Betterment Everyday Savings Review: Best Online Savings Account?

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Betterment Savings Account Review 2019

Disclaimer
    Investing Simple is affiliated with Betterment.

    Investors have thousands of options when deciding where to put their money. Online savings account to provide a high-interest alternative to the traditional bank account.

    As savvy savers know, every dollar counts. Betterment is a roboadvisor that is providing users with an opportunity to sign up for a new savings account called Betterment Everyday. In this article, we will review Betterment Everyday, a new savings account earning 2.69% APY* per year.

    Betterment Everyday Savings Review

    Summary: Betterment Everyday Online Savings Account

    wdt_IDBetterment Everyday Savings Summary
    1The roboadvisor Betterment has launched an FDIC insured savings account called Betterment Everyday.
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    3Later this year, a checking account will accompany this as well.
    4This savings account has FDIC insurance up to $1,000,000 which is higher than most savings accounts that have insurance up to $250,000.
    5Betterment Everyday Savings will allow you to earn up to 2.69% APY
    6There is no minimum balance, but the minimum to open an account is $10
    7There are zero fees associated with this account
    8You have unlimited monthly transfers, compared to most online bank accounts that have a limit of 6 per month
    9

    What Is Betterment?

    Betterment is an online financial advisor where you can invest, save, and plan for your financial goals. Investors can choose from a variety of portfolios based on your risk and goals. With Betterment, you have a one-stop-shop for your financial life.

    Depending on your plan, you can have access to financial advisors, including CFP® professionals. Investors also have access to tax-loss harvesting tools, advice packages, and Betterment Everyday savings accounts. Check out our full review of Betterment here.

    Betterment Everyday review

    Betterment Everyday Savings Account

    Betterment Everyday Savings is now offering one of the highest interest rates on savings accounts in the banking industry currently at 2.69% APY*. These savings accounts are available now. Checking accounts will be released later in the year, which will come with a debit card.

    Betterment’s Smart Saver platform will be transitioned to Betterment Everyday within 30 days of the launch. All existing Smart Saver users will be automatically switched over to the Betterment Everyday platform.

    Betterment Everyday Savings Account (Available Now)

    • One of the highest rates in the country, 2.69% APY*
    • FDIC-insured up to $1,000,000
    • No minimum balance
    • No fees on balances
    • Unlimited withdrawals (compared to a limit of six withdrawals per month with most savings accounts)

    Betterment Everyday Checking Account (Coming Soon)

    • ATM fees reimbursed worldwide
    • No account or overdraft fees
    • $0 minimum balance
    • FDIC insured up to $250,000
    • Free debit card

    Betterment Everyday Features

    Cash Analysis

    Betterment’s cash analysis feature will determine the minimum amount of cash you require in your bank account to fund your ongoing expenses. By analyzing your expenses, the cash analysis will determine if you have too much or too little cash in your bank account.

    This way, investors are getting the most out of their money and not letting a large amount of cash sitting idle in a low interest-bearing account. Smart investors put cash in higher interest rate accounts where they can earn reasonable interest and not let their savings rot away from inflation.

    Betterment investing app

    Two Way Sweep

    Betterment’s two-way sweep works directly with cash analysis. Any excess cash in your account will be sent to your checking account you link with Betterment. If cash analysis sees that you are running low, it will automatically send cash to your bank account to replenish your funds. You can also manually set minimum amounts for your bank account balance.

    Betterment everyday two way cash sweep. This way all your idle cash earns interest at reasonable rates.

    Zero Fees

    Betterment Everyday savings and checking accounts have no fees for its users. There are also no overdraft fees or minimum account balances. This means investors are genuinely making the most out of every dollar saved.

    Why Use Betterment Everyday Savings?

    Everyone always tells us that holding too much cash in our bank account is not the right decision. But why is this? The main reason being inflation.

    Inflation will slowly decay your savings each year, it has averaged 1.5% to 2.0% annually over the past 30 years.

    This means the purchasing power of our savings is decreasing each year by 1.5% to 2.0%. Our $100 saved today will only buy $98 worth of goods in one year. Over time this can really add up and take a toll on all the hard-earned money we’ve saved.

    Just as compound interest works in our favor, inflation can have a negative compounding effect on our savings. For example, cumulative inflation from 1913 to 2013 was 2,275%. This means prices increased almost 23 times. Yikes…

    Investing is the tool we use to combat inflation. If we can earn a return equal to or greater than the inflation rate, then we have won the battle. Unfortunately, interest rates on bank savings accounts have been extremely low for the past few decades. A bank account interest rate at 0.06% has no shot in beating a 2% inflation rate.

    Betterment Everyday Savings vs. Betterment Smart Saver

    As mentioned earlier, Betterment Everyday will be replacing an older feature called Betterment Smart Saver. There are a few differences between the old Betterment platform called Smart Saver and the new savings platform. The differences include…

    • It comes with an APY of up to 2.69%* compared to the 2.00% offered by Smart Saver
    • It’s FDIC insured up to $1 million compared to Smart Saver which had no FDIC insurance
    • Customers will be able to transfer their money between Betterment Everyday Savings and their linked checking account within 1–2 business days instead of 4–5 business days with Smart Saver

    Traditional Bank Account Alternatives

    Currently, there are few options to obtain a reasonable yield on our cash. Let’s review some of the alternative options to a bank savings account.

    Online Banks

    There are a few online banks that are offering above-average interest rates right now. Many times these accounts will have minimum balance requirements. Ally Bank is an online-only bank that is offering a 2% interest rate on savings account deposits. This is a great offer, and also comes with no account minimums.

    Money Market Accounts

    Over the past few years, short-term interest rates have risen considerably. As a result, certain money market accounts are now yielding between 1.5% to 2.5%. Be cautious, depending on the fund, you may have a minimum deposit to invest.

    CD’s (Certificate of Deposit)

    CD’s have always been an option to park your short-term cash. The one downside is that CD’s often have low liquidity, meaning it can be difficult to sell your investment and receive your cash. Currently, most CD’s are offering a range of interest rates right now ranging from 2% to 3% depending on their maturity. However, investors should be cautious as CD’s can come with early redemption fees for early withdrawals.

    As short-term interest rates continue to rise, investors will continue to have a variety of options to stash their short-term cash savings. With bank savings account interest rates being so low right now, Betterment Everyday savings may be an excellent alternative.

    Disclaimer:

    As of 8/5/2019, Betterment Everyday™ Savings now offers up to 2.44% APY. *The Betterment Everyday Savings (“Savings”) annual percentage yield (“APY”) is based on commitments from program banks if the program was available as of 7/10/2019. APY is a promotional offer for individuals who sign up for the Betterment Everyday Checking waitlist and applies to cash deposited into Savings for the duration of 2019. APY is a variable rate and may change at any time. Current APY can be found here. Accounts do not require a minimum balance. There is a minimum deposit of $10.

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