Betterment Cash Reserve
Betterment offers a 3.25% APY with no monthly fee and no minimum, with deposits swept to partner banks. A cash management account holds your uninvested cash and sweeps it to partner banks for FDIC coverage well above the standard $250,000 limit. The rate comes from our verified data partner — a flexible home for cash that sits alongside your investments.
Is the Betterment Cash Reserve worth it?
Betterment Cash Reserve offers a 3.25% APY with no monthly fee and no minimum, with deposits swept to partner banks, a 3.25% APY as of December 12, 2025. We source this rate from our data partner and Betterment, our verified data partners. It carries our ◆ Partner data label — we did not fetch it from the provider ourselves.
A cash management account is offered by a brokerage or fintech, not a bank. It sweeps your uninvested cash to partner banks that are FDIC members, which extends coverage well beyond the standard $250,000 per-bank limit. That makes it a handy place for cash you want to keep liquid next to your investments.
The honest caveats: the APY is partner-supplied and variable, and insurance comes through the program banks rather than the provider directly. Confirm the current rate and the program-bank list on the provider’s own site. This is not financial advice.
How does a high-yield savings account work?
A high-yield savings account holds cash and pays interest, quoted as an annual percentage yield (APY). The bank can change a variable APY at any time, and federal rules may limit certain withdrawals. Interest compounds — usually daily or monthly — and is taxable income in the year you earn it.
How much could you earn with the Betterment Cash Reserve?
At a 3.25% APY, a $10,000 balance in the Betterment Cash Reserve earns about $325 in interest over a year, before taxes. Double the balance and you roughly double the interest; your real return depends on how long the rate holds.
Illustrative estimate based on the figures on this page, not an offer. Your results will differ.
What are the pros and cons of the Betterment Cash Reserve?
The Betterment Cash Reserve stands out for 3.25% APY, sourced from our verified data partner, though rate is partner-supplied and variable — not fetched from the provider ourselves.
- 3.25% APY, sourced from our verified data partner
- No monthly fee
- FDIC-insured through partner banks, well above the standard $250,000 limit
- Rate is partner-supplied and variable — not fetched from the provider ourselves
- Insurance is via program banks, not the provider directly
- Yields can trail the very top high-yield savings accounts
Who should get the Betterment Cash Reserve?
The Betterment Cash Reserve is best for investors who want a high yield on cash next to their brokerage.
- Investors who want a high yield on cash next to their brokerage
- People who want FDIC coverage above $250,000 via program banks
- Anyone consolidating spending and savings in one app
How does the Betterment Cash Reserve compare?
Among the 6 cash management accounts we track, the Betterment Cash Reserve ranks #1 with a money8020 score of 94/100.
| Product | Score | Tier | Provider |
|---|---|---|---|
| Betterment Cash Reserve | 94 | Essential | Betterment |
| Wealthfront Cash Account | 93 | Essential | Wealthfront |
| Vanguard Cash Plus Account | 85 | Strong | The Vanguard Group |
| Robinhood Gold Cash Sweep | 84 | Strong | Robinhood |
| Empower Personal Cash | 82 | Strong | Empower |
See all cash management accounts, ranked →
Common mistakes to avoid with a high-yield savings account
- Chasing a teaser rate without checking the ongoing APY or any balance tier needed to earn it.
- Leaving an emergency fund in a 0.01% big-bank account instead of a high-yield account.
- Assuming the APY is fixed — it is variable and can drop after you open.
- Overlooking transfer times: moving money to a linked bank can take one to three business days.
Key takeaways
- Betterment Cash Reserve earns a money8020 score of 94/100, ranking #1 of 6 cash management accounts.
- 3.25% APY, sourced from our verified data partner
- At a 3.25% APY, a $10,000 balance in the Betterment Cash Reserve earns about $325 in interest over a year, before taxes.
- Best for investors who want a high yield on cash next to their brokerage.
- Rate and terms sourced from our verified data partner.
Frequently asked questions about the Betterment Cash Reserve
What APY does the Betterment Cash Reserve pay?
Per our data partner, it pays a 3.25% APY as of December 12, 2025. Cash management rates are variable and can change at any time — confirm the current rate on Betterment's site. This is not financial advice.
Is the Betterment Cash Reserve FDIC insured?
A cash management account is not a bank account itself; it sweeps your cash to partner banks that are FDIC members, which provides coverage above the standard $250,000-per-bank limit. Review the provider's program-bank list for details.
Can the rate on the Betterment Cash Reserve change?
Yes. A high-yield savings APY is variable, so the bank can raise or lower it at any time, often following moves in the federal funds rate. Check the rate before you open and review it periodically.
How is interest from the Betterment Cash Reserve taxed?
Savings interest is taxable as ordinary income in the year you earn it. If you earn more than $10, the bank sends a Form 1099-INT, and you report it on your federal return.
Sources
We sourced these figures from our verified data partner and independently confirmed the provider’s regulator status, last checked May 30, 2026. Primary sources: