What is the difference between the Goldman Sachs Tax-Smart Bonds Portfolio, BlackRock Target Income bond portfolio, and Cash Reserve?

The Goldman Sachs Tax-Smart Bonds portfolio is designed to provide a potentially lower-risk strategy, personalized by Betterment, for investors in higher federal tax brackets. This is one of a few bond and cash portfolio options Betterment offers:

  • Cash Reserve: If you want low risk, a Cash Reserve account can provide you interest while preserving your funds in FDIC-insured accounts at our program banks. As of September 20, 2024, our current variable interest rate on Betterment Cash Reserve is Grow your savings with 4.50% APY* (variable).*
  • Goldman Sachs Tax-Smart Bonds: If you’re a higher-income investor (in a 32% federal tax bracket or above) and want to take on more risk than Cash Reserve for the chance to potentially increase after-tax yield compared to cash, then the Goldman Sachs Tax-Smart Bonds portfolio is designed with you in mind. Unlike Cash Reserve, as your funds are invested in the market, there is risk to your principal, including the risk of loss.
  • BlackRock Target Income: If you’re comfortable with more risk than Cash Reserve and the Goldman Sachs Tax-Smart Bonds portfolio, our BlackRock Target Income portfolio is built to target income across four levels of risk while reducing volatility compared to stock portfolios. Unlike Cash Reserve, as your funds are invested in the market, there is risk to your principal, including the risk of loss.

When you sign up for a bond investing account, we’ll provide you with a personalized after-tax yield to help you compare the Cash Reserve, BlackRock Target Income portfolio, and Goldman Sachs Tax-Smart Bonds portfolio. 

Based on your financial situation and risk tolerance, you can compare and choose the best portfolio for your goals and financial situation.

Learn more about the Goldman Sachs Tax-Smart Bonds portfolio and how it compares to other account types