Wealthfront’s Cash Account Now Offers FDIC Coverage Up To $8 Million (2024)

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Wealthfront has increased the Federal Deposit Insurance Corporation (FDIC) coverage for its Cash Account up to $8 million for individual accounts and $16 million for joint accounts. In the unlikely event that Wealthfront fails, your money is protected up to 32 times more than the usual $250,000 insured by the FDIC.

The additional coverage is made possible by Wealthfront’s network of 32 partner banks. The money in your Cash Account is automatically spread across multiple program banks, keeping your balance below the FDIC limit of $250,000 at each bank. According to Wealthfront, all partner banks are FDIC-insured and reviewed regularly for risks.

Although your funds are usually transferred to partner banks on the day of deposit, transfers sometimes take longer. When this happens, your money in transit is still protected up to $250,000 through the Securities Investment Protection Corporation (SIPC) until it arrives at the partner banks.

“This year rattled consumer confidence in many financial institutions and put a premium on having as much FDIC insurance as possible to keep funds safe,” said Dave Myszewski, vice president of product at Wealthfront, in a recent news release.

“Our combination of smart technology and partnerships with FDIC-insured banks means we can offer some of the highest FDIC protection available. In addition to providing an industry-leading APY and FDIC coverage, we will soon be rolling out more features that make our Cash Account an even better place for your uninvested cash.”

Wealthfront is a robo-advisor platform that offers a high-yield Cash Account and automated investing. Wealthfront also offers some of the industry’s highest FDIC protection. Other banks and fintechs offering competitive FDIC insurance include Betterment, Bluevine, SoFi and Ameris Bank, and like Wealthfront, they spread your funds among partnering FDIC-insured banks.

Wealthfront’s Cash Account combines savings and checking features with a generous APY of 4.80%. It has unlimited withdrawals and transfers, no account fees and no minimum or maximum balance requirement to earn the highest APY. You can also pay bills, deposit checks and receive direct deposits up to two days early through your Cash Account. The Cash Account comes with a debit card and access to a network of 19,000 fee-free ATMs.

Find The Best High-Yield Savings Accounts Of 2024

Wealthfront’s Cash Account Now Offers FDIC Coverage Up To $8 Million (2024)

FAQs

Wealthfront’s Cash Account Now Offers FDIC Coverage Up To $8 Million? ›

A given bank can only provide up to $250,000 of FDIC insurance per individual. Wealthfront is not a bank, but by sweeping deposits to up to 32 partner banks and keeping the amount held in each bank below the $250,000 limit, the Wealthfront Cash Account enables access to up to $8 million in FDIC insurance coverage.

Are Wealthfront cash accounts FDIC insured? ›

Yes, the Wealthfront Cash Account is FDIC insured up to $8 million for individual cash accounts and $16 million for joint cash accounts through partner banks.

What is the catch with a Wealthfront cash account? ›

Wealthfront Cash Account fees
ActivityAmount
Out-of-network ATM$2.50 + ATM owner fee
Bank teller$2.50 + teller fee
International transaction fee2.75%
Cash deposits at select retailersUp to $5.95
1 more row
Jun 25, 2024

Is the FDIC covered up to $1.25 million? ›

The maximum insured amount for a trust is now $1.25 million per trust owner per insured depository institution. The general rule that a trust account receives $250,000 of coverage per beneficiary is unchanged. A trust account with one owner (the trustee) and three beneficiaries is insured for $750,000.

Can I withdraw money from my Wealthfront cash account? ›

For Wealthfront cash accounts, you can deposit and withdraw a minimum of $1. Transfer maximums vary by transfer type, and can be found in this FAQ. You can make a one-time deposit or schedule recurring deposits via bank transfer (ACH). Recurring deposits can be scheduled weekly, bi-weekly (1st & 15th), or monthly.

Is my money in Wealthfront safe? ›

Your cash is insured by the Federal Deposit Insurance Corporation (FDIC). This coverage protects your cash in the event that a bank goes out of business. Wealthfront uses multiple partner banks to ensure FDIC coverage of up to $8 million for your cash deposits.

Do millionaires worry about FDIC? ›

At the end of the business day, the private bank, as custodians of their various accounts, sells off enough liquid assets to settle up for that day. Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank.

What are the cons of using Wealthfront? ›

The main con of Wealthfront is that its required $500 minimum deposit is higher than other free robo-advisors like SoFi Invest® and Betterment Investing.

Which bank owns Wealthfront? ›

I am excited to announce that Wealthfront has agreed to be acquired by one of the premier brands in wealth management, UBS, in a transaction valued at $1.4 billion.

What happens if Wealthfront goes under? ›

Wealthfront Brokerage is a member of SIPC, which insures Cash Balances swept into Money Market Funds as follows: Customers are protected up to the applicable SIPC limits if Wealthfront Brokerage were to go out of business and there were customer securities or funds unaccounted for.

Is it bad to keep more than $250,000 in one bank? ›

The FDIC insures up to $250,000 per account holder, insured bank and ownership category in the event of bank failure. If you have more than $250,000 in the bank, or you're approaching that amount, you may want to structure your accounts to make sure your funds are covered.

How to get more than 250k FDIC insurance? ›

Here are four ways you may be able to insure more than $250,000 in deposits:
  1. Open accounts at more than one institution. This strategy works as long as the two institutions are distinct. ...
  2. Open accounts in different ownership categories. ...
  3. Use a network. ...
  4. Open a brokerage deposit account.

What happens to money above FDIC limit? ›

The Depositors Insurance Fund (DIF) is another option for insuring excess deposits. This program covers deposit account balances beyond the $250,000 FDIC limits at member banks. So, once you exhaust your FDIC coverage limits, you're still protected.

Can Wealthfront cash account lose money? ›

FDIC insurance coverage is limited to $250,000 per qualified customer account per banking institution. Wealthfront uses more than one program bank to ensure FDIC coverage of up to $8 million for your cash deposits. For more information on FDIC insurance coverage, please visit www.FDIC.gov.

Should I open a Wealthfront cash account? ›

The lack of fees on the cash account offered by Wealthfront, a top robo-advisor, make it a worthy cash account to consider. Best for: Wealthfront brokerage customers who are looking for a free companion cash account that earns some interest. Offers a 5.00% annual percentage yield.

Is Wealthfront cash account taxed? ›

For any taxable investment accounts with dividends or realized gains/losses, we'll post a Consolidated 1099. For cash accounts that generate more than $10 of interest or received $600 or more in awards, we'll post a tax form 1099.

What cash App is FDIC-insured? ›

If you have a Cash App Card, or are a sponsor of any active sponsored accounts, up to $250,000 of your cash and savings balances in Cash App is covered by FDIC insurance through our partner bank Wells Fargo Bank, N.A., Member FDIC.

What bank is Wealthfront backed by? ›

Green Dot is one of our FDIC-insured partner banks. We're not a bank, so we work with Green Dot to provide your routing and account numbers, as well as your Wealthfront debit card. This is a pretty common relationship in our industry (ahem, “fintech”).

Do you have to pay taxes on Wealthfront cash account? ›

If you earned more than $10 in interest or $600 in awards in a Wealthfront Cash Account, we'll send you a 1099. Use this form to file your 2023 tax return. If you have a taxable investment account with dividends or realized capital gains, we'll send you a Consolidated 1099. Use this form to file your 2023 tax return.

Why is Wealthfront APY so high? ›

Long answer: it's in our best interest to offer our clients a competitive rate, so we're always looking for opportunities to do just that. When our partner banks pay us more for our deposits, we pay it forward to you with a better APY. We'll always notify you when the rates change.

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