Betterment Launches "Two-Way Sweep" Offering to Provide Cash Optimization

Two-Way Sweep functionality moves cash in and out of linked account to manage payments, improve investment return rate

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Dec 04, 2018, 09:31 ET

NEW YORK, Dec. 4, 2018 /PRNewswire/ -- Betterment, the largest independent online financial advisor, today announced the launch of Two-Way Sweep, an advanced cash management and optimization tool. Building on Betterment's low-risk investment account Smart Saver, the new Two-Way Sweep tool provides added financial guidance through automated cash management. Two-Way Sweep is the next step in empowering Betterment customers to put their cash to work.

Powered by a cash analysis algorithm that scans for surplus funds in customers' linked checking account daily, Two-Way Sweep can automatically "sweep" excess money from customers' linked bank account into a Smart Saver account for ultimate cash optimization. Simultaneously, the algorithm maintains a buffer in the linked checking account for regular spending (roughly a month's worth of expenses), and will automatically move money back from Smart Saver to customers' linked accounts if the balance runs low. Smart Saver, launched in August, relies on low-risk bonds that can help Betterment customers earn a yield that could be 20 times higher return rate than what customers make on cash sitting idly in a typical savings account.

"Nearly 30% of our customers hold too much cash in their bank accounts, with almost $20,000 in excess on average, where it earns little, if any, interest," said Jon Stein, Founder and CEO of Betterment. "The earning potential of investing in a low-risk investment fund vs. holding onto cash should be a no-brainer, but we also understand customers want the comfort of having extra cash to pay for expenses or unexpected bills. Through Two-Way Sweep, we're one step closer to achieving our goal to help customers make the most of their money, while ensuring they feel confident about their financial situation."

"We always believed there should be an automated way to make more of idle cash, not only telling you how much money should go into what accounts and towards what bills, but actually performing the task without you even having to move a finger," said Mike Reust, CTO of Betterment. "With the launch of Two-Way Sweep, we're showcasing that automation can help make nuanced day-to-day decisions easy and stress-free so people can focus on their broader financial goals."

Smart Saver customers will have the choice to turn cash analysis on, and can also enable the automated sweep functionality or choose to manually move money between Smart Saver and their linked cash accounts. At launch, Two-Way Sweep will be available to select customers who use Smart Saver. Learn more here.

Two-Way Sweep is the latest addition in a line of offerings that are tailored to Betterment customers' unique financial circumstances. Most recently, the company launched a series of financial advice planning packages to help guide investors through major life events, such as college tuition saving, marriage and retirement planning.

For more information, please visit Betterment.com.

Contact Info:

Joe Ziemer, [email protected], 212-228-1328

Arielle Sobel, [email protected], 212-228-1328

Danielle Shechtman, [email protected], 212-228-1328

ABOUT BETTERMENT

Betterment is the largest independent online financial advisor with more than $15 billion in assets under management. The service is designed to help increase customers' long-term returns and lower taxes for retirement planning, building wealth, and other financial goals. Betterment takes advanced investment strategies and uses technology to deliver them to more than 400,000 customers across its three business lines: direct-to-consumer, Betterment for Advisors, and Betterment for Business. Learn more.

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Determination of largest independent robo-advisor reflects Betterment LLC's distinction of having highest number of assets under management, based on Betterment's review of assets self-reported in the SEC's Form ADV, across Betterment's survey of independent robo-advisor investing services as of August 20, 2018. As used here, "independent" means that a robo-advisor has no affiliation with the financial products it recommends to its clients. If you also have a 401(k) account through Betterment For Business, that account is subject to a separate fee schedule and is not included in your balance for determining eligibility for the fee tiers or subject to the fee cap mentioned above.

SOURCE Betterment