Personal Capital is the latest "fin-tech" firm to attempt to draw assets from lower-yielding bank deposit options with competitive yields. A press release entitled, "Personal Capital Reinvents the Piggy Bank With Personal Capital Cash™ and Savings Planner," tells us, "Today Personal Capital, leading digital wealth manager, launched Personal Capital Cash, offering a new high-yield account with aggregated FDIC insurance that covers balances up to $1.25 million, and Savings Planner, a savings tool to help people plan annual retirement savings, an emergency fund, and pay down debt." (See the article, "Fin-Tech Invasion Targets Low Bank Deposit Rates," in the June issue of our Money Fund Intelligence newsletter.)
It explains, "Now anyone can open an account through Personal Capital Cash with no minimum balance, straight from their mobile device, and an annual percentage yield (APY) 23 times bigger than the national average you would get with a typical savings account, with the flexibility of an unlimited number of withdrawals and aggregated insurance protection up to five times more than what most banks offer."
Personal Capital CEO Jay Shah comments, "We have more than 2 million registered users who combined hold more than $41 billion in cash or money market accounts.... If those folks are earning the national rate on that cash, that amounts to more than $900 million in lost interest annually. We saw that and immediately knew we had to do something. So we built Personal Capital Cash to put that money back in the hands of American consumers."
The release tells us, "With the company's holistic approach to financial planning, Personal Capital launched a new tool on its dashboard in addition to the new high-yield account: Savings Planner. Savings Planner calculates, breaks down, and tracks annual savings goals for retirement and an emergency fund by taking into account everything from monthly expenses to taxable versus tax-deferred accounts."
Shah adds, "Saving, whether it's for retirement, a short-term goal, or in case of an emergency, can cause anxiety. Personal Capital is creating complete, clear solutions to help people feel confident about their money decisions."
Finally, the release says, "Today, Personal Capital Cash launched with 2.30% APY for non-clients and 2.35% APY for Personal Capital clients. Personal Capital Cash was launched by Personal Capital in partnership with Institutional Banking at UMB Bank. UMB's Institutional Banking team provides large scale banking services and insured deposit account solutions for broker-dealers, non-bank financial institutions, and fintech companies. To open an account visit www.personalcapital.com/cash or download our iOS or Android apps."
For more of our recent coverage of fin-tech's and cash, see the following Crane Data News and Link of the Day stories: "Inv News on Fin-Techs Invading Cash Mgmt" (5/13/19), "Wealthfront Cash Brings in $1 Billion" (4/29/19), "Wealthfront Cash Targets Deposits" (2/20/19), "Barron's Hits Fin-Tech Money Markets" (1/2/19), "SIPC Concerns About Robinhood" (12/17/18) and "Robinhood Stealing Millennial's Cash" (12/14/18).
In other news, the Investment Company Institute released its latest "Money Market Fund Holdings" summary on Monday (with data as of May 31, 2019). This monthly update reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. (See our June 12 News, "June Money Fund Portfolio Holdings: Repo, CP Up, T-Bills Down, Again.")
The MMF Holdings release says, "The Investment Company Institute (ICI) reports that, as of the final Friday in May, prime money market funds held 27.2 percent of their portfolios in daily liquid assets and 42.5 percent in weekly liquid assets, while government money market funds held 58.6 percent of their portfolios in daily liquid assets and 77.4 percent in weekly liquid assets." Prime DLA decreased from 27.7% in April, and Prime WLA increased from 42.2% the previous month. Govt MMFs' DLA decreased from 58.7% in April and Govt WLA increased from 77.2% from the previous month.
ICI explains, "At the end of May, prime funds had a weighted average maturity (WAM) of 35 days and a weighted average life (WAL) of 70 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 29 days and a WAL of 93 days." Prime WAMs decreased by one day from the previous month, and WALs increased by 2 days. Govt WAMs were the same as their April levels, and Govt WALs increased by one day the last month.
Regarding Holdings By Region of Issuer, ICI's release tells us, "Prime money market funds' holdings attributable to the Americas rose from $291.58 billion in April to $294.82 billion in May. Government money market funds' holdings attributable to the Americas rose from $1,816.82 billion in April to $1,888.58 billion in May."
The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $294.8 billion, or 44.6%; Asia and Pacific at $126.1 billion, or 19.1%; Europe at $234.9 billion, or 35.5%; and, Other (including Supranational) at $5.8.6 billion, or 1.0%. The Government Money Market Funds by Region of Issuer table shows Americas at $1.889 trillion, or 79.2%; Asia and Pacific at $123.9 billion, or 5.2%; Europe at $366.1 billion, or 15.4%, and Other (Including Supranational) at $5.6 billion, or 0.2%."
