Wealthfront Cash Account looks like a checking account on the surface, but it has a few 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 could be a good fit for your emergency fund or other cash savings.
What Is the Wealthfront Cash Account?
Wealthfront is best known for its investment products. Wealthfront Cash is a checking account offered by the company. It also offers a borrowing account, but it's not tied to Wealthfront Cash.
Wealthfront Cash is a hybrid checking account. As of this writing, the account offers an impressive 0.10% APY as of January 2021. That is well ahead of the 0.07% average savings account APY and the pitiful 0.01% you get at the big traditional banks. In fact, it's among the highest savings APYs, according to Bankrate.
This account offers its checking account through partnerships with several banks. Because the cash is swept to multiple different accounts, it offers more FDIC insurance coverage than a typical savings account. With no fees and a high-interest rate, it's definitely worth considering.
You can use Wealthfront Cash like a traditional checking account. You can set up a direct deposit and even get your paycheck two days early than at other banks. You can also use it to pay your bills and set up automatic payments. The account also comes up with a debit card so you can make purchases and take out cash from more than 19,000 fee-free ATMs nationwide. And you can even deposit checks via the mobile app. You can even have Wealthfront organize your money into different savings buckets like an emergency fund, home down payment, vacation fund, etc.
And if you use a Wealthfront Cash account to invest in a Wealthfront Investment account, your money will be invested within minutes. You don't have to wait days for your money to clear. Your money can start working for you almost immediately.
Wealthfront Cash Features
|Accounts||Savings, Checking, Money Market, CDs|
|Access||Web Based, iPhone App, Android App, Blackberry App|
|Amount of Branches||0|
|Customer Service||Phone: M–F 7A–5P PT; Email|
Wealthfront Self-Driving Money™
And now with Self-Driving Money™, you can get your paycheck two days early with a direct deposit and completely automate your savings plan. With Self-Driving Money™, you pick a checking account for Wealthfront to monitor. You can set up features like the maximum amount of cash you need, have any extra moved to another account (like a retirement account), and even have your bills automatically paid every month when they are due. Best of all, Wealthfront will look for ways to invest any free money into your investment account so you can invest without even needing to think about it.
In addition to the above features, Self-Driving Money™ will also monitor your cash flow to make sure bills are paid and your savings are routed to the right investment accounts. You can even have Wealthfront automatically organize your money into different savings buckets like an emergency fund, vacation fund, and more.
How Does Wealthfront Cash Work?
For practical purposes, Wealthfront Cash works like a regular 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 like an emergency fund or 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 deposit funds, Wealthfront will sweep your cash into one or more of the program banks. Those banks TriState Capital Bank, Citibank, Wells Fargo, and others. You can find a complete list of partner banks on their website. You never work with those banks directly. Wealthfront Cash takes care of everything. If you don't like one of those banks, you can opt-out of any specific bank in your Cash account.
Wealthfront earns a fee from the program banks, but you still get a very competitive rate. There are a few banks with better savings account rates, but many have limits or strings attached.
When you make a deposit, the account sweeps your funds into linked accounts at participating program banks. Those accounts offer 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 into any one bank unless you go over the $1 million mark (or opt-out of one or more of the partner banks).
That means you get $250,000 coverage four times over, or $1 million total. Before the sweep, funds are protected by the SIPC under its rules.
Alternatives to Wealthfront Cash Account
|Accounts||Savings, Checking, Money Market, CDs||Savings, Checking, Money Market, CDs||Savings, Checking, Money Market, CDs|
Wealthfront Cash Pros & Cons
Self-Driving Money™—You tell Wealthfront what you want to save for and they’ll put your savings plan on autopilot.
Organize Your Cash—The Wealthfront Cash Account lets you organize your cash into buckets for things like an emergency fund or big purchase.
Interest Paying—Wealthfront Cash accounts offer interest rates in line with top savings accounts.
No Fees—You can open a Cash account without paying a cent in fees.
Unlimited Transfers—You'll receive free, unlimited transfers to any linked financial account.
FDIC Insured—Wealthfront Cash accounts have more FDIC coverage than typical bank accounts — up to $1 million.
Funds Kept at Multiple Banks—Your money will be spread across a couple of banks. This may concern some people, but it does mean a greater amount of FDIC insurance.
Final Thoughts on Wealthfront Cash
Wealthfront Cash is a unique checking account that gives you added FDIC insurance protection, no fees, and a competitive interest rate, plus the benefits of Self-Driving Money™.
While you can find slightly better rates out there, this account could be an excellent fit for someone looking for a new banking experience. Whether you have long-term savings goals or just want better interest rates, Wealthfront Cash may be a good fit.