Wealthfront Cash Targets Deposits
A new alternative to low-yielding bank deposits and rival to money funds is being offered to cash investors by Wealthfront Brokerage LLC. A Feb. 14 news release, entitled, "`Wealthfront Launches Cash Account With 2.24% Interest Rate And FDIC Insurance Up To $1 Million," says, "Wealthfront announced the Wealthfront Cash Account, offering a 2.24% interest rate and FDIC insurance that covers balances up to $1 million. Wealthfront clients can open a cash account with as little as $1 and enjoy an interest rate that is 20 times higher than the national average and four times more insurance than they'd receive from a traditional bank. Additionally, the account isn't subject to any market risk and offers unlimited and free transfers, all for no fees." Andy Rachleff, CEO of Wealthfront, comments, "Our cash account is another important milestone on our path to deliver our ultimate vision of Self-Driving Money.... In order to optimize and automate all of our clients’ finances we need to offer ideal short and long-term destinations for their cash. You can expect us to further extend our services into the banking sector this year." Dan Carroll, co-founder of Wealthfront, adds, "Every year the four largest banks in the U.S. make over $300 billion in revenue while paying consumers next to nothing on their cash deposits. If the $8 trillion in cash sitting at the commercial banks was moved to a service like Wealthfront instead, consumers would have an additional $170 billion in their pockets every year. Imagine how impactful that extra money could be on people's lives." The quoted APY of 2.24% for the Wealthfront Cash Account, a rate that equals our current Crane 100 Money Fund Index, "is as of Feb. 14, 2019. The APY may change at any time, before or after the Cash Account is opened." The company cited additional benefits: "Anyone who opens a Wealthfront Cash Account will receive free financial advice and answers to over 10,000 financial questions. For instance, Wealthfront can provide recommendations on how much to save and what accounts to save in. The Wealthfront Cash Account is available to clients starting today and will be available for everyone in the coming months."
