Roboadvisor Betterment Introduces Banking Features
It looks like another FinTech firm is expanding into the world of traditional banking services. In a press release roboadvisor Betterment announced the launch of new savings and checking accounts. First up a waitlist for the Betterment Everyday Checking account is now open. These accounts will carry no overdraft fees or monthly maintenance fees and will also have no minimum balance requirements. Plus Betterment will reimburse all ATM fees worldwide with their Betterment Visa Debit Card. The checking accounts are expected to roll out later this year, with those on the waitlist gaining early access.
In the meantime the Betterment Everyday Savings account is now available and replaces the company’s Smart Saver, which was a low-risk investment product. The new account’s key feature is an impressive 2.69% APY that the platform calls “industry-leading.” However, according to Betterment’s FAQ site, the 2.69% APY is a promotional rate available to those who join the waitlist for their Everyday Checking offering and will only be available through 2019. The current APY without this promotion is 2.43%. Everyday Savings accounts do not have any minimum balance requires or withdrawal limits and are available to all customers.
Announcing the new accounts, Betterment CEO Jon Stein first explained, “The biggest challenge for Americans when it comes to their money is saving for the future, and unfortunately a majority of the traditional banks they depend on charge extra fees, encourage cash-holding and upsell unnecessary products. Right now, it’s nearly impossible to find a banking solution that has its customers’ best interests at heart.” Stein went on to say, “Betterment Everyday is the solution to the longstanding industry problem. No matter where you are in your financial journey, Betterment lays the path for smart investing and now secure saving everyday.”
Interestingly Betterment’s announcement comes after fellow roboadvisor platform Wealthfront also added banking features to their product lineup. Wealthfront has also made a point of highlighting their APY, which they just recently raised to 2.57%. With Betterment now besting that figure (if the promotional rate is considered), it wouldn’t be surprising if Wealthfront responded in the coming days and weeks. Elsewhere yet another FinTech, SoFi, offers a hybrid banking account of its own dubbed SoFi Money.
Like other challenger banking offerings, Betterment is partnering with various banks for their new accounts. For example their Betterment Everday Checking and Betterment Visa Debit Cards will be provided by and issued by NBKC Bank of Overland Park, Kansas. As a result checking funds will be FDIC insured up to $250,000 per accountholder. As for savings accounts, Betterment will be partnering with four banks, meaning that funds will be FDIC insured up to $1 million.
These days there is certainly no shortage of online banking options for those who want to earn more on their savings while avoiding many of the fees associated with brick-and-mortar institutions. Still Betterment’s new accounts do stand out, mostly thanks to the 2.69% APY promotion they’re currently offering. With Wealthfront, SoFi, and perhaps eventually Robinhood also pushing their banking alternatives, now is a great time for consumers to explore their options.