Thought some of you here might find this interesting. I was reading Bogleheads this morning and stumbled upon a post talking about Wealthfront’s new Cash Account. This is an actual savings account that is giving 2.57% APY.
My initial reaction was skepticism. If you remember, Robinhood received a huge backlash after they launched their 3% APY savings account that wasn’t FDIC insured and wasn’t really a savings account.
It appears that Wealthfront has learned from Robinhood’s mistakes. One of the main selling points is that Wealthfront Cash is FDIC insured up to $1 million. It makes it tempting to move my savings.
Here’s a quick look at how Wealthfront compares to some other high-yield savings accounts.
|Annual percentage yield (APY)||2.10%||2.15%||2.57%|
|FDIC insurance amount||$250,000||$250,000||$1,000,000|
|Monthly withdrawal limit||6||6||Unlimited|
The major risk, I suppose is that Wealthfront is still a startup that has yet to turn a profit. Also, I suppose we’ll see if the FDIC has anything to say in the next few days.
If you’re interested in Wealthfront, sign-up from the link below. We’ll both get up to $5,000 in managed services. That’s no fees for investments up to $5,000.