Investing Simple Logo
Menu
Webull free stock promotion
Get 2 FREE Stocks Valued up to $3,300!
Account Opening: 1 Free Stock Worth $3 - $300, Account Funding: 1 Free Stock Worth $7 - $3,000 (offer ends 2/10/2022)
Written by Cari Scribner on January 12, 2022
Category: 
FTC Disclosure

Is Betterment A Safe And Legitimate Robo-Advisor In 2022?

Betterment is a robo-investing platform that launched in 2008.

Through the use of computer algorithms, investors have their money fully managed for a fraction of the cost of a traditional financial advisor.

Since this is a newer investment offering compared to some platforms that have been around for many decades, you might be wondering if Betterment is a safe investment platform.

In this article, we will be covering the SIPC insurance which covers your investments within Betterment.

We will also look at the banking offerings from Betterment, which instead have coverage through FDIC insurance.

In addition, we will look at the security features of the Betterment app itself. 

Best Free Stock Promotions

BrokeragePromotionLink
Robinhood Logo1 Free Stock (Up To $225)Download
Webull Logo2 Free Stocks (Up To $1,850)Download
Firstrade trading platform2 Free Stocks (Up To $400)Download
M1 Finance Robo AdvisorGet $30 When You Deposit $1,000Download
Acorns LogoFree $10 BonusDownload
SoFi Robo Advisor1 Free Stock Up To $1,000Download

Is Betterment SIPC Insured?

Yes! Betterment is a member of the Securities Investor Protection Corporation.

This provides you with coverage of up to $500,000 in the event that your broker loses your financial assets. Since Betterment is a member, you have coverage for your assets.

There is also up to $250,000 of coverage for the cash held within your account for the purpose of investing.

However, keep in mind that this does not protect you from financial losses experienced as a result of investing in the financial markets.

Robo-Advisors Free Training

We put together a free 30 minute video training that walks you through the entire process, step by step. This training will help you get up and running in no time at all.

GET THE GUIDE

Is Betterment FDIC Insured?

It is important to understand that the FDIC only covers deposits at bank accounts. As a result, it only applies to the Betterment savings and checking accounts.

Betterment itself is not actually a bank. Instead, they partner with existing FDIC insured banks to offer banking services within the app.

In the case of their checking account, their partner is NBKC Bank which is FDIC insured. This gives you up to $250,000 of coverage for the cash held within your Betterment checking account.

For the savings account referred to as Betterment Cash Reserve, they partner with multiple banks. This actually allows them to offer higher levels of FDIC insurance, since they are able to spread deposits out across multiple banks.

Individual savings accounts have coverage for up to $1,000,000.

Joint savings accounts have coverage for up to $2,000,000.

Is The Betterment App Safe?

Lastly, it is important to consider whether or not your personal information is safe with Betterment.

Here's the steps Betterment takes to safeguard client information:

  1. All personal data is encrypted (scrambled) and stored on servers in a secure facility
  2. Strong browser encryption is used when accessing the platform
  3. Betterment can help you in the event that there is unauthorized access and use of your account, including potentially recovering losses
  4. Personal data is never shared with another third-party without user permission
  5. Frequent checks are run on all software and systems to ensure neither can be hacked
  6. The app itself uses 2 factor authentication

Betterment takes numerous steps to keep your account and information safe and secure.

Article written by Cari Scribner
Cari Scribner is a career journalist with 20 year’s experience writing for newspapers and magazines. Now a freelance writer, she is also a published fiction writer with more than 15 short stories in literary mags. She recently completed a novel that is on the desk for consideration at two publishing houses. She lives with her two small dogs, Miloh and Lucy, in Upstate NY.

Platform Reviews

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Fundrise
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
Copyright © 2018 – 2022 Investing Simple LLC. All Rights Reserved.
Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Developed by Stallion Cognitive
magnifiermenuchevron-downcross-circlechevron-down-circle
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram
Copy link
Powered by Social Snap