What You Need To Know

Note: As of July 28, 2023, the Wealthfront Cash Account has a 4.80% APY. Read more about it here

At Wealthfront, we know you’re saving for important life milestones and getting ready to invest, so it’s crucial that your money is well protected and available when you need it. That’s why our Cash Account offers up to $8 million in FDIC insurance through our partner banks ($16 million for joint accounts).

We often get questions about how our Cash Account offers so much FDIC insurance when most bank accounts only offer $250,000 in coverage. In this post, we’ll dig into the details so you can feel confident your funds will be protected.

What is FDIC insurance?

FDIC insurance protects the cash held in bank accounts up to $250,000 per depositor, per FDIC-insured bank, per account ownership category (like single accounts and joint accounts, for example). It is offered by the Federal Deposit Insurance Corporation, which was founded in 1933 as an independent agency of the U.S. government. In the unlikely event your bank suddenly lost your money, the FDIC would pay you as soon as possible, via either a new account at another insured bank or a check in the amount of your insured balance.  

FDIC insurance is an important consideration when deciding where to keep your cash. Bank failures are relatively rare but not unheard of, as evidenced by the sudden closures of Silicon Valley Bank and Signature Bank. FDIC insurance gives you peace of mind that, even in the event of a bank failure, you’re covered. More FDIC insurance is better. 

Is Wealthfront FDIC insured?

Wealthfront is not a bank, but the funds in your Wealthfront Cash Account are FDIC insured up to $8 million through our partner banks where we sweep your deposits. This means you can benefit from more FDIC insurance without the hassle of dealing with multiple banks yourself.  Every single partner bank in our program is FDIC insured, and you can see the full list of them here. All of our partner banks undergo an initial risk assessment to join the program and also undergo regular quarterly risk reviews to remain in the program. We sweep your money to up to 32 partner banks, keeping your deposits below the $250,000 threshold at each partner bank up to the limit.

Are funds insured when they’re in transit to a partner bank?

Clients sometimes ask us if their money is protected while it’s in transit to or from a partner bank, and the answer is yes. This rarely comes up because we sweep your cash to our partner banks on the same day we receive it. But even if your funds take a day to arrive, they’re still well protected because our Cash Account is offered by Wealthfront Brokerage, a federally registered broker-dealer, and therefore includes Securities Investor Protection Corporation or SIPC insurance. SIPC insurance covers up to $250,000 of your cash while it’s on its way to a partner bank, so you’re protected even before FDIC insurance kicks in.

The bottom line

At Wealthfront, we take the responsibility to keep your money safe very seriously. We’re proud to offer far more FDIC insurance than a regular savings account can.

The Cash Account is an ideal home for your short-term savings until you’re ready to invest to build long-term wealth. Thanks to our network of partner banks, it earns a high APY of 4.80% which is many times the national average and comes with absolutely no account fees—including maintenance fees, overdraft fees, or transfer fees. The Cash Account also has best-in-class automation features so you can organize your savings into categories, track your progress against your goals, and invest your money within minutes during market hours. And you can sleep better at night knowing your money has far more protection (in the form of FDIC insurance) than it would at your bank.