Posted by Chuck on May 28, 2019
High-Yield APY Accounts

Published on May 28th, 2019 | by Chuck

71

Wealthfront 2.51% APY Cash Account – Available Nationwide

Offer at a glance

  • Interest Rate: 2.51% APY
  • Minimum Balance: $1
  • Maximum Balance: $1M
  • Availability: Nationwide
  • Hard/soft pull: Unknown
  • ChexSystems: Unknown
  • Credit card funding: None
  • Monthly fees: None
  • Insured: Funds held in FDIC accounts

The Offer

Direct link to offer

  • Wealthfront offers a high yield Cash Account with an interest rate of 2.51% APY.

The Fine Print

  • FDIC insured up to $1 million.
  • It only takes $1 to open and there are no additional deposit requirements.
  • Interest earned will be reported on a form 1099-INT.

Avoiding Fees

This account has no monthly fees and no other fees.

Our Verdict

It’s not technically a bank account, rather a brokerage account which holds the funds in an FDIC accounts (hence the ability to have up to $1M, more than FDIC limit of $250k). Looks like currently it’s more of a savings account than a checking account since they don’t offer a debit card, bill pay, check writing, etc, though they are considering adding those things. You can see their FAQ here. An advantage this has over savings accounts is that there is no limit to the number withdrawals per month.

Readers note in the comments that Wealthfront transfers, both in and out, must be initiated from the Wealthfront account to/from the external account. It can’t be done from an external account pushing/pulling to/from the Wealthfront account.

We’ll add Wealthfront to our list of Best High Yield Savings Accounts. This account tops the best rates shown on that list by a tiny margin of .01%. If anyone has used this bank, please share your experiences in the comments below.

Thanks to reader Vlad, Kevin, and jcn



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Love Wealthfront

sara
sara

Have you ever transferred money out of Wealthfront? How easy is it? Are there any fees? Is there limit how much you can transfer? Other banks I have dealt with always had a catch when it comes to transferring money out of the bank.

Andrew
Andrew
DogsOfWar
DogsOfWar

I’ve been using them since they stared the Cash accounts. No issues at all. I ACH money over to them each week and they pay interest at the beginning of the month. It’s no frills but I really don’t need any frills.

mysteryjoe
mysteryjoe

How about betterment smart saver account?

Max
Max

Betterment smart saver is tied to government bonds which fluctuate, they also charge 0.25% on any amount that is invested in SmartSaver. This effectively makes the account closer to 2% than 2.5%, they advertise the expected amount as 2.15%, however if the treasury has a bad year, this will be much less. Wealthfront’s on the other hand is guaranteed.

Ryan Goldstein

I wouldn’t say the rate is guaranteed at Wealthfront. In the fine print, it says: “The Annual Percentage Yield (APY) for the Cash Account is as of May 28, 2019. The APY may change at any time, before or after the Cash Account is opened.”

I’d say that Betterment’s yield is actually less subject to abrupt change than Wealthfront’s, and it’s entirely market-dependent (except for Betterment’s fee), not subject to change based on the whims of a private business. It wouldn’t be unexpected, once Wealthfront reaches a critical mass of cash account users, for them to drop their rate to 2% or lower without warning, relying on the fact that most people won’t bother moving their funds.

Betterment’s Smart Saver is simply invested in 80% SHV and 20% NEAR.

You can actually see the effective yield of Smart Saver at any time by adding 80% of the 30 Day SEC Yield listed at https://www.ishares.com/us/products/239466/ishares-short-treasury-bond-etf#fundamentalsAndRisk to 20% of the 30 Day SEC Yield listed at https://www.ishares.com/us/products/239854/ishares-short-maturity-bond-etf#fundamentalsAndRisk then subtracting Betterment’s fee (0.25% for the standard account).

That’s how Betterment calculates the yield, and they do that on/around the 1st of each month to update their website with the effective yield.

Right now, that’d be (0.80 x 2.29) + (0.20 x 2.68) – 0.25 = 2.12%.

The yield for SHV and NEAR have both been falling for the past few months, hence the falling yield. If/when the yield starts rising (e.g. if the fed raises interest rates), the return on this account will start rising as well. I personally like that the return is market-based instead of based on the business decisions of a private company.

Ryan Goldstein

And one other point, a significant portion of the income from Betterment’s Smart Saver is exempt from state and local tax (currently, 99.09% of SHV income and 2.23% of NEAR income is exempt from state/local tax).

Steve
Steve

Awesome! I just created an account and moved over all my monies from Ally. It sure would be nice if Ally does another ‘Take Back’ promotion to move money back to Ally for another 1% bonus 🙂

sara
sara

That would be awesome!

TGans
TGans

Love Wealthfront. Great experience.

sara
sara

Have you ever transferred money out of Wealthfront? How easy was it?

