- Let's be honest.
Wealthfront started what is about to unfold
when they created that savings account that offers 2.57 APY.
Betterment has fired back
by offering the highest interest savings account
that's out there right now.
Their new account is called
Betterment Everyday savings and checking.
Hey, I'm Jarrad and on this channel,
we like to talk about
all things personal finance and investing.
Please Hulk smash that thumbs up button
for higher interest savings accounts
which means more money for you and I.
As you watch this video,
let me know your thoughts on this savings account
down in the comments below
and let me know if you're actually going to open up
one of these Betterment Everyday savings accounts.
In this video, I'm not gonna be touching
on the investing side of Betterment's business,
only the new Everyday savings and checking account.
Let's get into the details to figure out
what in the world this whole thing is about
and see what Betterment is offering
so we can kind of decide whether it's worth it.
Just in case you didn't know,
Betterment and Wealthfront are two of the biggest
and most well-known robo-advisors that are out there.
But up until this point,
they've only really offered investment options,
unless of course you count Betterment Smart Saver account
which they were essentially marketing it
as a savings account alternative.
All it was was an account
where they put your money into bonds.
It was pretty lame
and not worth putting your money into at all.
Since this news broke, it actually looks like
they're not offering that any longer
because the Smart Saver page now redirects you
to the Everyday savings and checking account page.
Although they were both founded in 2008,
Betterment has around $16.4 billion
in assets under management
and Wealthfront only has $11.4 billion.
Holy smokes!
That is a lot of money.
And $5 billion is a big, big difference
but that doesn't always mean that it's better.
I gotta give it to Betterment
because they are doing their best to stay in the game.
With their number one competitor, Wealthfront,
who is now offering a 2.57% APY cash account,
I have a feeling that Betterment
started to see a big dip in their signups
and probably also saw a lot of people
pulling their cash out of their accounts
or they're just trying to make sure
that they're staying on top by getting ahead
of what could turn into a really, really messy situation
if they did not respond to Wealthfront.
Meanwhile, Ally Bank is still kind of scratching their head,
trying to figure out oh, what the heck is going on?
They're falling way behind.
They used to be the top player
in the high interest saving account space
but while they were sitting on the sideline,
picking their noses and eating their boogers,
Wealthfront and Betterment decided it was time
to graduate to a whole new level.
I think that going forward,
we're gonna see a lot of these companies
trying to one-up each other on a regular basis.
They all wanna gain as much market share
as they possibly can.
Now, since the robo-advisor industry is still pretty new,
the faster and earlier
that they can establish themselves, the better.
The good thing for you and I
is that while these big companies are battling it out,
we actually win since we benefit
from them constantly flicking boogers at each other
to gain more market share.
What's more interesting to me about this whole thing
is how these new, young, kinda techie investment companies
are changing the game completely.
You've got my favorite investing platform M1 Finance
who lets you buy partial shares of stocks and ETS for free.
Link to open up an account is in the description.
You've got Robinhood
who offers a very, very user-friendly way
to trade stocks, options, ETFs, and cryptocurrencies.
Robinhood actually did try
to enter the whole high interest savings account game
by creating one of their own but they failed miserably.
It was kind of sad to watch the car crash in slow motion
but I am sure that they'll be the next ones
to come out with one of these accounts.
You were even seeing some of the OGs in the game
like Fidelity creating zero expense index funds
and Vanguard who is lowering the expense ratios
of some of their most popular index funds left and right.
Then you have Betterment and Wealthfront
who have been charging a small fee
to invest your money based on your risk tolerance
and the future financial rules that you have,
a very hands-off experience.
By far, the best part about
Betterment's Everyday savings account
is that they're offering 2.69% APY on your money.
This is 0.15% higher than Wealthfront's 2.57%
and actually 0.59% higher than Ally's 2.1% APY.
To get this 2.69% offered by Betterment,
you'll have to create an account to get on the waiting list
for the Everyday checking account
that they will be releasing soon.
Now, I already have an account so it was pretty easy
to kinda get on the waiting list
and get that automatic 2.69% savings account
and open it up pretty quickly.
If you decide that you don't wanna get on the waiting list
for the checking account,
then you'll still earn 2.43% which isn't too bad
but after you watch this video,
you should probably go create an account anyways
just to have it there for yourself if you want it later.
The Betterment Everyday savings account
is FDI-insured up to $1 million
and the Everyday checking account
is gonna be FDIC-insured up to $250,000.
If you didn't catch that a few seconds ago,
yes, you heard me right when I said that Betterment
is offering a checking account as well.
Like I said, you'll need to get on the waiting list
for this Everyday checking
but it's not a lot of extra steps to do it.
With this checking account,
you'll also receive a Visa debit card.
With this Visa debit card,
you'll have all of your ATM fees reimbursed worldwide.
There is no account fees, no overdraft fees,
or no minimum balance on this checking account either.
One thing to note here is that Betterment
will not charge you any foreign transaction fees
if you use it outside of the United States
but Visa will still charge you a 1% foreign transaction fee
that will not be reimbursed by Betterment.
If you aren't someone who travels overseas a lot,
then this really shouldn't matter
to the vast majority of you.
Overall, I think this is a pretty good deal.
When Wealthfront increased their APY to 2.57%,
I moved my money personally from Ally to them
but I'm probably not gonna move my money
from Wealthfront to Betterment at this point in time.
It's only an extra .12% increase which is good,
I agree, it's absolutely good,
but I just don't feel like going through
the whole process right now.
If you still have your money with a bank like Ally
or any other bank with a lower interest rate
in the savings account, then absolutely move your money
to the Betterment Everyday savings account.
I've got links in the description
for more personal finance and investing resources for you.
Let me know down in the comments
if this account sounds appealing to you or not
and let me know if you're actually thinking about
moving your money to this Betterment account.
Don't forget to Hulk smash that thumbs up button
and hit that subscribe button as well
if you want more personal finance
and investing videos just like this one.
I'll see you in the next one, friends.
Adios!