Help avoid overdrafts and keep your checking account at a desired level. We’ll notify you each time we’re about to sweep your money—just in case you want to cancel and keep your cash where it is. Learn moreStart with Smart Saver
Bank interest is taxed. Smart Saver has tax advantages.
Unlike traditional savings accounts, the investments in Smart Saver generate yield that may be partially exempt from state and local taxes. To keep up with the tax advantages of Smart Saver, you’d likely need a 2.31%** interest rate from a traditional savings account.
How do we make Smart Saver so smart?
Smart Saver Gets Smarter with Cash Analysis
Cash analysis is Betterment’s tool for helping you decide how much extra cash you have to move into Smart Saver.
Understanding Two-Way Sweep: Automating Cash Management
Our automation aims to help make cash management easier, by seamlessly moving your extra cash from your linked checking account to Smart Saver—and back when you need it.
Smart Saver: A Low-Risk Account for Extra Cash
Providing a clearer answer for what to do with extra cash sitting in your checking and savings accounts: Smart Saver.
* 2.15% yield is the asset-weighted blend of the 30 Day SEC Yield as of 5/1/2019 (a standardized calculation that reflects the dividends and interest earned after deduction of the fund’s expenses) of the ETFs that comprise this portfolio net of Betterment’s management fee (0.25% for its Digital plan). The ETFs were chosen with an aim to limit risk and produce income. Yield is an important number in evaluating a low-risk, all-bond portfolio, but is distinct from actual investment returns, which may vary. 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 data available 5/1/2019) compared to 2.15%, the expected yield of a Betterment Smart Saver portfolio. Click here for more information.
** 2.31% yield describes the rate that would result in approximately the same after-tax return as Smart Saver's yield (as of May 1, 2019) if you pay New York state and New York City income taxes. The calculation assumes that you would deposit the same amount in Smart Saver or a savings account, use a single filing status, and have $150,000 in income for the purpose of determining your state and local tax brackets. The calculation uses New York as an example; we also describe other example comparison rates in our full explanation. 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.