My Money Blog

Updated rates. SaveBetter is a financial marketplace that allows you to access high-interest certificates of deposit and savings accounts from multiple different banks and credit unions without having to open up a new account at each one. Every participation institution is either FDIC-insured or NCUA-insured. The participating banks, product terms, and interest rates change regularly. Here are the top SaveBetter offers as of 3/2/2023:

• 12-month CD at 5.01% APY from Western Alliance Bank via SaveBetter. Minimum opening deposit is $1. Early withdrawal penalty is 270 days of simple interest.
• 17-month CD at 5.00% APY from Bellco Credit Union via SaveBetter. Minimum opening deposit is $1. Early withdrawal penalty is 270 days of simple interest.
• 12-month No Penalty CD at 4.60% APY from FVC Bank via SaveBetter. Minimum opening deposit is $1. No early withdrawal penalty. Withdrawals may be made 30 days after opening.
• Liquid High Yield Savings at 4.75% APY from Western Alliance Bank via SaveBetter. Minimum opening deposit is $1. No limit on number of transactions.
• Liquid High Yield Savings at 4.60% APY from Patriot Bank, N.A. via SaveBetter. Minimum opening deposit is $1. No limit on number of transactions.
• Liquid High Yield Money Market Deposit Account at 4.50% APY from Atlantic Federal Credit Union via SaveBetter. Minimum opening deposit is $1. No limit on number of transactions.

Background on SaveBetter. SaveBetter is a fintech website that serves as a marketplace for partner banks and credit unions looking to promote their deposit products. They offer liquid savings account, No-Penalty CDs, and High-Yield traditional CDs. Funds are held in a custodial account at the bank or credit union that is providing your selected savings product(s). The banks are all FDIC-insured and the credit unions are all NCUA-insured. SaveBetter charges zero fees to consumers, and is paid by the partner banks. SaveBetter is a subsidiary of Raisin GmbH, a German financial company. (They have a European version of SaveBetter as well.)

The benefit for the consumer is that you can easily access promotional rates at a new bank or credit union without having to open yet another new account (and endure identify verification hurdles, join partner organizations, open share savings accounts, etc). You can just go through SaveBetter and be done in a few clicks. This makes is easier to chase higher savings accounts and CD rates. You must link an external bank account and fund electronically.

A drawback is that you do not get direct access to your SaveBetter sub-accounts via routing number and account number. You must go through the SaveBetter site to open accounts, make deposits, and make withdrawals. Here a simple illustration I made that helps me visualize this setup:

More details:

5. What is a custodial account and how does it work?
Custodial accounts are involved in how SaveBetter directs the money transfers from customers to the banks and credit unions holding their savings. When a customer makes a deposit through their SaveBetter account into a savings product offered by a given financial institution, the funds move from the customer’s external bank account (also referred to as the reference account) to an omnibus custodial account held by Lewis and Clark Bank (functioning in the role as a custodian bank) at the financial institution offering the savings product.

6. How does pass-through deposit insurance work?
Although SaveBetter customers’ deposits are pooled in omnibus accounts, there is no impact on the eligible deposit insurance coverage you receive from the financial institution holding your savings. This is because the government entities providing federal deposit insurance — the FDIC for banks and NCUA for credit unions — permit pass-through coverage. So your money that’s pooled in a custodial account still has the coverage it would have were it held in an individual account in your name.

I suspect this setup is a lower cost structure for the banks as well, which in turn allows higher interest rates.

Up to $125 Referral bonus. Many of their minimum deposits are below $1,000. But if you are new to SaveBetter and plan to deposit at least $5,000, you can open via a referral link and entering my personal referral code jonathanp31786. You must deposit $5,000 for 90 days to earn $25, and then additional $5 for every subsequent $5,000 deposit past that, up to a max of $125 bonus. Here’s the fine print:

Making $125 has never been so easy or rewarding. Simply enter in the code you received from your friend or family member when you sign up for an account with Savebetter. Once you fund your account and maintain an initial balance of $5,000 or more for 90 days, you will earn a minimum bonus of $25 and a maximum bonus of $125 depending on the account balance you maintained after 90 days. The bonus will be paid out within 30 days of qualification. Funds will be deposited into your external bank account linked to Savebetter.