Way back in 2003, I had switched my “brick and mortar” savings account to online with ING Direct. I thought I was pretty progressive back then to do it and I’m so glad I did. I still have that original account, although a couple of years ago ING was bought by Capital One and “Capital One 360” was born.
It was almost exactly one year ago that a friend told me about Betterment (referral link) and I opened an account shortly thereafter. I started by moving just a portion of my CO 360 account ($3,000) to Betterment so I could give it a test drive. The cool about the site is how simple they make investing. I just set the dial to 60% stocks and 40% bonds and they did the rest. As you’ll see, I’m invested mostly in Vanguard funds.
You might also notice that I have more than my original deposit in there; about six months in, I was feeling more comfortable with the account risk and transferred more of my savings.
My thought was that as long as I beat my meager interest rate of less than 1% from Capital One 360, I would be satisfied with Betterment. It did just that over the course of 2014 and I’m current at a 3% return – more than triple what I would’ve had! I think that’s pretty good for a short-term savings account. I also bumped up my risk to 65% stocks and 35% bonds.
I’m now considering whether I should move my remaining savings into Betterment. Hmmmm. More to come on that.
Up next: Capital One 360 savings account!