Raisin vs. Betterment: Which platform offers better cash savings options?

If you're looking to grow your cash savings, chances are you've heard of Raisin and Betterment. While both platforms offer users access to high-yield savings accounts and a suite of tools to grow their cash, they go about it in different ways.

Betterment is known primarily for its robo-advisor and broader range of services, while Raisin focuses exclusively on offering savings products through a marketplace that includes both banks and credit unions.

Before you make any decisions, let's take a closer look at Betterment vs. Raisin, particularly comparing Betterment's Cash Reserve feature with the savings options available through Raisin.

Raisin is a savings marketplace that connects users with a variety of banks and credit unions offering high-yield savings products. The platform is designed to help users maximize returns on their savings by offering access to competitive rates across different institutions. One of Raisin's standout features is the ability to pick specific banks or credit unions into which to deposit funds. This gives the user a greater sense of control and transparency.

Raisin’s partners offer several types of savings products, including:

High-yield savings accounts (HYSAs)

Money market deposit accounts (MMDAs)

High-yield certificates of deposit (HYCDs)

No-penalty CDs (NPCDs)

Each of these accounts offers its own benefits and drawbacks, but Raisin allows you to choose between fixed or variable-rate products, depending on your financial goals.

Betterment, on the other hand, is a well-known robo-advisor with a broad range of services, including automated investing, retirement planning, and financial advice. For the purpose of this comparison, we’ll be looking primarily at Betterment’s Cash Reserve feature.

Betterment Cash Reserve is a high-yield cash account that offers users the opportunity to earn interest on their savings while maintaining full liquidity. This account is part of Betterment's suite of cash management services.

• Raisin: One of the most compelling aspects of Raisin's platform is the diversity of savings products available. With access to multiple banks and credit unions, you can choose between high-yield savings accounts, money market deposit accounts, high-yield CDs, and no-penalty CDs. This range allows users to select a range of accounts across an exclusive network of banks and credit unions to best fit their financial strategy. For example, a customer can store funds they need in the near-term, like paying monthly bills, in a HYSA or MMDA while locking in guaranteed returns on funds for longer-term goals, like retirement or buying a house, with a high-yield CD or no-penalty CD.
• Betterment: Betterment Cash Reserve offers a variable interest rate, which means the rate can fluctuate over time. This is typical of most high-yield savings accounts but differs from the fixed-rate products offered on the Raisin platform. While Betterment's product may be more straightforward, it lacks the selection that Raisin provides, particularly if you're looking for a CD or a product with a fixed interest rate.

Bottom Line: If having a variety of product choices, including fixed-rate savings options, is important to you, Raisin clearly has the edge.

• Raisin and Betterment Cash Reserve: Both options boast $0 fees for their respective savings products. This makes both platforms attractive options for users looking to maximize returns without worrying about monthly maintenance fees or account charges eating into their interest.

Bottom Line: It's a tie when it comes to fees, as both Raisin and Betterment Cash Reserve charge nothing for their services.

• Raisin: The liquidity of your funds will depend on the type of savings product you choose. For instance, HYSAs and MMDAs offer unlimited withdrawals, meaning you can access your money at any time. However, HYCDs and NPCDs come with restrictions on early withdrawals — both have fixed terms. Typically, accessing funds in HYCDs prior to maturity may result in penalties. NPCDs generally have no penalty fees, but early access requires making a complete withdrawal.
• Betterment: Betterment Cash Reserve offers unlimited withdrawals with no penalties or restrictions, making it ideal for individuals who need full liquidity. You can transfer funds to your linked checking account as needed without worrying about losing interest or facing withdrawal penalties.

Bottom Line: Betterment Cash Reserve is more liquid than some of the fixed-rate products offered through Raisin. However, HYSAs and MMDAs on Raisin offer similar liquidity.

• Raisin and Betterment Cash Reserve: Interest rates on both platforms vary depending on the product and current market conditions. Generally, fixed-rate CDs on Raisin tend to offer higher rates than variable-rate products like Betterment's Cash Reserve. This is because CDs lock in your rate for the entire term, providing certainty in your returns. HYSAs and MMDAs on the Raisin platform typically offer interest rates near the top of the market, however may fluctuate over time. Similarly, Betterment's variable-rate account may also fluctuate, making it similar to other HYSAs.

Bottom Line: If you're looking for higher, guaranteed returns, Raisin's fixed-rate CDs may offer better opportunities. If you prefer more flexibility with your cash while still earning interest, comparing rates between savings accounts on Raisin with Betterment Cash Reserve may be a good choice.

• Raisin and Betterment Cash Reserve: Neither platform imposes a minimum balance requirement on their accounts, so you can start saving without worrying about meeting a specific deposit threshold.

Bottom Line: It's a tie again, as both platforms make it easy to get started with no minimum balance requirement.

When deciding between Betterment or Raisin, it ultimately comes down to what you value most in a cash savings product:

• If you want greater control over where your money goes or prefer the guaranteed returns of fixed-rate products, Raisin is likely the better option for you.
• If you’re looking for services beyond dedicated cash savings, then you may want to consider Betterment Cash Reserve.

Ultimately, both platforms offer solid, fee-free savings opportunities with no minimum balance. However, if you want to diversify your savings products and spread out your deposits across more financial institutions, Raisin's marketplace may offer more value.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.