January 27, 2023

The world has no scarcity of on-line and mobile-first banks. I spend quite a lot of time researching and writing about monetary expertise, and if I discover all of them tough to maintain straight, I can’t think about what it’s like for somebody unfamiliar with the panorama. Discovering a dependable place to park your cash shouldn’t require a lot effort.

In the event you’re in search of some assist, you’ve landed in the appropriate place. Betterment Checking, a comparatively new digital deposit account from the robo-investing pioneer, is a more sensible choice than 80% of the options. It deserves a spot in your shortlist.

An enormous supply of Betterment Checking’s power is its affiliation with Betterment’s different monetary accounts, which embody a high-yield financial savings account and a number of funding accounts. However Betterment Checking stands by itself due to its nearly nonexistent payment schedule and above-average debit card rewards program. See if it is sensible for you.

What Is Betterment Checking?

Betterment Checking is a free checking account with no minimal stability requirement. It comes with a Visa debit card that earns cash-back rewards on purchases with a whole bunch of retailers. 

In contrast to some “free” checking accounts that cost overdraft or ATM withdrawal charges, Betterment Checking has nearly no charges, and it reimburses out-of-network ATM withdrawal charges worldwide.

Betterment’s banking accomplice is NBKC Financial institution, which offers monetary providers for Betterment Checking customers. By NBKC Financial institution, Betterment Checking deposits carry as much as $250,000 in FDIC insurance coverage.

Betterment Checking is one among a number of monetary merchandise supplied by Betterment. Others embody a high-yield financial savings account (Betterment Money Reserve), a taxable funding account, a retirement funding account, and a crypto funding account. You need to apply for and open every account individually, however should you simply want a day-to-day cash administration account, you’re free to make use of Betterment Checking solely.

What Units Betterment Checking Aside?

Betterment Checking has three key promoting factors that set it aside from most different on-line checking accounts:

  • It’s Really Price-Free. Many on-line deposit accounts name themselves “free,” betting you received’t learn the effective print. However Betterment Checking actually is free. It doesn’t have a month-to-month upkeep payment, it waives overdraft charges, and it reimburses ATM and overseas transaction charges.
  • It’s One in every of A number of Monetary Accounts From Betterment. Betterment isn’t a one-stop monetary store as a result of it doesn’t make loans or problem bank cards. But it surely’s greater than only a single-digital deposit account. You possibly can park your cash in a financial savings account, spend money on ETFs, and maintain crypto with Betterment.
  • It Has a Very Good Rewards Program. Betterment Checking is a real rewards checking account. You possibly can earn as much as 5% money again immediately on eligible purchases with big-name manufacturers like Costco and Adidas right here.

Key Options of Betterment Checking

These are Betterment Checking’s most vital options. Use this record to find out if Betterment Checking is an efficient match for you.

Visa Debit Card

Open a Betterment Checking account, get a Visa debit card accepted by tens of millions of retailers worldwide. Whole lot.

Betterment Checking’s Visa debit card is contactless. You possibly can swipe, dip, or faucet to pay, relying on the service provider’s cost setup. You can even add your card to Apple Pay or Google Pay and full in-person transactions along with your cellphone.

Automated Money-Again Rewards

With Betterment Checking, eligible debit card purchases earn as much as 5% money again (and infrequently extra). 

There’s a catch. In contrast to conventional debit or bank card rewards applications, you received’t earn on each buy. By Dosh, its rewards accomplice, Betterment Checking delivers money again solely on purchases with particular retailers.

That’s the dangerous information. The excellent news: You possibly can earn with 1000’s of collaborating retailers, together with huge names like Costco and Adidas. And since the common earn charge is larger than the usual 1% or 1.5% supplied by most flat-rate rewards debit playing cards, you should still come out forward, although that finally is determined by how (and the way a lot) you spend.

Joint Checking Accounts

You possibly can arrange your Betterment Checking account as a person account (with you as the only account holder) or a joint account (with you and a accomplice as equal account holders). 

The joint account possibility is commonplace at conventional brick-and-mortar banks and credit score unions, nevertheless it’s not that frequent (but) within the on-line banking world. Many monetary expertise corporations don’t see it as a precedence, probably as a result of they have an inclination to serve youthful customers who’re much less prone to be in severe home relationships. So it’s notable and welcome that Betterment Checking goes the additional mile for {couples}.

Complimentary Cell Cellphone Safety Protection

Pay your month-to-month mobile phone invoice in full along with your Betterment debit card and also you’ll qualify for as much as $600 in mobile phone safety protection per declare (minus a $50 deductible per declare). You’re restricted to 2 claims per 12 months, so this isn’t a license for recklessness, nevertheless it’s nonetheless a pleasant guard in opposition to the surprising.

Account Charges (Or Lack Thereof)

To reiterate, Betterment Checking has nearly no charges. Meaning:

  • No month-to-month charges
  • No minimal stability payment
  • No overdraft charges
  • No in-network ATM charges
  • Reimbursement of all out-of-network ATM charges, together with at worldwide ATMs
  • Reimbursement of overseas transaction surcharges (often 1% of the transaction quantity)

Backside line: You don’t have to fret about Betterment Checking nickel-and-diming you as big-name conventional banks are wont to do.

Paper Checks

In the event you nonetheless pay for stuff by verify often, Betterment Checking has you coated. You do must request paper checks, although. They don’t come mechanically if you open an account.

Betterment began off as a robo-advisor platform for hands-off traders who didn’t wish to pay monetary advisor costs. That investing platform continues to be on the firm’s core; Betterment Checking is a comparatively late arrival.

