The last two months have been difficult for many of us. The spread of COVID-19 has profoundly disrupted daily life and has put additional financial strain on many people. We’ve worked hard to ensure you, our clients, are getting everything you need from us as you navigate this environment. In the midst of all this, another challenge presented itself. The Federal Reserve lowered the target range for the federal funds rate twice in March by a total of 1.5%, which forced us to lower the APY on the Wealthfront Cash Account to 0.26% last month. We hated doing this because we felt like we were letting you down, but broker-dealer regulations prohibit us from paying more than we earn.
Since then, the decrease has weighed on us and we’ve been searching for ways to offer a higher interest rate. Today, we have a little bit of good news. We’ve entered into a new bank partnership that will allow us to increase our APY by 0.09% to 0.35%. We know it’s not huge, but we hope it demonstrates our unshakeable commitment to getting you the best outcome. We’ve been working tirelessly to find a way to raise our APY, and we will continue to do so.
Why is the rate going up?
Our new partner bank will pay us a higher interest rate on the deposits we place with them. When our partner banks pay us more interest, we can pass along more money to you. As a result, we can now pay a higher APY on our Cash Account.
Our commitment to you
Our service has improved radically since we started a little over eight years ago. That’s a testament to the power of both our software-based approach and our commitment to our clients. These are challenging times, but we’ll always go above and beyond to do what’s right for you.
This small increase in our rate is nice, but it’s not enough. You can count on us to keep providing more value over time, both in terms of the rates we pay and the features we offer. Later this spring, we’ll add checking features to the Cash Account. Soon, we’ll also roll out the first of our Self-Driving Money™ features.
Thank you for your continued trust in us. We hope you are staying healthy and safe.
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 institutions accepting and maintaining deposits. Investment management and advisory services are provided by Wealthfront Advisers LLC (“Wealthfront Advisers”), an SEC registered investment adviser, and financial planning tools are provided by Wealthfront Software LLC (“Wealthfront”).
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.
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