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Wealthfront high yield savings account

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  • Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 118
    Joined: 06/10/2019

    Tim, I didn’t understand that last comment. Sorry.

    2.4-3% APY between savings accounts and CD’s. Last decade just about every brick and mortar bank gave very poor rates around 0.1% for cash positions.

    This is an emergency fund that also covers just under $2M/year in expenses. It protects my business, real estate, personal expenses. I see it as an insurance policy for tough times. Johanna recommends taking some risk and investing it. Do you concur? What percentage? All of it? Index funds? Sector funds? Bonds? Spotting is one thing – having appropriate options in another. I have another $10M roughly invested in some form of risk asset otherwise. Still too much of a cash lag? Most commenting in my thread thought my reasoning was reasonable.

    Thx!

    #224271 Reply
    TrumpMD TrumpMD 
    Participant
    Status: Physician
    Posts: 9
    Joined: 05/11/2019

    Hi

    Has anyone used welathfront high yield savings account ? I am planning on parking my emergency funds there but it sounds too good to be true. Am i missing anything here or this is really safe ?

    Click to expand…

    I made an account and it pays 2.51% interest.  I moved my savings over from Ally to Wealthfront.  Wealthfront has no fees or minimums.  A downside is it’s not a true bank account, so you won’t get a routing and account number.  You transfer money in and out from the Wealthfront side.

     

    Having said that, I’m not keeping much if any in savings anymore.  For short term I’ll keep it in Fidelity money market, and anything beyond a month or two I’m planning to use muni bonds.  After taxes and inflation, any savings account paying less than 3% has a negative real return.  And with the Fed being dovish, I don’t foresee savings accounts paying 3% soon.

    "Tax loss harvesting": buy high and sell low to achieve true wealth

    #224279 Reply
    Avatar treesrock 
    Participant
    Status: Physician
    Posts: 315
    Joined: 08/14/2017

    How is this account FDIC insured up to 1-million while other online savings accounts are insured to much lower numbers?

    #228309 Reply
    TrumpMD TrumpMD 
    Participant
    Status: Physician
    Posts: 9
    Joined: 05/11/2019
    medical school scholarship sponsor

    https://support.wealthfront.com/hc/en-us/articles/360022405852-Is-the-money-in-my-cash-account-FDIC-insured-

    They spread the money to 4 banks so it’s 4x the usual 250k FDIC coverage.

    They recently raised APY to 2.57% as well.

    "Tax loss harvesting": buy high and sell low to achieve true wealth

    #228310 Reply
    Avatar treesrock 
    Participant
    Status: Physician
    Posts: 315
    Joined: 08/14/2017

    https://support.wealthfront.com/hc/en-us/articles/360022405852-Is-the-money-in-my-cash-account-FDIC-insured-

    They spread the money to 4 banks so it’s 4x the usual 250k FDIC coverage.

    They recently raised APY to 2.57% as well.

    Click to expand…

    Ahh thanks!

    #228312 Reply

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