Your trust is Wealthfront’s top priority, so we work around the clock to ensure the security of your accounts and the privacy of your data. Here, we’ll explain how we safeguard your accounts and personal information. We’ll also provide some tips you can use to keep your accounts even safer.
How we protect your cash
The Federal Deposit Insurance Corporation (FDIC for short) insures cash deposits at banks to protect customers’ money in the event that a bank goes out of business. Wealthfront isn’t a bank, but we work with partner banks so we can make sure you’re covered by FDIC insurance. Generally speaking, you can receive up to $250,000 in coverage for a given account at any given bank. At Wealthfront, we help you get more coverage. When you deposit money to a Wealthront Cash Account, we send those deposits to multiple partner banks so you can enjoy up to $1 million of FDIC insurance for your cash deposits.
We also make it easy to protect your Cash Account in the event that someone gets ahold of your debit card. You can lock and unlock your Wealthfront debit card right from the Wealthfront app or on our website. Locking your card can prevent unauthorized purchases and withdrawals from your Cash Account – it’s a great option if you temporarily misplace your Wealthfront debit card and want to make sure no one else is able to use it.
How we protect your investments
When you invest with Wealthfront, your investments are insured, too. We protect your Investment Account with SIPC insurance, which covers your investments up to $500,000, $250,000 of which can be in cash. SIPC oversees the liquidation of firms that close when the firm is bankrupt or in financial trouble, and customer assets are missing. You should know that, because of the financial safeguards required by regulators, it’s exceptionally rare for an investor to lose money when a brokerage goes out of business – and it’s only in the rare situation that investor assets are missing that SIPC insurance comes into play. In fact, SIPC only had two new cases between 2014 and 2020. Still, we hope our clients get some peace of mind knowing that their investments are insured.
It’s important to understand that this insurance doesn’t protect you against your investments declining in value – over the short term, that’s a normal part of being an investor and shouldn’t cause long-term investors too much concern. To learn more about SIPC insurance and how it differs from FDIC insurance, check out our blog post on the subject.
How we protect your data
Of course, you keep more than just money at Wealthfront. You give Wealthfront information about your accounts, your goals, and your risk tolerance – and we work constantly to ensure your data stays safe. Here’s a quick overview of the many ways we do this:
- We look for unusual behavior related to transactions and linked accounts and our system escalates it to our team for human review when necessary.
- Our systems are designed following best practices for least privilege. This means we only grant employees access and permissions to systems when it is absolutely necessary for their role, which helps minimize the potential for an attacker to gain access to information they shouldn’t have.
- We have an internal security team that evaluates risks across our company and platform. This team actively monitors security resources and reviews vendor security notifications for newly discovered vulnerabilities. This allows us to react quickly to protect clients’ accounts.
- We also use external security firms to test and validate our security controls for our platform and internal systems. This step complements our internal security program and helps us incorporate the latest in industry best practices.
- Ernst & Young conducts an annual audit of our policies, processes, and procedures related to changes, privileged access, and our broker-dealer operations.
What you can do to help
To make sure your accounts and personal information stay safe, we encourage you to take an active role in protecting yourself. We think everyone should learn about and adopt basic security measures. To get you started, here are some recommendations for how to maintain good security hygiene – both in general, and as a Wealthfront client.
Use two-factor verification everywhere you can
Two-factor verification keeps your Wealthfront account more secure by requiring two methods of authentication every time you log in (the first method is your email address and password, and the second is a security code that’s sent to your cell number or generated by an authenticator app like Google authenticator). Learn more about setting up two-factor verification here. It’s also a good idea to use two-factor verification for the email address linked to your Wealthfront account, as well as any other important accounts.
Choose strong passwords
We recommend picking a password that is long, strong, and unique. Choose a mix of letters (both uppercase and lowercase), numbers, and special characters. Avoid reusing the same password for multiple accounts.
Consider using a password manager
Remembering passwords can be tough (especially if you choose strong passwords!), but storing them in an email draft or on your desktop isn’t a great idea. Cybersecurity experts suggest using password management tools such as those built into modern operating systems (such as Apple’s Keychain), those built into web browsers (like Chrome’s saved passwords), or a dedicated password manager (like 1Password) to securely store and maintain online passwords.
