Smart Saver is our low-risk investing solution for your extra cash. This is money that you might have sitting in a checking account or low-yield savings account. It’s always there, rarely used, and actively losing value due to inflation. In the background, it’s part of your legal taxable savings account.
Betterment’s Smart Saver aims to earn income similar to a savings account; however, rather than putting your money in a bank that returns interest by loaning your money out, Betterment puts your cash in an low risk portfolio that yields income through bonds.
More specifically, we invest your unused cash in the 100% Bond, 0% Stock Betterment Portfolio Strategy, which consists of:
- 80% short-term U.S. Treasuries (SHV)
- 20% short-term investment-grade bonds (NEAR)
By combining multiple low-risk assets, we help you seek higher expected returns, while keeping your risk low.
At this time, you can only have one Smart Saver within your retail Betterment account and cannot extend it to a joint or trust account. Also, please note that Smart Saver is not part of your Betterment 401(k) plan, and requires that you set up a Betterment retail account if you have not done so.
We encourage you to review our methodology to ensure you fully understand how Smart Saver works.