With interest rates at a historical high, many people are starting to consider putting some of their money in to a high-yield savings account. There are many options out there including ones from traditional banks and others from new "fintech" institutions. Wealthfront is a fintech that has been a pleasure to bank with, and although they offer some investment options as well, today we will focus on their high-yield Cash Account which you can use to earn some good interest on your heard-earned cash.
What is Wealthfront?
Wealthfront is a firm that is partnered with Green Dot Bank and other partner banks to provide banking services that traditional institutions rarely offer. The Cash Account is like a traditional checking account but has an interest rate competitive against most traditional savings accounts. The highlights of this account is that as of 1/6/23 the current APY is a 3.8%, higher than Capital One (3%) and Sofi (3.75%) and does not require direct deposit, or maintenance fees. All you need to open the account is to deposit $1.
Something unique is about the Cash Account is that it is FDIC insured for up to $2,000,000, which is 4x the usual insurance offered for traditional bank accounts, allowing you to really maximize your returns on that high APY!
You can open multiple Cash Accounts and rename them according to any goals you might have, such as an "emergency fund" or "car down payment" to help you keep track of your savings towards each goal. Joint accounts are available as well, however checking privileges are limited for these types of accounts at the moment.
Wealthfront also provides free unlimited transfers between external accounts and provides an automated savings system that can automatically transfer extra money into an emergency fund or Cash Account for savings.
The Cash Account primarily functions like a savings account, but you can opt for checking features provided by Green Dot Bank to set up direct deposit, deposit and checks, pay bills, and have access to their ATM network, with no additional fees involved.
Wealthfront can also send checks on your behalf and withdraw from out-of-network ATMs with some limitations. To send checks, there needs to have been at least $250 in to Wealthfront and have had an average of at least $2,500 or more across all of your Wealthfront accounts for the past 60 days. Out-of-network ATM withdrawals will incur a fee from the ATM provider.
Track your Liabilities and Net Worth
Many banks provide some type of wealth tracker which can sometimes be very convoluted with their website's design. Wealthfront has a similar tracker than will help you see how soon you can retire based on the parameters you set, and will automatically adjust the parameters based on your habits. This may not be a unique feature, however Wealthfront's version is easy to use and integrated into the main page to help boost your morale and inspire you to maintain good financial habits.
The interface will also allow you to link all of your checking, savings, investment, and credit card accounts to help you track your liabilities and current net worth. The breakdown is shown on the main page and updates periodically.
The current referral bonus for the Wealthfront Cash Account is an extra 0.5% APY for both the person who opens a new account and the one who referred them for it for 3 months. Although this isn't the best referral bonus like those for traditional bank accounts, the extra 0.5% combined with the already very high 3.8% can yield you 4.3% back for 3 months with no limitations on the amount of interest you can earn nor the amount of money that you can earn on.
Although I will always be skeptical about fintech institutions, I have really been impressed with Wealthfront. Their Cash Account is great for a main savings account and/or emergency fund. With no limit to the amount that can earn interest and $2,000,000 of FDIC insurance, one can comfortably store their money while earning a great rate on interest.
Wealthfront appears to always push for the highest APY that they can give to their consumers, and is a great way for people with multiple accounts across different banks/brokerages to keep track of their net worth and liabilities.
If you are interested in checking out Wealthfront's services for yourself, or found any information in this article useful, please consider using my referral link and secure that extra 0.5% APY for yourself!
Wealthfront and its services mentioned here are properties of the Wealthfront Corporation and use in this article is for educational purposes and subjective review. Products, interest rates, and offers are subject to change. Investments are not FDIC insured and will always carry risk. See Wealthfront's website to learn more information. https://www.wealthfront.com