At Wealthfront, we work tirelessly to maintain your financial savings protected. We all know you’re saving for vital life milestones and on the point of make investments, so it’s essential that your cash is properly protected and out there if you want it. That’s why our Money Account gives as much as $3 million in FDIC insurance coverage by means of our companion banks ($6 million for joint accounts).
We frequently get questions on how our Money Account gives a lot FDIC insurance coverage when most financial institution accounts solely supply $250,000 in protection. On this publish, we’ll dig into the main points so you may really feel assured your funds might be protected.
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 possession class (like single accounts and joint accounts, for instance). It’s supplied by the Federal Deposit Insurance coverage Company, which was based in 1933 as an unbiased 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, through both a brand new account at one other insured financial institution or a test within the quantity of your insured steadiness.
FDIC insurance coverage is a crucial consideration when deciding the place to maintain your money. Financial institution failures are comparatively uncommon however not extraordinary, as evidenced by the sudden closures of Silicon Valley Financial institution and Signature Financial institution. FDIC insurance coverage provides you peace of thoughts that, even within the occasion of a financial institution failure, you’re lined. Extra FDIC insurance coverage is healthier.
Is Wealthfront FDIC insured?
Wealthfront will not be a financial institution, however the funds in your Wealthfront Money Account are FDIC insured as much as $3 million by means of our companion banks the place we sweep your deposits. This implies you may profit from extra FDIC insurance coverage with out the effort of coping with a number of banks your self. Each single companion financial institution in our program is FDIC insured, and you may see the total listing of them right here. All of our companion banks endure an preliminary threat evaluation to hitch this system and likewise endure common quarterly threat opinions to stay in this system. We sweep your cash to as much as 12 companion banks, preserving your deposits under the $250,000 threshold at every companion financial institution as much as the restrict.
Are funds insured after they’re in transit to a companion financial institution?
Purchasers 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 not often 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 due to this fact 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 proud to supply much more FDIC insurance coverage than an everyday financial savings account can.
The Money Account is a perfect dwelling to your short-term financial savings till you’re prepared to speculate to construct long-term wealth. It earns a excessive APY of 4.30% which is many instances the nationwide common and comes with completely no account charges—together with upkeep charges, overdraft charges, or switch charges. The Money Account additionally has best-in-class automation options so you may set up your financial savings into classes, observe your progress towards your objectives, and make investments your cash inside minutes throughout market hours. 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.