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. 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 FDIC insurance based on your status as a beneficiary.
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 for individual accounts, $500,000 of FDIC insurance for joint accounts, and $250,000 of FDIC insurance for trust and other corporate account types, in each case per Program Bank. 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. 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). 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). Deposits at each Program Bank are insured by the FDIC up to $250,000 for each insurable capacity (e.g. 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. See Betterment Client Agreements for further details. 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. Cash Reserve should not be viewed as a long-term investment option.įunds held in your brokerage accounts are not FDIC-insured but are protected by SIPC. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. 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. Neither Betterment LLC nor any of its affiliates is a bank. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. †Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC.
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