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Over the past two years, interest rates have risen. As a result, all sorts of financial companies are jumping on the bandwagon and adding high-yield bank accounts. The mega-popular Wealthfront robo-advisor is no exception.
The Wealthfront Cash account looks like a checking account on the surface, but it has some unique features that set it apart from a traditional bank account. It offers a competitive interest rate and very high levels of FDIC insurance. Read more to decide if it might be right for your emergency fund or other cash savings.
Commissions and fees – 10
Customer service – 8.5
Ease of use – 9
Saving options – 5
Locations – 5
Rates – 9
7.5
We love the Wealthfront Cash account’s non-existent fees and decent interest payout. And it’s even easier to use now that it has a check feature. They also make it very easy to invest in your Wealthfront investment account from your cash account, making it a solid choice for investors.
Pros Cons
pros
- Pay to 2.55% APY
- It only requires $1 to open an account
- No account fees
- Unlimited fee-free transfers to your other accounts
- Offers up to $1 million in FDIC insurance
- It offers commission-free withdrawals at more than 19,000 ATMs
- Supports joint accounts
against
- Wealthfront has no physical branches
- You cannot deposit cash into your account
What is the Wealthfront Cash Account?
Wealthfront is best known for its robo-advisor service that allows you to invest in a variety of portfolios starting at just $500. Front of wealth Cash is a checking account offered by the company. It also offers a loan account, but is not tied to Wealthfront Cash.
Wealthfront Cash is a hybrid checking account. At the time of writing, the account offers an impressive impact 2.55% APY. That’s way ahead of the average savings account’s 0.07% APY and the pitiful 0.01% you get at the big, traditional banks. If you’re looking for a place to park your emergency fund or idle cash, this could be just what you’re looking for.
This account offers your checking account through partnerships with several banks. Because the cash is moved into several different accounts, it offers up to $1 million in FDIC insurance coverage, which is much higher than a typical savings account. And without fees and its high interest rate, it’s definitely worth considering.
You can use Wealthfront Cash like a traditional checking account. You can set up direct deposit and even receive your paycheck two days earlier than at other banks. You can also use it to pay your bills and set up automatic payments.
The account also includes a debit card so you can make purchases and withdraw cash from over 19,000 fee-free ATMs nationwide. And you can even deposit checks using the mobile app. You can even have Wealthfront organize your money into different savings buckets, such as an emergency fund, a house down payment, a vacation fund, and more.
And if you use a Wealthfront Cash account to invest in a Wealthfront Investment account, your money will be invested in minutes. You don’t have to wait days for your money to run out. Your money can start working for you almost immediately.
Features of Wealthfront Cash
| accounts | savings, Checking, money market, cds |
| access | Web based, App for iPhone, Android application, Blackberry application |
| Number of branches | 0 |
| ATM reimbursement | |
| Online deposits | |
| FDIC Insurance | |
| Customer service | Phone: M–F 7A–5P PT; e-mail |
How does Wealthfront Cash work?
For practical purposes, Wealthfront Cash works like a normal savings account.
- You can deposit and withdraw funds at any time using the Wealthfront website or mobile app.
- Wealthfront suggests using this account for cash needs, such as an emergency fund or a down payment.
- Anything with a time horizon of five years or less should not be invested in the markets, according to Wealthfront.
Once linked to an account at any other bank, you can transfer funds with a few clicks. Transfers take one to three days to complete, as with any ACH. Unlike a traditional savings account, this account does not have a limit of six withdrawals per month.
Once you’ve deposited funds, Wealthfront will sweep your cash to one or more of the program’s banks. These banks TriState Capital Bank, Citibank, Wells Fargo and others. You can find a full list of partner banks on their website. You never work directly with these banks. Wealthfront Cash takes care of everything. If you don’t like any of these banks, you can disable any specific bank in your cash account.
Wealthfront earns a fee from the banks in the program, but you still get a very competitive rate. There are some banks with better savings account rates, but many have limits or conditions.
Wealthfront Self-Driving Money™
And now with Self-Driving Money™, you can get your paycheck two days earlier with direct deposit and fully automate your savings plan. With Self-Driving Money™, you choose a checking account for Wealthfront to control.
You can set features like the maximum amount of cash you need, move anything extra to another account (such as a retirement account), and even have your bills automatically paid each month when they’re due. Best of all, Wealthfront will look for ways to put free money into your investment account so you can invest without even having to think about it.
In addition to the above features, Self-Driving Money™ it will also monitor your cash flow to make sure bills are paid and your savings are directed to the right investment accounts. You can even have Wealthfront automatically organize your money into different savings compartments, such as an emergency fund, a vacation fund, and more.
FDIC coverage
When you make a deposit, the account sweeps your funds into linked accounts at participating program banks. These accounts give you the FDIC insurance you’re used to seeing at a traditional bank.
Each of Wealthfront’s partner banks gives you up to $250,000 in FDIC coverage ($500,000 for joint accounts). Wealthfront never puts more than $250,000 in any bank unless you pass the $1 million mark (or turn off one or more partner banks).
That means you get $250,000 in coverage four times over, or a total of $1 million. Before the sweep, the funds are protected by the SIPC according to its rules.
Wealthfront Cash Account Alternatives
Wealthfront Cash is one of the best cash management accounts on the market right now because of its high interest rate and lack of fees. Getting a debit card and unlimited external transfers also makes it easier to spend and move money around.
However, there are Wealthfront competitors that may be superior depending on the features and benefits you’re looking for.
Betterment is one of Wealthfront’s main competitors and is another leading robo-advisor that also has excellent ESG portfolios and low fees. The Betterment Cash Reserve account currently pays less interest than Wealthfront Cash. However, Betterment also has a fee-free checking account that lets you earn cash back rewards.
As for CIT Bank, it offers two excellent high-yield savings accounts and a range of other products, including CDs and a competitive money market account. If you’re looking for flexible accounts to hold your extra cash or emergency fund, CIT Bank has a range of products worth considering.
Final thoughts on Wealthfront Cash
Wealthfront Cash is a unique checking account that gives you the added protection of FDIC insurance, no fees and a competitive interest rate, plus the benefits of Self-Driving Money™.
While you can find slightly better rates with several mobile banks, this account could be a great fit for someone looking for a new banking experience. Whether you have long-term savings goals or just want better interest rates, Wealthfront Cash can be a good fit.
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