Betterment is finally opening its entire suite of cash management tools to clients after months of development.
Betterment Checking, a product that offers a contactless debit card, FDIC insurance of up to $250,000 and no overdraft or ATM fees, had a rather long wait list when it launched as the firm worked the product through beta development, according to a Betterment spokesperson.
“We have been rolling people off the waitlist since July in tranches … but we depleted the waitlist and made the product available to everyone,” said Betterment spokesperson Danielle Shechtman. “Ultimately, we believe that managing our customers’ everyday cash is essential to realizing their long-term goals.”
Initially, Betterment only officially made the Cash Reserve product — a high-yield savings account that offered eye-popping yields of more than 2% when it launched — available to clients. Since Betterment does not hold a banking charter to offer banking products, the firm partnered with the National Bank of Kansas City, one of dozens of banks nationwide that fintechs have chosen to affiliate with to offer new products.
Betterment said its average client is 37 years old and has an account balance of roughly $40,000.
Cash management suddenly became one of the hottest trends in financial technology last year. Banking tools attracted billions of dollars in assets to robos, and none have been more successful than the accounts that have helped Betterment, along with similar products offered by its competitor Wealthfront, catapult both firms’ assets over the $20 billion mark.
Betterment said its assets topped $22 billion in March, due at least partly to its addition of cash management tools. The economic turmoil stemming from COVID-19, however, has stemmed some of that initial success. Wealthfront has said that it doubled its assets last year and pulled in more than $1 billion in the first month after it launched its high-yield savings account.