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In the past, checking accounts have rarely been something special. Regardless of where you went, they pretty much all did the same things. But in recent years, accounts like Betterment Checking have emerged, making it easier and cheaper to do your regular everyday banking.
Betterment Checking offers a completely fee-free, online checking account without some of the constraints of traditional checking accounts. You'll also get the chance to earn cash back with select merchants.
Here's everything you need to know about the Betterment Checking account and how to decide whether it's right for you.
About Betterment
Betterment LLC is a financial services company that began as a robo-advisor in 2008. Robo-advisors use algorithms to manage investor portfolios at a fraction of the cost of a hands-on manager. Other robo-advisors include Wealthfront, Stash, Ellevest and many more.
In recent years, the company has branched out to offer banking products, including the Betterment Checking account and Cash Reserve account.
Betterment isn't a bank, so it provides its banking products through nbkc bank (member FDIC). It also doesn't offer a lot of the services you can get from brick-and-mortar banks and credit unions. However, Betterment's banking products are solid, especially for people who want to escape the fees that are so common with traditional deposit accounts.
Betterment Checking Account Review
The Betterment Checking account is the financial institution's only checking account, so you won't get a lot of choices like with other banks. But the perks of no fees and cash back can be incredibly appealing to some consumers. Here's what you need to know.
Features and Benefits
In addition to some of the standard features you can expect from a checking account, such as mobile check deposit, direct deposit and paper checks, you'll also get a few other impressive benefits.
Cash Back
Betterment is far from the only checking account that offers cash back when you use your debit card, but it may give you higher rewards rates on some purchases compared with the competition.
You'll earn cash back with select merchants on both in-store and online-only transactions. Based on examples on Betterment's website, rates can go as high as 5%, or potentially even higher. You'll typically get the cash back the next day, but it can take up to 90 days.
The only drawback is that you won't earn rewards on every purchase like you can with some other debit cards. You'll be able to view which cash-back offers are available through the Earn Rewards section of your Betterment account, which you can find in the mobile app.
Unfortunately, Betterment Checking is not an interest-bearing account, but that shouldn't matter if you're using the debit card enough to rack up cash-back rewards.
Cell Phone Protection
Cell phone protection is fast becoming a popular benefit among credit card issuers, but it hasn't taken off with checking accounts yet — which is what makes this feature so special.
When you use your Betterment Visa debit card to pay your phone bill, you can get up to $600 in benefits for covered damage or theft. You can file up to two claims per year for a total of $1,200 in annual benefits, and there's a $50 deductible with each claim.
You don't have to worry about enrolling to get the coverage, and the protection is good for every phone line that's listed on your monthly bill.
FDIC Insurance
Because Betterment isn't a bank, you may be concerned that your deposits won't be insured. But because nbkc bank is a member FDIC, your money will be FDIC-insured up to $250,000.
Contactless Payments
The Betterment Checking debit card has a tap-to-pay feature, which allows you to make purchases by tapping your card to a contactless-enabled card reader instead of swiping or inserting it.
This process provides the maximum security for a point-of-sale transaction and it processes more quickly than using your card's chip.
No Joint Accounts
Possibly the biggest downside to Betterment Checking is that you can't open a joint account with a partner or someone else. That said, the financial institution has stated that this feature is coming soon.
Until then, though, it may not make sense to open an account if you share your finances with someone else.
No Account Fees
A lot of online bank accounts highlight that they have no hidden fees. But what that really means is that while they don't charge some of the common bank account fees, like monthly fees and in-network ATM fees, they may still charge other fees that you'll find buried in the terms and conditions of the account paperwork.
With Betterment Checking, though, it truly doesn't charge any fees. That means no monthly fees, no overdraft fees, no ATM fees and more. There's also no minimum balance requirement.
ATM Access
Betterment Checking doesn't have its own ATM network, which is common with most banks and credit unions. Instead, the financial institution reimburses all ATM fees, making it so you don't have to worry about searching for in-network vs. out-of-network ATMs wherever you are — just use the closest one, and you're good.
No Foreign Transaction Fees
In addition to that, Betterment Checking also reimburses the foreign transaction fee that Visa charges on all purchases you make abroad — this fee is typically 1% of the transaction amount.
Account Access
As with most online banks, Betterment does not offer in-branch services at brick-and-mortar locations. Instead, you have access to your Betterment Checking through mobile app, ATMs, a secure website and other third-party payment apps.
Mobile App
The Betterment app provides everything you need to manage your account. That includes checking balances and transactions, making transfers, using mobile check deposits and more.
You can also connect your account to Zelle, Venmo, Cash App and more for peer-to-peer payments.
Locations
Betterment is an online-only, mobile-first financial institution. This means there are no brick-and-mortar locations where you can get in-person service on your account. If this is a dealbreaker for you, you'll be better off with an account from a different bank.
But if you're not concerned about doing all of your banking online, it's a solid product.
Betterment Cash Reserve Account
If you're considering a Betterment Checking account, it may also be worth it to open a Betterment Cash Reserve account as well. The Cash Reserve is a high-yield savings account that offers an above average APY, which is eight times higher than the average rate on a traditional savings account.
You'll also get up to $1 million in FDIC insurance because Betterment may hold your cash in up to four program banks, each providing $250,000 in coverage. Plus, there's no minimum balance requirement to earn the APY.
While joint accounts aren't yet available on the checking account, you can set one up with a Cash Reserve account.
Other Financial Products
Currently, the only products Betterment offers include the checking account, Cash Reserve and investments. On the investment side of things, you can open a retirement account or regular brokerage account.
Fees on Betterment's investment accounts are relatively low compared with other brokerage firms. However, keep in mind that a robo-advisor doesn't give the investor any control over exactly where their money is invested — you'll simply provide Betterment with some information about you, and it will create a portfolio with those details.
Is Betterment Checking Right for You?
Betterment Checking is one of thousands of bank accounts that are available in the U.S. This can make it incredibly difficult to find the best account for you and your needs. If you're considering opening a Betterment Checking account, take some time first to shop around and compare options from other financial institutions as well.
While you do this, consider which features are most important to you. For example, if you prefer in-person service, you'll be better off with a bank or credit union that has brick-and-mortar branches. Or if you want a debit card with a consistent rewards rate on everything, an account that offers that may be more appealing.
Finally, considering that Betterment doesn't offer a wide range of financial products, consider whether you'd prefer to have all of your financial accounts under one roof or if you're fine with using multiple institutions as long as you get the most value.
The important thing is that you take the time to consider not only your preferences but also your goals.
The Bottom Line
The Betterment Checking account offers a lot of value for everyday use, which isn't a common thing among traditional bank accounts. Whether you're earning cash back, getting ATM or foreign transaction fee reimbursements or avoiding overdraft fees, there's a lot to like.
However, Betterment Checking isn't for everyone. So it's important to take your time to consider multiple bank accounts to make sure you find the right one for you.
Ben Luthi
Ben Luthi is a personal finance and travel writer and credit card expert. He has a degree in finance from Brigham Young University and worked in financial planning, banking and auto finance before writing full-time for NerdWallet and Student Loan Hero. Ben is now a full-time freelance writer and enjoys traveling and spending time with his two kids. His work has appeared in several publications, including U.S. News & World Report, USA Today, Money, Success and Slickdeals.
