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Wealthfront has increased the Federal Deposit Insurance Corporation (FDIC) coverage for its Cash Account up to $8 million for individual accounts and $16 million for joint accounts. In the unlikely event that Wealthfront fails, your money is protected up to 32 times more than the usual $250,000 insured by the FDIC.
The additional coverage is made possible by Wealthfront’s network of 32 partner banks. The money in your Cash Account is automatically spread across multiple program banks, keeping your balance below the FDIC limit of $250,000 at each bank. According to Wealthfront, all partner banks are FDIC-insured and reviewed regularly for risks.
Although your funds are usually transferred to partner banks on the day of deposit, transfers sometimes take longer. When this happens, your money in transit is still protected up to $250,000 through the Securities Investment Protection Corporation (SIPC) until it arrives at the partner banks.
“This year rattled consumer confidence in many financial institutions and put a premium on having as much FDIC insurance as possible to keep funds safe,” said Dave Myszewski, vice president of product at Wealthfront, in a recent news release.
“Our combination of smart technology and partnerships with FDIC-insured banks means we can offer some of the highest FDIC protection available. In addition to providing an industry-leading APY and FDIC coverage, we will soon be rolling out more features that make our Cash Account an even better place for your uninvested cash.”
Wealthfront is a robo-advisor platform that offers a high-yield Cash Account and automated investing. Wealthfront also offers some of the industry’s highest FDIC protection. Other banks and fintechs offering competitive FDIC insurance include Betterment, Bluevine, SoFi and Ameris Bank, and like Wealthfront, they spread your funds among partnering FDIC-insured banks.
Wealthfront’s Cash Account combines savings and checking features with a generous APY of 4.80%. It has unlimited withdrawals and transfers, no account fees and no minimum or maximum balance requirement to earn the highest APY. You can also pay bills, deposit checks and receive direct deposits up to two days early through your Cash Account. The Cash Account comes with a debit card and access to a network of 19,000 fee-free ATMs.
