A smarter way to stash your cash (2024)

The takeaway: Cash Reserve is our high-yield cash account offering FDIC insurance at our program banks (up to $250,000 of coverage for each insurable capacity—e.g., individual or joint—at up to eight Program Banks). It’s different from the savings accounts that you might find at traditional banks.

• We’re not tied to one specific bank. We use our size and scale to access a network of program banks.
• By spreading customer deposits across multiple program banks, it allows us to provide you with attractive rates and higher FDIC insurance than the average savings account.*

Funds deposited into Cash Reserve are eligible for FDIC insurance once the funds reach one or more program banks. 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.

Our high-yield Cash Reserve account offers a competitive APY rate, allowing you to secure and grow your money during volatile times.

Here’s how variable rates work:

• The rate is variable, meaning it will change with the prevailing interest rate environment.
• The amount banks are willing to pay on deposits is heavily influenced by the Federal Reserve, which sets the rate at which banks can loan money to each other. This is known as the Federal Funds Rate.
• If the Federal Reserve increases or lowers its target range, the interest rate on Cash Reserve will generally change by a similar amount. You can expect this to impact rates at other banks as well.
• You can feel confident that Betterment is always working to offer you competitive interest rates, no matter what the current rate environment may be.

Our Cash Reserve account offers FDIC insurance up to $2 million ($4 million for joint accounts) with our program banks. That’s 8X the standard FDIC insurance.*

Here’s how FDIC insurance works:

• By spreading customer deposits across multiple program banks (as opposed to keeping everyone’s money at one institution), we’re able to stack the standard $250,000 of FDIC insurance per institution.
• We originally used this approach to offer up to $1M ($2M in joint accounts) in FDIC insurance for money saved in Cash Reserve. But after the news about Silicon Valley Bank, we set to work to double the coverage amount of FDIC insurance through our program banks.

Plus, we don’t charge fees on your Cash Reserve account: Betterment LLC only receives compensation from our program banks. Betterment LLC and Betterment Securities do not charge fees on your Cash Reserve balance.

Why it matters: Similar to how our approach to investing is grounded in diversifying assets, Cash Reserve diversifies savings across multiple institutions. In addition to a competitive variable rate and above-average* FDIC insurance, this approach could help mitigate loss and risk in the unlikely scenario that one of our program banks fails. You can’t eliminate risk, but you can help reduce it by using technology and creative thinking.