Three ways to get the most out of your Cash Reserve account
Let's take your cash game to the next level. Here are three tips to help manage your Cash Reserve account for long-term success.
By
Betterment Editors
Published
Three ways to get the most out of your Cash Reserve account Sep 12, 2023 11:03:28 AM Let's take your cash game to the next level. Here are three tips to help manage your Cash Reserve account for long-term success. You're smart. You already have a Cash Reserve account (or you want one!). And you know the value of a high-yield account with FDIC insurance up to $2 million through our program banks†. Let's take your cash game to the next level. Why it matters: A Cash Reserve account is a place to grow your savings and secure your money during volatile times. But we also give you tools and tips to make the most of your cash, whether that’s saving for a goal or using cash to eventually invest in stocks and bonds. Here are three simple ways to level up your cash skills: #1 Have multiple goals and use the goal forecaster: You can have more than one Cash Reserve account to track your savings for different purchases or needs. To set up a new Cash Reserve account: Select “New cash goal” when you are opening a Cash Reserve account. You’ll be able to name your goal and set a target amount and target date to track your progress. To use the goal forecaster: On a desktop device, navigate to your cash goal account and click the “Open goal forecaster” button. You can enter different scenarios for a recurring deposit, a one-time deposit, and a target date. Our projection graph will show you the estimated chance of reaching your goal for each scenario you enter. #2 Pay yourself first with a consistent recurring deposit from your external account: The easiest way to pay yourself first is to automate it, saving you time while increasing your savings. Why use a recurring deposit to save? Think of the amount you save monthly just like a mandatory expense, no different than a phone bill or a mortgage payment. Each month, you can automatically send money from your external checking or savings account to your Cash Reserve account getting you one step closer to reaching your goal. How do you do it? In your Betterment account, click the Deposit button, select your “to” and “from” accounts, and adjust the frequency to meet your needs. #3 Balance short-term liquidity and long-term growth: Your Cash Reserve account is liquid, meaning it’s easy to access your cash. But it’s important to strike the right balance between cash for short-term needs and investments for long-term growth. Do you have an emergency fund? If you have already saved three to six months of living expenses then you should take a look at your extra cash. If you don’t have other short-term savings goals, investing in stocks and bonds may help to grow your money over time. Are your goals short-term or long-term? A Cash Reserve account may help you achieve short-term goals since you need the money soon and don’t want to lose it if stocks fall. But for goals longer than 12 months, consider stock and bond investing. While investing involves more risk, historically, stocks have had greater long-term gains than cash. Similar to a Cash Reserve goal, you can select an investing goal and we’ll recommend a portfolio to match your target date.
You're smart. You already have a Cash Reserve account (or you want one!). And you know the value of a high-yield account with FDIC insurance up to $2 million through our program banks†. Let's take your cash game to the next level.
Why it matters: A Cash Reserve account is a place to grow your savings and secure your money during volatile times. But we also give you tools and tips to make the most of your cash, whether that’s saving for a goal or using cash to eventually invest in stocks and bonds.
Here are three simple ways to level up your cash skills:
#1 Have multiple goals and use the goal forecaster: You can have more than one Cash Reserve account to track your savings for different purchases or needs.
- To set up a new Cash Reserve account: Select “New cash goal” when you are opening a Cash Reserve account. You’ll be able to name your goal and set a target amount and target date to track your progress.
- To use the goal forecaster: On a desktop device, navigate to your cash goal account and click the “Open goal forecaster” button. You can enter different scenarios for a recurring deposit, a one-time deposit, and a target date. Our projection graph will show you the estimated chance of reaching your goal for each scenario you enter.
#2 Pay yourself first with a consistent recurring deposit from your external account: The easiest way to pay yourself first is to automate it, saving you time while increasing your savings.
- Why use a recurring deposit to save? Think of the amount you save monthly just like a mandatory expense, no different than a phone bill or a mortgage payment. Each month, you can automatically send money from your external checking or savings account to your Cash Reserve account getting you one step closer to reaching your goal.
- How do you do it? In your Betterment account, click the Deposit button, select your “to” and “from” accounts, and adjust the frequency to meet your needs.
#3 Balance short-term liquidity and long-term growth: Your Cash Reserve account is liquid, meaning it’s easy to access your cash. But it’s important to strike the right balance between cash for short-term needs and investments for long-term growth.
- Do you have an emergency fund? If you have already saved three to six months of living expenses then you should take a look at your extra cash. If you don’t have other short-term savings goals, investing in stocks and bonds may help to grow your money over time.
- Are your goals short-term or long-term? A Cash Reserve account may help you achieve short-term goals since you need the money soon and don’t want to lose it if stocks fall. But for goals longer than 12 months, consider stock and bond investing. While investing involves more risk, historically, stocks have had greater long-term gains than cash. Similar to a Cash Reserve goal, you can select an investing goal and we’ll recommend a portfolio to match your target date.