Andrew
Andrew
Joseph Trusts
Joseph Trusts

Hey Doc,

Bank of America Preferred Rewards Gold Tier ($20K or more) gets 10 free trades per month!
It just started mid-May 2019 per Merrill phone representative last week.

https://www.merrilledge.com/zero-dollar-trades

Gold Tier = 10 free trades per month (NEW)
Platinum Tier = 30 free trades per month
Platinum Honors Tier = 100 free trades per month

“The doctor of the future will give no medication, but will interest his patients in the care of the human frame, diet and in the cause and prevention of disease. ~ ”
― Thomas A. Edison

Max
Max

As a former Bank of America employee, I can attest that this is true, and is a change. Previously only the Platinum and Platinum Honors tiers received free Merrill trades. As of this month, Gold is now included. You may wish to create a post about the change.

Mikey
Mikey

Well, I’ve been patiently waiting and hoping for an account that exceeds the 2.50% I’m currently getting from AA/Redneck, Northern and EBSB. I guess I should have been a little more specific.

Ann
Ann

Redneck/AA just announced a drop to 2.4%. I’m glad for more to come in at 2.5% even though I already have Northern, because it keeps some pressure on Northern to keep extending their rate guarantee.

Schmekel
Schmekel

Agree. This comes at a good time as I’ll be emptying my Redneck/AA accounts next month and I prefer to spread out my deposits if possible in case one bank gets problems.

Jags
Jags

SoFiMoney is 2.25% account with unlimited ATM fee refunding debit card, check writing, joint account holder eligible, and FDIC up to $1.5 million—you know in case you need that. 😉

I think that’s a better overall package than Wealthfront.

Beefer
Beefer

A lot of people around here are still angry about SoFi not honoring their $200 signups bonus

Matt
Matt

Yeah I mean I’d probably be banking with them now if they had. 2.25% on a checking account is great. But they promised me $200 and didn’t follow through so I don’t trust them to keep the rate.

Max
Max

Sofi also outsources all of their customer service (at least on the chat end), so it’s god awful. I’ve tried chatting about the simplest of issues, and the person had no idea how anything worked. Like when I say didn’t know anything, I mean didn’t know ANYTHING. Like if I asked, how much does it cost to withdraw fees from an ATM? they would respond “Sir, I don’t know. You need to call to get a senior representative to answer a question like this”

MikeTheCreator
MikeTheCreator

ive heard reports of them freezing peoples money for no reason, im gonna stay far away from them.

Sarat
Sarat

They closed my wife account for no reason

Schmekel
Schmekel

Sofi or Wealthfront?

Schmekel
Schmekel

Are you referring to Sofi or Wealthfront?

Steve

Based on some web searches, I see complaints about SoFi freezing accounts.

Dennis
Dennis

This is what I am going with instead because of the checking account aspects with Sofi Money.

midas89
midas89

“FDIC insurance is not provided until the funds arrive at the program banks.” (I assume it’s swept to their participating FDIC bank(s) right away, but is their any scenario regarding the above that could potentially put one at risk, no matter how small that risk ever coming true might be?

Dennis
Dennis

Wealthfront doesn’t seem to be Chex sensitive. Currently am 8/24 with bank accounts.

Brooklyneer
Brooklyneer

For 2.51% I pulled the trigger, moving money from Marcus.

Barry
Barry

Really easy to sign up, currently just waiting for my deposit from Ally to complete.

barrytuneup
barrytuneup

you can get a 2.30% rate with HSBC direct online savings..this is better then Wealthfront..1)125.00 bonus if opened via Slickdeals with just $1.00..2) bonus for opening their free checking acct . You can get an order of free checks. Then after ach $ to the savings acct..you can xfer that money to the checking acct via app or online. Then write checks to your hearts content. with 2 bonuses..cant be beat.

Max
Max

HSBC? Have you dealt with their scrutiny to get an account open? The hassle alone is not worth it for most people. They lock down almost everyone in the first 30 days and require you to send in all this bullshit, then they tell you it’s verified, and STILL lock you out. I wouldn’t recommend them to my worst enemy.

Millennial Outrage

You could also just snag those deals from HSBC and leave your cash in a much-easier-to-work-with bank 🤷🏻‍♂️

Mike OBrian
Mike OBrian

If you move money around from several different accounts, sometimes they make you call in and voice verify (answer public records questions) before they will approve some transfers. Especially to banks just added. I guess security-wise that’s good, but also annoying. The calls themselves usually only last a couple minutes.

Ry5
Ry5

sooooo ETA on Ally moving to 2.4%?

qmc
qmc

If they felt the need to be competitive work smaller online banks, they would have, I think. Interest rates haven’t gone up in awhile.

rocky_NNC
rocky_NNC

Using cash savings account for a while now & its smooth, except last week i had to do a phone call to transfer funds from WF to Cap1 & it took 7 Working days.
WF told me i did transfer recently so had to do some verification.
Otherwise all good.
You can actually start a referral page for WF Brokerage /Roboinvesting account.

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