Check your account activity
You can access your full login history on the Wealthfront app in the Settings section (under Other security settings) and see any unusual login behavior like logins from a new location. We’ll also alert you if there’s a login from a new device. Keep an eye on all of your financial accounts and look out for any logins or transactions that don’t seem quite right. Most credit cards offer real-time alerts on your phone so you can get notified of every purchase and react quickly if something seems off.
Keep an eye on your credit
There are several free websites you can use to monitor your credit, like Credit Karma. You can ask to be notified whenever a new account is opened in your name. If you spot something fishy, we suggest looking into credit freezes.
Keep your computer, phone, and web browser up to date
Many software updates contain important security fixes. This one is easy – just set your software to update automatically.
Avoid suspicious links, websites, phone calls, and text messages
Fraudsters have gotten more sophisticated over the years. If a link or communication seems suspicious, exercise caution. Remember, Wealthfront will never ask for your password over the phone or by email.
Your trust is incredibly important to us. We work hard to protect your accounts and data, and we hope you’ll take the steps above to help keep your online accounts even more secure.
Cash Account is offered by Wealthfront Brokerage LLC (“Wealthfront Brokerage”), a Member of FINRA/SIPC. Neither Wealthfront Brokerage nor any of its affiliates are a bank, and Cash Account is not a checking or savings account. We convey funds to partner banks who accept and maintain deposits, provide the interest rate, and provide FDIC insurance. Investment management and advisory services–which are not FDIC insured–are provided by Wealthfront Advisers LLC (“Wealthfront Advisers”), an SEC-registered investment adviser, and financial planning tools are provided by Wealthfront Software LLC (“Wealthfront”).
We’ve partnered with Green Dot Bank, Member FDIC, to bring you checking features. Checking features for the Cash Account are subject to identity verification by Green Dot Bank. Debit Card is optional and must be requested. Wealthfront Cash Account Visa(Registered TM) Debit Card is issued by Green Dot Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Visa is a registered trademark of Visa International Service Association. Green Dot Bank operates under the following registered trade names: GO2bank, GoBank, Green Dot Bank and Bonneville Bank. All of these registered trade names are used by, and refer to, a single FDIC-insured bank, Green Dot Bank. Deposits under any of these trade names are deposits with Green Dot Bank and are aggregated for deposit insurance coverage. Wealthfront products and services are not provided by Green Dot Bank. Green Dot is a registered trademark of Green Dot Corporation. Copyright 2021 Green Dot Corporation. All rights reserved.
The cash balance in the Cash Account is swept to one or more banks (the “program banks”) where it earns a variable rate of interest and is eligible for FDIC insurance. FDIC insurance is not provided until the funds arrive at the program banks. FDIC insurance coverage is limited to $250,000 per qualified customer account per banking institution. Wealthfront uses more than one program bank to ensure FDIC coverage of up to $1 million for your cash deposits. For more information on FDIC insurance coverage, please visit www.FDIC.gov. Customers are responsible for monitoring their total assets at each of the program banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits at program banks are not covered by SIPC.
Nothing in this communication should be construed as tax advice, a solicitation or offer, or recommendation, to buy or sell any security. Any links provided to other server sites are offered as a matter of convenience and are not intended to imply that Wealthfront Advisers or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise.
Wealthfront, Wealthfront Advisers and Wealthfront Brokerage are wholly owned subsidiaries of Wealthfront Corporation.
Copyright 2021 Wealthfront Corporation. All rights reserved.
About the author(s)
The Wealthfront Team believes everyone deserves access to sophisticated financial advice. The team includes Certified Financial Planners (CFPs), Chartered Financial Analysts (CFAs), a Certified Public Accountant (CPA), and individuals with Series 7 and Series 66 registrations from FINRA. Collectively, the Wealthfront Team has decades of experience helping people build secure and rewarding financial lives. View all posts by The Wealthfront Team