However you need to stroll earlier than you possibly can crawl, so don’t really feel dangerous should you don’t have spare money to speculate. To begin, you possibly can open a Betterment Checking account solely. As your internet price grows, you possibly can add:

  • A high-yield financial savings account with as much as $1 million in FDIC insurance coverage protection (Betterment Money Reserve) and a juicy rate of interest (at present 3.20% APY)
  • A taxable funding account — simply reply a couple of questions on your objectives and danger tolerance, and Betterment builds your portfolio utilizing low-cost ETFs
  • A tax-advantaged funding account for retirement — similar deal right here on the automation entrance, no stock-picking crucial
  • A crypto account the place you should buy, promote, and maintain Bitcoin and different common cryptocurrencies

If and if you open these accounts, you possibly can hyperlink them to your Betterment Checking account and transfer fiat foreign money (not crypto) between them at will inside the app. 

Benefits of Betterment Checking

These are the strongest options of Betterment Checking. 

  • Just about No Charges. In contrast to many opponents that declare to be free however nonetheless discover a technique to half customers from their hard-earned cash, Betterment Checking actually is free. You don’t have to fret about upkeep, overdraft, or ATM charges right here.
  • Affords a Joint Account Choice. Able to merge funds along with your partner or home accomplice? Open a joint checking account with Betterment Checking. Many opponents don’t provide this flexibility, not less than not but.
  • Reimburses Out-of-Community ATM and Overseas Transaction Charges. In the event you want money removed from house, concern not: Betterment Checking reimburses out-of-network ATM charges, so that you’ll by no means have to fret about predatory money machine surcharges. The identical goes for Visa’s customary 1% overseas transaction payment — Betterment covers that too.
  • Get a Higher-Than-Common (and On the spot) Return on Eligible Spending. You possibly can earn as much as 5% money again on eligible purchases with Betterment Checking. Money rewards hit your account instantly after you’ve earned them  — no must redeem them manually. Test the app for the most recent affords and plan your spending accordingly.
  • Pairs With Investing and Financial savings Account If You Want Them. Betterment additionally affords a fee-free financial savings account (Betterment Money Reserve) and a number of funding account choices. So you possibly can maintain your day-to-day and longer-term monetary wants right here, no downside.  
  • Pay With Paper Checks If You Need. You possibly can write checks out of your Betterment Checking account if you might want to. That is one other above-and-beyond characteristic that many digital finance apps don’t trouble with anymore.
  • Get pleasure from Complimentary Cell Cellphone Safety. Betterment Checking’s mobile phone safety plan is complimentary if you pay your month-to-month cellphone invoice in full out of your account. In the event you’re susceptible to damaging or destroying your mobile phone, it’s a pleasant perk to have.

Disadvantages of Betterment Checking

Think about these drawbacks earlier than opening a Betterment Checking account.

  • No Loans or Credit score Traces Right here. Betterment doesn’t provide loans or traces of credit score, together with bank cards. (You should use the “credit score” possibility in your Visa debit card to pay for stuff, however that doesn’t rely as a result of the cash nonetheless comes proper out of your account.) So it’s not a full-service monetary establishment.
  • No Curiosity on Balances. Many on-line checking accounts pay curiosity on balances. Not Betterment Checking. If you wish to earn curiosity in your day-to-day funds, look to Ally Financial institution’s Curiosity Checking account in its place.
  • Not All Purchases Qualify for Rewards. The not-so-hidden draw back of Betterment Checking’s rewards program is that it’s tied to particular manufacturers, like Costco and Aeropostale. That’s nice if and if you spend with these manufacturers, however some purchases will slip by the cracks.

Is Betterment Checking Legit?

Sure, Betterment Checking is legit.

Betterment has been round for greater than a decade. It was one of many first low-cost robo-advisors for hands-off traders and stays a best choice for individuals who don’t wish to pay full-service human advisor costs. Although Betterment Checking wasn’t a part of Betterment’s unique product lineup, it’s an natural a part of the Betterment household with the identical spectacular pedigree. 

How Betterment Checking Stacks Up

In the event you’re in search of options to Betterment Checking, you’ll quickly come throughout the Wealthfront Money Account. 

Each are low-cost, high-yield deposit accounts tied to low-cost automated funding platforms. See how they evaluate right here.

Betterment Checking Wealthfront Money Account
Month-to-month Price $0 $0
Debit Card Sure No
Spending Rewards Sure, as much as 5% money again with choose manufacturers No
Yield None, however hyperlinks to Betterment Money Reserve (present yield 3.20% APY) Sure, at present 3.30% APY

Different Alternate options to Think about

Betterment Checking and Wealthfront Money aren’t the one digital deposit accounts price trying out. In the event you’re unsure both is correct on your wants, contemplate these options.

Competitor Greatest For
GO2Bank As much as 7% instantaneous money again on eGift card purchases
M1 Spend Flat money again (1%) on all eligible debit card purchases
TD Financial institution Past Checking New account bonus price $300 with qualifying actions

Last Phrase

Betterment Checking is, effectively, higher than many of the on-line deposit accounts I’ve reviewed. It has an excellent (although restricted) rewards program, nearly no charges, and a joint account possibility. It affords alternatives for progress, too. You can begin with a Betterment Checking account, then open a Betterment Money Reserve account and a number of Betterment investing accounts as your internet price grows.

Is Betterment Checking proper for everybody? No. You may want a flat-rate rewards program slightly than one tied to particular retailers, or an account that pays curiosity on money balances. 

And even when Betterment Checking is your preferrred on-line checking account, Betterment in all probability received’t be the one monetary establishment you’ll work with in your life (and even this 12 months). With no credit score merchandise, CDs, or cash market accounts, its account lineup has some vital gaps you’ll must fill elsewhere.