Investing inherently carries some level of risk. At Betterment, we believe that risk should arise from market fluctuations, not from the platforms facilitating your investments. Therefore, we have implemented a variety of security measures designed to protect your account and investments, allowing you to focus on growing your savings without worry.
This article explores the key strategies we employ to enhance the safety of your Betterment account and your investments.
With a focus on both account protection and investment security, you can gain insight into how we work to keep your assets secure.
Table of Contents:
Securing your Betterment account
Two-factor authentication
One of the most effective ways we bolster your account’s security is through two-factor authentication (2FA). Think of 2FA as adding an extra lock to your front door. When you log in, you enter your regular password and also provide a second verification method, such as a code sent to your mobile device or generated by an authentication app like Google Authenticator. This dual-step process ensures that even if someone obtains your password, they cannot access your account without the additional verification code.
Data encryption
Every interaction you have with Betterment, whether through our website or mobile application, is safeguarded by encrypted connections. This means that any data exchanged between your device and our servers is encoded, rendering it incomprehensible to anyone who might intercept it. Your sensitive information remains secure, ensuring your peace of mind as you manage your investments.
Investment safety measures
Password hashing
When you create a password for your Betterment account, we do not store it in a straightforward manner. Instead, we utilize a method called hashing, which transforms your password into a unique string of characters. This technique ensures that even if our systems were ever compromised, your actual password would remain concealed and unusable by unauthorized individuals.
Dedicated app passwords
Linking third-party applications to your Betterment account can enhance your investment management experience. For instance, you might want to track your net worth or streamline the process of importing tax documents. When a third-party app requests your Betterment credentials, we encourage you to create a specific password for that application rather than using your primary login. If the app’s connection is compromised, you can easily revoke its access to your account, maintaining control over your information.
Protecting your investments
Transparency and independent verification
At Betterment, we prioritize transparency. We make it effortless for you to verify that your holdings are accurate and properly managed. You can monitor each trade executed on your behalf, as well as the exact number of shares you own. We provide details on fractional shares sold, along with their gross proceeds and cost basis. This information is readily accessible in the Holdings and Activity sections of your account.
Insurance and fund segregation
Your funds are kept entirely separate from Betterment’s operational finances. This segregation ensures that your investments remain in your name and are not mingled with our company’s assets. In the unlikely event of financial turmoil, your assets would remain intact and secure. Additionally, your Betterment securities are covered by the Securities Investor Protection Corporation (SIPC), which insures up to $500,000 per customer, including a $250,000 limit for cash claims. While SIPC does not shield against market losses, it provides a crucial safety net in the event of brokerage failures.
Staying vigilant
As a customer, you play a vital role in maintaining your account’s security. Remain alert for any suspicious communications, such as unexpected phone calls, emails, or messages containing odd URLs or typographical errors. Remember, Betterment will never ask for your password or 2FA code outside of the login process or when updating personal information in the app. Using a strong, unique password and reporting any unusual interactions at [email protected] can further safeguard your account.
Investing with Betterment means you’re supported by a robust infrastructure designed to protect your financial interests. Our commitment to security allows you to invest with confidence, knowing we are dedicated to keeping your account and investments safe.
