Betterment
Courtesy of Betterment

Betterment is no longer just a robo-adviser.

The online financial adviser is expanding to offer you a better yield than you’re earning with a traditional bank account.

Betterment on Tuesday unveiled Everyday Savings, which offers up to 2.69 percent annual percentage yield (APY). The account requires a $10 minimum deposit to open but no minimum balance.

To get the top APY, you must also sign up for the waitlist for Betterment Everyday Checking, which is scheduled to be released later this year.

Betterment Everyday Savings insures funds up to $1 million through its partner banks, though the money will be uninsured while being transferred to those institutions.

Betterment Everyday Savings details

The 2.69 percent APY on Betterment’s cash management account is higher than yields on top savings accounts and is nearly 27 times the national average APY on savings accounts (0.1 percent). It also tops Wealthfront’s cash management account, which offers 2.57 percent APY.

However, if you don’t sign up for the Betterment Everyday Checking waitlist, you will earn 2.43 percent APY.

The Everyday Savings requires a $10 minimum deposit but doesn’t have a minimum balance requirement.

The account has no restriction on the number of withdrawals or transfers you can make each month. This separates it from typical savings accounts and money market accounts, which limit such transactions to six per statement cycle.

The Everyday Savings doesn’t have an ATM or debit card available to withdraw from ATMs. However, the Betterment Everyday Checking will have a Betterment Visa debit card when it launches, according to a company statement. The Betterment Everyday Checking won’t have monthly maintenance fees, account fees, overdraft fees or a minimum balance requirement.

The Everyday Savings doesn’t have an early closeout fee, and there is no minimum amount of time that you need to keep it open.

How the account is insured: What to watch for

The product has savings in its name, but it doesn’t work the same as a typical savings account or money market account, particularly with how the funds are insured.

Savings and money market accounts that are insured at an FDIC-insured bank or a credit union regulated by the National Credit Union Administration and insured by the National Credit Union Share Insurance Fund are backed by the full faith and credit of the U.S. government.

The Betterment Everyday Savings, meanwhile, is a cash management program that works with program banks. The account is insured up to $1 million through those program banks.

Deposits made from a linked checking account reach the program banks one to two business days after they’re initiated, according to Betterment. Deposits at Betterment aren’t covered by the Securities Investor Protection Corporation (SIPC).

Program banks for the Everyday Savings are Citi, Barclays, Valley National Bank, Seaside National Bank & Trust and Georgia Banking Co. The program bank for the Everyday Checking will be NBKC. If you open the Betterment account and have money deposited at one of these institutions, you could exceed FDIC limits. Keep track of the program banks because the deposit bank list may change.

The account’s terms and conditions note that it is meant for you to earn interest on cash you intend to use to buy securities with through Betterment and isn’t meant to be a long-term investment option.

Other institutions offering high yields

The Everyday Savings provides another option for savers searching for high yields.

There are also some FDIC-insured savings accounts and money market accounts that offer yields above 2.5 percent:

  • Northpointe Bank: Its Ultimate Savings account pays 2.55 percent APY on balances between $25,000 and $1 million. The APY is guaranteed for at least three months from the date the account is opened.
  • Vio Bank: Its high-yield online savings account pays 2.52 percent APY on all balances. There is a $100 minimum to open this account.
  • Salem Five Direct: The eOne savings pays 2.51 percent APY on balances from 1 cent up to $1 million. There is a $100 minimum deposit requirement to open the account.
  • CFG Community Bank: The CFG high-yield money market has a 2.5 percent APY on balances of $25,000 or more.