Betterment dropped the rate on its fee-free, high-yield savings account less than 2 weeks after its debut

Betterment, the online investing adviser, slashed the interest rate on its high-yield savings account less than two weeks after its debut.

The Betterment Everyday Savings account now offers up to 2.44% APY if you join the waitlist for Betterment's checking account. Otherwise, the interest rate is 2.19%.

You need a minimum deposit of $10 to open a Betterment Everyday Savings account, which has no monthly fees, allows unlimited transfers, and offers FDIC insurance up to $1 million.

Robo-adviser Wealthfront also reduced its industry-leading APY by a quarter-percentage-point after the Federal Reserve cut its benchmark rate for the first time in a decade.

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Less than two weeks after debuting its high-yield savings account, Betterment has reduced the interest rate in response to the Federal Reserve cutting its benchmark rate by 0.25%.

Betterment's Everyday Savings account now earns an annual percentage rate (APY) of up to 2.44% on all balance tiers, down from 2.69% APY, with a minimum deposit of $10. The account has no monthly fees, allows unlimited transfers, and is FDIC insured up to $1 million.

To earn the 2.44% APY on Betterment's savings account, you need to join the waitlist for its checking account, which is set to become available later in 2019. The Betterment Everyday Checking account will have no maintenance or overdraft fees and no minimum balance. The account comes with a Visa debit card, and Betterment will reimburse all ATM fees for accountholders.

If you don't join the waitlist for a Betterment checking account, you'll earn 2.19% on your savings balance. Any savings account with an interest rate above 2% is worth consideration, especially if there are no fees and the account otherwise meets your preferences.

Robo-adviser Wealthfront also reduced it's industry-leading APY from 2.57% to 2.32% after the Fed announced it would cut the federal funds rate by 0.25% on July 31. Still, you need just $1 to open a Wealthfront Cash Account, which also allows unlimited transfers and offers FDIC insurance on up to $1 million.

As ever, it's important to keep in mind that interest rates are not set in stone. Rates are subject to change at any time at the behest of the Federal Reserve, so it's always a good idea to make sure the account is otherwise desirable before putting your money there.

Betterment's high-yield account has 2 unique features to help you save more

Betterment's Everyday Savings account comes with two unique features to automate savings: cash analysis and two-way sweep. After you link a checking account, you can use the cash analysis tool to identify “excess cash” to save, or money that exceeds about a month's worth of expenses in your checking.

When you activate the two-way sweep feature, Betterment will automatically transfer any excess cash from your checking account into your high-yield account, so long as your checking balance doesn't dip below the limit you set.

If you're still keeping your money for a rainy day in a regular savings account that earns 0.1% interest, you might consider moving it into a high-yield savings account. Most financial planners recommend storing money for emergencies and short-term goals in high-yield savings accounts because there's zero risk of losing money, it's easily accessible, and it grows while it's sitting there.

Betterment's only savings-like product up until now was Smart Saver. Technically a taxable investment account, Smart Saver is comprised of a two-fund bond portfolio with an expected annual yield of 2% to keep up with inflation. Bonds are relatively low risk compared to stocks, but the money is not insured like it would be in a savings account. Betterment has suggested using Smart Saver to invest cash you don't need readily available, particularly if you plan to put it into higher risk investments soon.

Learn more about the Betterment Everyday Savings account »

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