Immediately, 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 are actually insured for as much as $2 million by our associate banks, which is 8x the quantity accessible in a standard checking account. For joint accounts, Money Account deposits are actually 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 the sudden misplaced your cash, the FDIC would pay you as quickly as attainable, by way of both a brand new account at one other insured financial institution or a verify 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 remarkable. 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 best.
How does Wealthfront supply as much as $2 million in FDIC insurance coverage?
Wealthfront isn’t a financial institution, so we work with associate banks the place we dealer your deposits. Each associate financial institution we work with is FDIC insured. We will give you way more FDIC insurance coverage in your Money Account deposits than you’d get in a daily financial savings account as a result of we sweep your cash to a number of associate banks. At any given time, your money may very well be at as much as eight associate banks, which is why you stand up to 8x the FDIC insurance coverage you’d get in a daily financial savings account. Beforehand, we swept your money to as much as 4 associate banks.
Purchasers typically ask us if their cash is protected whereas it’s in transit to or from a associate financial institution, and the reply is sure. This not often comes up as a result of we sweep your money to our associate banks on the identical day we obtain it. However even when your funds take a day to reach, they’re nonetheless nicely protected as a result of our Money Account is obtainable by Wealthfront Brokerage, a federally registered broker-dealer, and subsequently contains 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 strategy to a associate financial institution, so that you’re protected even earlier than FDIC insurance coverage kicks in.
The underside line
At Wealthfront, we take the duty to maintain your cash secure very severely. We’re delighted to supply way more FDIC insurance coverage than a daily financial savings account can — that is simply one of many some ways through which the Money Account is much superior to what a financial institution is ready to supply.
The Money Account is a perfect house in 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 instances 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 maintaining cash useful in your common bills, the Wealthfront Money Account is a brilliant place to maintain your money and assist it develop quicker. The Money Account additionally has best-in-class automation options so you’ll be able to arrange your financial savings into classes, monitor your progress towards your objectives, and make investments your cash inside minutes throughout market hours while you’re able to construct long-term wealth. And you’ll sleep higher at night time realizing your cash has way more safety (within the type of FDIC insurance coverage) than it will at your financial institution.