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Betterment Hikes APY to 2.69%, Adds New Checking, Savings Accounts

July 26, 2019
Banking, Banking News, Personal Finance
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Editor’s note

The APY described on this page reflects the rate at the time of publication. Rates can often change; for the most recent APYs, check Betterment’s website.

Financial advisory service Betterment has broken ahead of the high-interest savings pack with the launch of a market-leading 2.69% annual percentage yield. The rate comes in conjunction with its new checking and savings platform, Betterment Everyday.


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The Betterment Everyday Savings account is available now, and the Betterment Everyday Checking account will be available later this year, the company says. The high interest rate is a promotional offering for Betterment Everyday Savings customers who sign up to join the waitlist for the new Everyday Checking account.

The Betterment Everyday Savings account has no monthly maintenance fees and has no minimum balance after a $10 minimum opening deposit. Through partner banks, funds in the account are also insured by the Federal Deposit Insurance Corp. up to $1 million.

Customers who choose not to join the Everyday Checking waitlist will earn 2.43% on their accounts, still well above what most brick-and-mortar banks offer.

The platform has apparently drawn regulatory interest: CNBC reported that regulators have asked Betterment to clarify some details about its new account offerings, although the content of the request wasn’t revealed. (Betterment states on its website that it’s not a bank, but these new accounts seem to be offering bank-like services through partner banks.) A Betterment spokesperson told CNBC that the company doesn’t comment on regulatory matters.

The Betterment Everyday accounts are replacing Betterment’s Smart Saver account. The Smart Saver account was part of a new wave of cash management accounts, or cash accounts, that combine the features of different deposit accounts, usually under the umbrella of an investing firm.

The new Betterment Everyday accounts appear to be more like traditional, separate checking and savings accounts, but still maintain some of the features of the cash management accounts, such as high interest rates and investing services.

The Everyday Savings account also has no withdrawal limits. That’s different from standard savings accounts, which under federal regulations typically only allow six withdrawals per month.

Traditional brick-and-mortar banks tend to offer very low interest rates, often around 0.01%. Online banks and cash management account providers typically offer interest rates at 2% or above, which can make a huge difference in the long term. For example, if you save $10,000 and add $100 per month to a bank account with a 0.01% APY for 10 years, with compound interest, you’ll have earned just $17. In an account with an APY of 2%, however, that same money will have earned over $3,500 in interest.

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