Betterment Cash Reserve Review 2026

What Is Betterment Cash Reserve?

Betterment Cash Reserve isn't technically a savings account—it's a cash management account offered through Betterment's brokerage platform. Your deposits are swept to partner banks, where they earn interest and receive FDIC insurance.

Think of it as Betterment handling the complexity of spreading your money across multiple banks while you see a single, simple account.

Interest Rate: 3.75% APY

Betterment currently pays 3.75% APY on all Cash Reserve balances. This is notably higher than Wealthfront's Cash Account (3.25%) and competitive with traditional high-yield savings accounts.

The rate applies to your entire balance with no tiers, no minimum requirements, and no direct deposit hoops. Betterment has historically adjusted rates quickly with Fed changes.

The $2 Million FDIC Coverage

Betterment spreads your deposits across their partner bank network, currently providing up to $2 million in FDIC coverage for individuals ($4 million for joint accounts).

Partner banks include Citibank, Barclays, and other major institutions. Each bank holds up to $245,000 of your funds, with the $5,000 buffer allowing room for interest accrual.

Betterment vs. Wealthfront Coverage

If you have more than $2M in cash, Wealthfront's extended coverage becomes essential despite the lower rate.

Two-Way Sweep: Automated Cash Management

Betterment's killer feature is the Two-Way Sweep, which automatically moves money between your Cash Reserve and investing accounts based on rules you set:

• Cash target: Maintain a specific balance in Cash Reserve
• Auto-invest excess: Sweep amounts above target into your portfolio
• Auto-replenish: Sell investments to refill cash when needed

This automation is genuinely useful for disciplined savers who want their cash working without constant manual transfers.

Goal-Based Savings

Unlike most cash accounts, Betterment lets you create multiple "goals" within your Cash Reserve—essentially savings buckets for different purposes:

• Emergency fund
• Vacation savings
• Down payment fund
• Tax reserve

Each goal can have its own target amount and timeline. It's similar to Ally's buckets feature, which is rare in the cash account space.

Transfer Speed: The Weak Spot

This is Betterment's Achilles heel. External transfers can take 4-5 business days—significantly slower than Wealthfront's instant transfers or Marcus's same-day ACH.

For emergency funds, this lag could be problematic. If you need cash fast, Betterment isn't the best choice.

Integration with Betterment Investing

If you use Betterment's robo-advisor, Cash Reserve integrates beautifully:

• Instant internal transfers: Move money between cash and investments immediately
• Tax-loss harvesting: Betterment's flagship feature works alongside your cash
• Unified dashboard: See all accounts in one place
• Goal tracking: Link cash goals to investment goals

For non-Betterment users, you'll need to open a Betterment account first, which may feel like overkill for just a cash account.

Security and Trust

Betterment is an SEC-registered investment advisor managing over $35 billion in assets. They've operated since 2010 without major security incidents.

Your cash is held at FDIC-insured partner banks, not with Betterment directly. Even if Betterment failed, your deposits would remain protected at the partner banks.

Who Should Choose Betterment?

Betterment Cash Reserve is ideal for:

• Existing Betterment investors: Seamless integration
• Savers with $250K-$2M: Extended FDIC coverage at competitive rates
• Automation lovers: Two-Way Sweep is genuinely useful
• Goal organizers: Multiple savings buckets built-in

Betterment is NOT ideal for:

• Emergency fund keepers: 4-5 day transfers are too slow
• Rate chasers: Traditional HYSAs pay 4%+
• $2M+ savers: Wealthfront offers more coverage
• Cash access needers: No ATM or debit card

Betterment vs. Wealthfront: Which Is Better?

This is the key comparison for high-balance savers:

Bottom line: Choose Betterment if you prioritize rate and automation. Choose Wealthfront if you need more FDIC coverage, instant access, or a debit card.

The Bottom Line

Betterment Cash Reserve occupies a useful middle ground: higher rates than Wealthfront with meaningful FDIC expansion beyond the standard $250K. The Two-Way Sweep and goal-based savings add genuine value for organized savers.

The slow transfer speeds are a real limitation—this isn't an emergency fund account. But for long-term cash storage with investing integration, Betterment delivers.