While Betterment is well known as one of the most popular robo-advisors for beginners and seasoned investors, this online firm has chosen to dive into the banking industry in recent years. Betterment originally started out with an online savings account that is now known as the Betterment Cash Reserve account, yet on April 21st of 2020, Betterment also rolled out a new checking account product to the general public. With this mobile-first checking account, you get a debit card, an account with no fees, and ATM and foreign fees reimbursed.
If you’re looking for a checking account and plan to do most of your banking online, Betterment’s new checking account is worth considering. Just remember that, like all banking products, there are plenty of pros and cons to consider.
About the Company
Betterment was founded in 2008, although it didn’t officially launch to the public until 2010. This company offers the help of a financial advisor without having to visit a stuffy sales office or deal with sales pitches or ridiculous fees. When it comes to investing with Betterment, you’ll pay a flat fee of .25% to 40% for account management and personalized financial advice. (See also: Betterment Investing Review)
Betterment Checking is appealing based on the fact there are no fees or “gotchas” to be aware of. ATM fees and foreign transaction fees are also reimbursed worldwide, so you can take this card with you no matter where you go.
Like Betterment’s other services, Betterment Checking benefits from a helpful mobile app. You can use the Betterment app to track your spending and manage the money kept in your Betterment Checking account.
Betterment Checking accounts are FDIC-insured for up to $250,000. This is the industry standard, and it’s important to make sure any account you sign up for offers this protection.
Betterment Checking: Detailed Review of Features
Betterment Checking is a new type of account that lets you take advantage of digital checking with the use of a mobile app and a connected debit card. Major benefits include:
Getting ATM and foreign transaction fees reimbursed worldwide
Paying no monthly transaction fees, maintenance fees, overdraft fees, or hidden fees
Having your deposits insured for up to $250,000
Important features you can look forward to with a Betterment Checking account include:
Move money between Betterment accounts you have with ease, including any funds you have in a Betterment Cash Reserve account. You can also automate transfers to a Cash Reserve account, which you can then funnel into a Betterment investment account. Best of all, you can do this all in one place and for free.
You don’t have to use a mobile device to manage your Betterment Checking account, but you have that option thanks to the user-friendly mobile app. You can also manage your Betterment Checking account using a desktop computer, making it easier than ever to manage your money whether you’re at home or on the go.
Betterment Checking comes with a debit card that lets you pay bills or make purchases with a tap-to-pay feature. There are no extra fees involved in acquiring or using your debit card for purchases.
Betterment Security Features
It’s crucial to keep your money safe, and Betterment focuses on security as an integral part of its core business plans. Important security features include aggregated app passwords, two-factor authentication, and protected account log-ins for mobile.
Other Betterment Checking features that will soon be on the way include mobile check deposits, physical checkbooks and checks, joint checking accounts, effortless direct deposits and more.
How to Open a Betterment Checking Account
Opening a Betterment Checking account is a breeze. All you have to do is head to the Betterment Checking account page and click on the button that says “Get Checking.”
From there, you’ll follow the instructions, including these steps:
Step 1: Provide Betterment with your email address.
Step 2: Create a password.
Step 3: Provide your contact information.
Step 4: Verify your identity.
Step 5: Share your employment status.
Step 6: Share basic financial information.
Step 7: Answer regulatory questions.
Step 8: Answer security questions.
At this point in the process, you can accept the terms and conditions and open your account. From there, you can connect another bank account for funding, as well as confirm all the information in your account is correct.
While this may seem like a lot of steps, the entire process of opening a Betterment Checking account only takes five minutes.
When to Use Betterment Checking
Considering Betterment Checking doesn’t charge any account maintenance fees or hidden fees, this account could work for anyone who wants access to checking features and a connected debit card account. However, there are definitely some types of consumers who could benefit the most.
Consider signing up for Betterment Checking if you can relate to any of these scenarios:
You travel outside the United States often and you hate trying to guess how much you’ll be charged to use a foreign ATM. With reimbursed foreign ATM fees worldwide, you’ll never have to wonder again.
You travel within the U.S. often and hate spending your time looking for an ATM in your network. Use any of the 2.8 million ATMs where Visa is accepted worldwide, and you won’t have to worry about fees.
You like monitoring your checking account on the go, so you want to be able to use a mobile app. The Betterment app lets you manage your money and bills using your favorite mobile device.
You’re a Betterment Cash Reserve or investing customer already, and you want to be able to move money freely between accounts. You can transfer money seamlessly from Betterment Checking to a high-yield Betterment Cash Reserve account, then to your investment accounts.
Betterment Checking vs. the Competitors
Several other online banks and robo-advisors have rolled out their own online checking accounts with success over the last few years. This comparison chart can help you see where the options differ and the features each one offers.
Citi High-Yield Checking Account
$15 monthly service fee for balances of $5,000 or less
Minimum to open
Reimbursed ATM fees worldwide
Mobile app available
What You Need to Know About Online Banking
Due to technology and the internet, the banking industry has changed dramatically over the years. Where people once did all their banking with a big name bank within their community, many people now turn to online banking for better perks and performance, including higher interest rates on deposits.
A recent report from Allied Market Research shows that the online banking market may increase to $29,976 million in 2023, whereas the market was only 7,305 million in 2016. In the meantime, traditional brick and mortar banks will continue serving customers, but there is no way that traditional banks could possibly keep up with or compete with rising online banks.
According to their research, online banking continues to grow based on customer convenience and the ability of online banks to keep costs down. “Less bank staff, no cost of significant infrastructure, and overhead costs allow online banking portals to pay higher interest rates on savings and charge lower mortgage and loan rates,” writes the firm.
With all of this in mind, it’s expected that we’ll have more options when it comes to banking and investing in the future thanks to technology. And with more mobile-friendly and digital banking available, costs should go down while interest rates and customer benefits continue to increase.
Betterment Checking is just one component of the growing online banking world. Robo-advisors like Betterment have also disrupted the financial planning industry, and an array of online banks and lenders have rolled out other products like online personal loans and digital high-yield savings accounts galore.
If you need a checking account and you don’t want to pay any account maintenance fees or hidden fees, Betterment Checking is hard to beat. You can open your account online in a matter of minutes without a minimum opening deposit, and you’ll get a free debit card to use. Not only that, but you’ll have all your ATM fees reimbursed worldwide, and you can manage your entire account, your spending, and your bills from your mobile device.
Since Betterment Checking is free to use, you have nothing to lose by giving it a try. Consider opening an account today, and see where Betterment Checking can take you.
Read more: goodfinancialcents.com