Short Article

Betterment Checking vs. Cash reserve: Which is more  beneficial 

What is a Cash Reserve? 

For emergency purposes, a cash reserve is formed. You can use it to clear away short-term, unimagined financial needs. Instead of taking a loan from a bank and make it harder for you to pay it back because of all the interests and equity, you can for pay these small needs from your cash reserve. Most oftenly, a business bank account is perfect for you to save your cash reserve in. 

How it works 

To open a cash reserve, initiate a new bank account. Your cash reserve should not be like your daily usage account, or any other in that case 

While setting up a cash reserve account, make sure that these things are not being affected seriously 

➔ Cash flow statement

 ➔ Budget and projected cash flow 

A Cash reserve can be a life-saver for you in some situations 

Summary 

● Cash reserve is handy for unplanned situations 

● As much cash you can handle, can be put in there 

● It’s account should be different from your daily usage account 

● You have to take care of two things while making a cash reserve account 

● And finally, business bank accounts are perfect for it. 

What is Betterment checking? 

It is quite a jump for online managers. It is basically a robo-advisor which makes a checking account accessible to the market WITHOUT operating as a bank.  

How it works 

Betterment Checking does not have a minimum balance requirements to initiate an account. Furthermore, monthly maintenance fees is also not present. If enough money is not present in the debit card, it will simply be declined 

One Betterment manager said that “People are not happy with paying the banks for their money that’s why their company took this step”.  

Pros 

It’s biggest plus is the small fees on the account, and interest is also very low on savings. It’s features that it offers for investment are extremely good. With some great portfolio options at low cost, Betterment is a great investment tool. 

Comparison 

● The checking account is still not perfect, while the Cash reserve account is completely functional and can be started any time now.  

● Savings accounts have more interest compared to Betterment checking accounts. 

● Betterment checking is done without a bank while Cash reserve is done with a bank ● Cash reserve usage probabilities are very less compared to Betterment checking. 

Suggestions 

I personally suggest that you should use a Cash Reserve instead of Betterment checking. There are many reasons including the still-not-complete functioning of Betterment Checking and it’s “zero fees” promise is nothing more than the other banks and companies are also offering.

 Whereas, if ever you are in trouble or/and see that any sort of trouble also may be coming in future, Cash Reserve is perfect for it, and will save you from the trouble in return for little interest only