- The account is good for people who don’t mind banking digitally, as well as those who frequently travel or need access to cash.
- You don’t need an opening deposit or minimum balance to set up an account, and you won’t pay a monthly service fee.
- You can earn cash back rewards with your Betterment debit card; the amount you’ll earn depends on the retailer but generally ranges from 2% to 20%.
Betterment, one of the first big-name investing apps, is known for its diverse approach to investing, low fees, and $0 initial deposit requirements. Along with algorithm-based portfolio management, it also offers retirement account management and one-on-one sessions with financial planners. In 2019, it debuted a high-yield savings account.
Betterment has teamed up with NBKC Bank to provide the
Should you open a Betterment checking account?
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The bottom line:
Betterment Checking is a strong no-fee account, as long as you don’t mind waiting on a few features that are still in development, like joint checking accounts.
The pros of
All ATM fees are reimbursed
Betterment doesn’t have an ATM network, so when you withdraw money from an ATM, the provider will likely charge you a fee. Thankfully, Betterment immediately reimburses you for ATM fees. Betterment will send you a push notification to let you know the refund is being deposited, and you should see the money in your account.
Not all banks reimburse out-of-network ATM fees. Those that do typically place a limit on the amount they’ll refund per month, usually around $10 or $15 — but Betterment offers unlimited reimbursements. This makes Betterment a good choice if you use ATMs often.
Your Betterment debit card is a Visa card, so you can use the card at any ATM that accepts Visa.
Visa foreign transaction fees are reimbursed
When you travel abroad, Visa charges a 1% fee on transactions, ATM withdrawals, and debit card purchases. But Betterment reimburses these foreign transaction fees, making this a great debit card for traveling.
You’ll earn cash back rewards
You can swipe your Betterment debit card at thousands of retailers to earn cash back. The percentage you’ll earn will depend on a) which business you shop at, and b) whether there are any new cash back promotions — but you can typically expect to earn 2% to 20% cash back.
Scroll through your Betterment app to see how much you can earn at various retailers. Betterment will even track your debit card transaction history to recommend cash back deals at places you tend to visit.
You don’t need any money to get started
You don’t have to make an initial deposit to open your Betterment checking account, and there’s no required minimum balance.
There are no monthly or overdraft fees
Betterment doesn’t charge a monthly service fee. The company also won’t charge you a fee if you overdraw from your checking account — Betterment will simply deny your purchase. These features make the account more affordable than many competing accounts.
The mobile app is easy to use
The company added features to its app for checking account holders: You can set up your account, order a debit card, activate your card, and deposit paper checks through the app.
Your account is secure
You can lock your debit card if you misplace it and reset your PIN through the Betterment app. It’s good to be able to take these security measures quickly even if you aren’t near your computer, and you don’t have to call a customer service representative to take action for you.
To keep your account secure, Betterment has aggregated app passwords. This means you can create a budget with Mint, for example, by linking Mint and Betterment, but Mint doesn’t actually have access to your login information. Or you could nest Betterment within TurboTax to file your taxes, but TurboTax can’t access your Betterment password.
To keep others from accessing your account, Betterment requires two-factor authentication and a biometric login.
Betterment’s two-way sweep helps you earn interest and avoid overdrafts
If you have both a Betterment Checking and Betterment Cash Reserve Account (Member FDIC), you can benefit from Betterment’s “two-way sweep,” a feature that transfers money between the two accounts.
Betterment regularly assesses your Betterment Checking account to determine whether you have extra money based on your usual spending habits. If so, Betterment sweeps the extra funds into your Cash Reserve account, where it earns interest.
You’ll receive an email informing you of an upcoming sweep. If you decide you don’t want to transfer the money to your Cash Reserve account, you have until 12 p.m. ET the following day to cancel the sweep by following the link in the email or by logging into your account.
If Betterment recognizes that you have less money than you’d need for the next 21 days in your checking account (based on your spending habits), it will sweep money from Cash Reserve to Checking to ensure you won’t have a transaction denied because it would overdraw your account. The two-way sweep helps your two accounts work together.
The cons of
There are no physical locations
Betterment doesn’t have any brick-and-mortar offices. If you prefer speaking with a banker face-to-face, this account might not be the right fit for you.
If you don’t have also have a Cash Reserve account, you won’t earn interest
Betterment Cash Reserve pays interest on your savings. If you have both a Checking and Cash Reserve account, the two-way sweep will help you earn interest by moving money between the two accounts.
However, Betterment Checking does not pay interest on your money. If you don’t have a Cash Reserve account, you won’t earn interest through Betterment.
Some features are still in the works
Betterment’s team is still developing the following features:
- Physical checkbooks
- Joint checking accounts
Betterment Checking Account features
Setting up a Betterment Checking account is free — you don’t need to make an initial deposit or maintain a required minimum balance, and Betterment doesn’t charge monthly service fees. The company doesn’t charge a fee for overdrawing from your account, either.
One of the checking account’s main draws is probably its fee reimbursements. Betterment doesn’t charge fees for using ATMs, but ATM providers might. When this happens, Betterment will refund you 100% of your ATM fees.
Betterment also reimburses Visa’s 1% foreign transaction fee if you use your Betterment Visa debit card abroad.
The company also offers cash back rewards when you shop at thousands of businesses, usually ranging from 2% to 20%.
You’ll access your checking account completely through your online account and through the mobile app. You can even set up your account, order your debit card, activate the card, and deposit paper checks through your app.
How Betterment compares to similar checking accounts
None, but unlimited ATM fee reimbursements
19,000 free ATMs
None, but unlimited ATM fee reimbursements
Betterment review vs. Wealthfront review
You’ll probably prefer Betterment if you want to set up separate checking and savings accounts with the same company.
However, if you only have a checking account and not a savings account with Betterment, then none of your money will earn interest. If you’re only looking to open a checking account, then it might be better to go with Wealthfront.
Betterment review vs. Acorns review
Acorns is another online investment platform, and although it offers a checking account, it doesn’t have a savings account option. Instead, Acorns focuses on putting your extra money into your investment and retirement accounts.
Acorns charges a $3 monthly fee; granted, that fee covers a checking, investment, and retirement account.
Basically, Acorns accounts all work together, and the company’s main focus is clearly on investing. There isn’t a point in having an