Our Cash Account Now Offers $2M in FDIC Insurance

As we speak, we’re excited to announce we’ve doubled the FDIC insurance coverage you get in your deposits in a Wealthfront Money Account. Your Money Account deposits at the moment are insured for as much as $2 million via our companion banks, which is 8x the quantity accessible in a standard checking account. For joint accounts, Money Account deposits at the moment are insured as much as $4 million.

What’s FDIC insurance coverage?

FDIC insurance coverage protects the money held in financial institution accounts as much as $250,000 per depositor, per FDIC-insured financial institution, per account class. It’s supplied by the Federal Deposit Insurance coverage Company, which was based in 1933 as an impartial company of the U.S. authorities. Within the unlikely occasion your financial institution all of a sudden misplaced your cash, the FDIC would pay you as quickly as potential, by way of both a brand new account at one other insured financial institution or a examine within the quantity of your insured stability.  

FDIC insurance coverage is a vital consideration when deciding the place to maintain your money. Financial institution failures are uncommon however not unprecedented. FDIC insurance coverage provides you some peace of thoughts that, even within the occasion of a financial institution failure, you’re lined. Extra FDIC insurance coverage is healthier. 

How does Wealthfront provide as much as $2 million in FDIC insurance coverage?

Wealthfront isn’t a financial institution, so we work with companion banks the place we dealer your deposits. Each  companion financial institution we work with is FDIC insured. We will give you much more FDIC insurance coverage in your Money Account deposits than you’d get in an everyday financial savings account as a result of we sweep your cash to a number of companion banks. At any given time, your money might be at as much as eight companion banks, which is why you stand up to 8x the FDIC insurance coverage you’d get in an everyday financial savings account. Beforehand, we swept your money to as much as 4 companion banks. 

Shoppers generally ask us if their cash is protected whereas it’s in transit to or from a companion financial institution, and the reply is sure. This hardly ever comes up as a result of we sweep your money to our companion banks on the identical day we obtain it. However even when your funds take a day to reach, they’re nonetheless properly protected as a result of our Money Account is obtainable by Wealthfront Brokerage, a federally registered broker-dealer, and subsequently consists of Securities Investor Safety Company or SIPC insurance coverage. SIPC insurance coverage covers as much as $250,000 of your money whereas it’s on its solution to a companion financial institution, so that you’re protected even earlier than FDIC insurance coverage kicks in.

The underside line

At Wealthfront, we take the accountability to maintain your cash protected very significantly. We’re delighted to supply much more FDIC insurance coverage than an everyday financial savings account can — that is simply one of many some ways wherein the Money Account is much superior to what a financial institution is ready to provide. 

The Money Account is a perfect residence on your short-term financial savings it doesn’t matter what you’re saving for. It earns a excessive APY of three.30% which is many occasions the nationwide common and comes with completely no account charges — together with upkeep charges, overdraft charges, or switch charges. Whether or not you’re constructing an emergency fund, saving for an enormous buy like a automobile or down cost, or simply retaining cash helpful on your common bills, the Wealthfront Money Account is a great place to maintain your money and assist it develop quicker. The Money Account additionally has best-in-class automation options so you possibly can arrange your financial savings into classes, monitor your progress in opposition to your objectives, and make investments your cash inside minutes throughout market hours once you’re able to construct long-term wealth. And you may sleep higher at evening understanding your cash has much more safety (within the type of FDIC insurance coverage) than it could at your financial institution.