Emergency Savings Account (ESA)

The First Pillar of Financial Wellness

Emergency Savings Accounts
Insurance / Protection
Investment Retirement
Emergency Savings Accounts
Insurance / Protection
Investment Retirement

Save and earn more with 5.50% APY (variable)!*

now has a partnership with

So what does that mean for me?

Now you can manage your cash and investments on the same platform. Cash Reserve is a high-yield, low-risk account built for short-term savings—especially useful in a volatile market.

No Fees

  • No account fees, transaction fees, or maintenance costs—what you earn is what you keep.

No Minimum Balance

  • Some institutions only offer higher interest rates with large balances. With Cash Reserve, you can earn our APY with as little as $10.

Unlimited Withdrawals

  • Access money when you need it, and transfer cash with ease.

FDIC Insured up to $2M**

  • Cash Reserve is built for peace of mind. Now offering increased FDIC insurance up to $2 million (or $4 million for joint accounts) at our program banks—that’s 8x the standard amount!

An Emergency Savings Account is a financial strategy that involves setting aside a specific amount of money in a separate account, typically in a liquid form, such as a savings account, for unexpected expenses or financial emergencies. The purpose of emergency savings is to have a financial cushion in place that can help individuals avoid the negative consequences of unexpected expenses and events. Emergency savings are important for several reasons:

  • Setting up an ESA can provide individuals with peace of mind, knowing that they have a financial cushion to fall back on in the event of an emergency. 
  • ESAs can help individuals avoid the negative consequences of unexpected expenses, such as rent or mortgage payments, utilities, and groceries, until they are able to secure a new source of income.
  • ESAs can help individuals achieve their long-term financial goals. By having an ESA established, individuals are less likely to dip into their long-term savings, such as retirement accounts or investment portfolios.

We advise having 3-6 months of essential expenses in a safe, separate, liquid account. (3 months is the recommended minimum, and 6 months is the long-term goal.)

Examples of reasons to set up an Emergency Savings Account

* The annual percentage yield (“APY”) on the deposit balances in Betterment Cash Reserve (“Cash Reserve”) is 4.75% and represents the weighted average of the APY on deposit balances at the banks participating in Cash Reserve (the “Program Banks”) and is current as of 7/31/23. This APY is variable and subject to change daily. Deposit balances are not allocated equally among the participating Program Banks. A minimum deposit of $10 is required, but there is no minimum balance required to be maintained. The APY available to a customer may be lower if that customer designates a bank or banks as ineligible to receive deposits. APY applies only to Cash Reserve and does not apply to checking accounts held through Betterment Checking. Cash Reserve and Betterment Checking are separate offerings and are not linked accounts.

** Betterment Cash Reserve (“Cash Reserve”) is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients’ funds are deposited into one or more banks (“Program Banks”) where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.

Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. If you participate in Cash Reserve, you authorize Betterment, on a discretionary basis, to direct Betterment Securities as to the allocation of your funds among one or more Program Banks. Deposits at each Program Bank are insured by the FDIC up to $250,000 for each insurable capacity (e.g. individual or joint). In aggregate, funds deposited into Cash Reserve are eligible for up to $2,000,000 (or $4,000,000 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to eight Program Banks). Even if there are more than eight Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $2,000,000 (or $4,000,000 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. Although certain types of accounts, such as trust accounts may be eligible for additional FDIC insurance based on the number of beneficiaries, funds will be allocated to each Program Bank in such a way that provides up to $250,000 of FDIC insurance ($500,000 for joint accounts) per Program Bank. In the event you maintain an individual or joint Cash Reserve account and are a beneficiary of a Cash Reserve trust account, Betterment does not provide more than $250,000 of FDIC insurance per Deposit Bank ($500,000 for joint accounts) across client’s multiple Cash Reserve accounts. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC’s Form ADV Part 2.

The standard insurance amount of $250,000 per depositor, per insured bank, is provided by the FDIC and is subject to FDIC requirements.

This content from Betterment LLC is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. The information contained is intended for educational purposes only and is not meant to constitute investment or tax advice.

Advisory services provided by Betterment LLC, an SEC-registered investment adviser. Brokerage services provided to clients of Betterment LLC by Betterment Securities, an SEC-registered broker-dealer and member of FINRA/SIPC. Digital asset custody and trading services are provided by Gemini Trust Company, LLC, a New York trust company regulated by the New York State Department of Financial Services (NYDFS).

Investments in securities and digital assets: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities and digital assets involves risks, and there is always the potential of losing money when you invest in securities and digital assets.

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