Financial experts commonly recommend you save three to six months’ worth of living expenses in an emergency fund. If you’re working toward that goal, putting your money into a high-yield savings account can be a smart idea. But traditional savings accounts at even the best banks don't give you the ability to easily use your money or frequently transfer money in and out.
Have you ever wondered why you can’t earn interest on the money in your checking account? You stash funds there to pay your bills, but because most checking accounts don’t pay interest, a big chunk of your cash isn’t earning you anything.
That's why the Wealthfront Cash Account could be an excellent option if you want to earn more on all of your money and get paid up to two days early. This account offers an APY (annual percentage yield) that’s well above the national average as well as the checking features you need, including a debit card and the ability to set up automatic bill payments.
Here’s what you need to know about the Cash Account and how it works.
- Wealthfront Cash Account basics
- What we like about the Wealthfront Cash Account
- What the Wealthfront Cash Account could improve
- How to open a Wealthfront Cash Account
- How to withdraw money from a Wealthfront Cash Account
- Other Wealthfront Cash Account fees
- Wealthfront Cash Account customer service
- Common questions about the Wealthfront Cash Account
Wealthfront Cash Account basics
|APY||0.35% (as of Sep. 18, 2020)|
|Minimum balance for APY||$1|
|Minimum deposit to open account||$1|
|Monthly maintenance fees||None|
|ATM access||Yes, nationwide network of 19,000 fee-free ATMs|
|Transactions per month||No limit|
|FDIC insured||Yes, up to $1 million|
What we like about the Wealthfront Cash Account
If you’re considering opening up a Wealthfront Cash Account, there are some significant benefits to keep in mind:
- The account offers a much higher APY: When you open an account, you’ll earn 0.35% interest (as of Sep. 18, 2020). That’s much higher than the national average.
- Direct deposit and get paid early: Get paid up to two days early when you set up direct deposit. Your cash will also immediately begin earning interest.
- Mobile check deposit: This account includes the convenient feature of mobile check deposits. This means you don't have to visit a bank anymore if someone pays you with a paper check.
- Conveniently spend and access cash: The Cash Account debit card makes it easier for you to make purchases and access cash. Use your debit card to get cash from a network of 19,000 fee-free ATMs.
- Pay with checks: Wealthfront recently added the ability to send checks from your account. Instead of writing your own checks, Wealthfront can write them and send them for you.
- Pay bills using routing info: You can also set up automatic bill payment with your Cash Account routing number and avoid late or missed payments on important bills.
- Pay friends using Venmo, PayPal, and more: Link your Cash Account to your Venmo, PayPal, or other payment service providers to quickly pay friends and family.
- There’s a low account minimum: Some companies require you to have hundreds or even thousands saved before you can open an account. With Wealthfront’s Cash Account, you can get started with as little as $1.
- There are no fees: There are no management, maintenance, or advisory fees to worry about.
- You can complete unlimited transfers at no cost: You can deposit and withdraw money as often as you want; there’s no limit to how many transfers you can complete, and there’s no cost to move your money.
- Your balance is insured by the Federal Deposit Insurance Corporation (FDIC) up to $1 million: With a Wealthfront Cash Account, you get up to $1 million in FDIC insurance. Traditional banks usually only offer $250,000 of FDIC insurance, so Wealthfront accounts have four times the typical amount.
What the Wealthfront Cash Account could improve
While a Wealthfront Cash Account can be a smart savings vehicle for your money, there are some drawbacks you should consider before opening an account:
- No paper checkbook: A Wealthfront Cash Account can’t replace a traditional checking account if you find yourself in situations where you simply need to write a paper check on the spot to pay for something. The option for a traditional checkbook is not available with this account.
- Transferring money between Wealthfront accounts may be limited: For some users, the ability to transfer internally between Wealthfront accounts may feel limiting. For others it may not present an issue. Currently Wealthfront supports transfers between Cash Accounts and Taxable Investment Accounts, and it also supports making contributions from Cash Accounts to IRAs (Traditional, Roth, SEP). There are some other transfers you cannot make, though, like transferring between Cash Accounts or transfers to and from a 529 College Savings plan.
How to open a Wealthfront Cash Account
To open a Wealthfront account, you need to be at least 18 years old, have a valid U.S. Social Security number, have a permanent U.S. residential address, and currently reside in the United States. You also must have a working U.S. phone number capable of accepting text messages.
If you meet those criteria, opening a Wealthfront Cash Account is simple:
- From Wealthfront’s home page, click on “Start saving.”
- Select “Open an account”, then choose “High-interest cash savings” as your primary reason for opening an account.
- Next, the site will prompt you to enter your name, email address, and a password.
- Choose your bank or brokerage account to fund your new Wealthfront Cash Account. Major banks like Chase, Wells Fargo, Capital One, and Bank of America are all supported. If your bank isn’t listed, you can still use it to fund your new account by manually entering your information.
- Enter the amount of money you’d like to transfer from your bank or brokerage account to your Wealthfront Cash Account.
- You’ll receive a confirmation email. Click on the link in the email and Wealthfront will complete the transfer, usually within one business day.
How to withdraw money from a Wealthfront Cash Account
You can withdraw money from your Wealthfront Cash Account in several ways. For online transfers, log in and select “Transfer Funds” at the top left of your screen. The site will prompt you to enter how much you want to withdraw and where you want to send it. Withdrawals typically take one to three business days to complete.
With the Cash Account debit card, you have access to a nationwide network of 19,000 fee-free ATMs. You can withdraw up to $1,000 each day (up to $3,000 monthly) this way. Or, you can receive up to $2,500 cash back at point-of-sale terminals if the merchant offers this option.
Other Wealthfront Cash Account fees
|Stop payment fee||N/A|
Wealthfront Cash Account customer service
If you need help opening an account or with account management, Wealthfront only offers customer support online and over the phone; there are no branches for you to visit in person like you can with most major banks. You can submit questions through Wealthfront’s secure online form. If you want to call customer service, you can find the contact number by logging into your account.
Common questions about the Wealthfront Cash Account
Is a Wealthfront savings account safe and legitimate?
A Wealthfront Cash Account is a safe and legitimate way to grow your savings. The account isn’t subject to market fluctuations, so you don’t have to worry about losing money. And your money is protected by up to $1 million of FDIC insurance.
Is Wealthfront a bank?
No, Wealthfront isn’t a bank. When you open a Wealthfront Cash Account, the company sends your funds to different institutions that accept those deposits. Your cash balance is swept to one or more banks and is eligible for FDIC insurance.
Is Wealthfront free?
Your Wealthfront Cash Account doesn’t have any fees and is free to use. Instead, the company makes money by receiving a portion of the interest earned on the money in your Cash Account.
Is Wealthfront a money market account?
A Wealthfront Cash Account is not a money market account. It is a cash account with checking features. A money market account is more like a savings account with check-writing abilities. Like savings accounts, money market accounts have a monthly limit of six payments or withdrawals. A Wealthfront Cash Account has no such limitations.
Can the interest rate on a Wealthfront Cash Account change?
As of Sep. 18, 2020, the APY on Wealthfront’s Cash Account is 0.35%. However, Cash Account interest rates are variable and can change over time, coinciding with movements in market interest rates.
If you want to earn more on all of your money, taking advantage of the ability to earn a high rate of interest on your checking account makes a lot of sense. By transferring your money into a Wealthfront Cash Account, you can earn more than you would with a traditional savings account while still having the ability to access and spend your money.
Disclaimer: All rates and fees are accurate as of Sep. 18, 2020.