Betterment launches checking account for shared finances

Betterment is expanding the banking side of its business by launching a joint checking account to complement its checking feature for individuals.

The motivation to build Joint Checking was simple.

“It was by and far the most demanded feature by our existing customers,” said Mike Reust, president of retail at Betterment.

With this new feature, Betterment joins the ranks of fintechs that help couples, both traditional and nontraditional, manage shared finances. Zeta and Honeyfi are two that specialize in the challenges of sharing money. All of these let married couples, roommates and siblings contribute to accounts, bills and expenses.

Banks have offered joint checking accounts for years. Fintechs add money management tools for shared finances like automated saving into shared "buckets" and split-bill payment.

Reust points out that many couples like to divide their money into three buckets, where each maintains an individual account on top of their joint accounts. Betterment’s Cash Reserve account also has individual and joint versions.

“Part of our target customers are millennial couples,” said Reust. “We’ve already done a lot to that end on the investing side, retirement planning side and even the saving side, so checking is the one hole we’ve now filled.”

The joint account is similar to the individual Betterment Checking account that launched last April. There are no minimum balance requirements or overdraft fees, and all ATM or foreign exchange fees are automatically reimbursed. Customers can use the same contactless debit card for their individual and joint accounts, and earn cash back rewards, typically of 1% to 3%, for shopping at retailers such as Walmart and Sam’s Club.

Reust declined to share how many checking customers Betterment currently has, but said the majority of checking customers also use other Betterment products, particularly with investing. The company has 500,000 customers all told.

Betterment, which launched in 2010 as a robo-adviser, provides automated investment portfolios, individual retirement accounts and 401(k) plans, and has been gradually expanding its product set to match traditional banks’. The next step for Betterment on the banking side is to incorporate more advice and insights for customers around their spending and savings behavior — perhaps in a similar vein to the robo advice Betterment is known for with investing.

“There’s not a precise product we’ll be launching yet, but we’ll be doing a lot of work on that front,” said Reust.

For Joint Checking, deposits of up to $500,000 will be held by nbkc bank, a $1.1 billion-asset institution in Overland Park, Kan.