Betterment Safety Net - Short Term Investment


With saving accounts interest rates being super low, I am trying to find a different way to save/invest for a short term (3-5 years). I heard about Betterment’s “Safety Net” and was wondering if it is considered a safe short term investment.

I would appreciate any thoughts.


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It looks like the Safety Net is just a conservative asset allocation of stocks and bonds. It looks like it’s set at 30% stocks, 70% bonds.

Is it SAFE? Well, you’re holding investments that can change in value. Both stocks and bonds can certainly go down in value. But holding cash also isn’t perfectly “safe” as it it always losing value to inflation. So you have to decide which risk is better for your situation.

I have no problem with Betterment’s theory on this medium term asset allocation. It sounds like something I would do myself. (Note for very short terms, like money you know you’re gonna spend within a year, I’d keep it all in cash).

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Thanks @Jeremy! That was supper helpful!

I love this question because I’m never too sure either. My happy medium is a high yield savings account (HYSA). Even though the interest rates are really low right now it’s better than a typical checking/savings account. If you use Betterment’s Safety Net I hope you let us know how it goes!