Robo Wealthfront is launching a high-yield savings account as it looks to manage more millennial cash
- Wealthfront is launching a high-yield cash account which is akin to a savings account.
- The cash account offers an annual interest rate of 2.42%, and depositors are insured by the FDIC up to $1 million.
- The robo advisor is the latest to join a growing list of fintechs looking to roll out cash-management product as they become full-service financial platforms.
Digital wealth management company Wealthfront is designing for a future beyond its robo advisor roots. Following other fintechs like Robinhood, it's pushing deeper into another core services of banking.
The company, with $11.5 billion assets under management, is offering a high-yield cash account, it said on Thursday. With as little as $1, clients can open a cash account, which is similar to a savings account and yields an interest rate of 2.42% annually. The account will be integrated into the company's free financial planning service.See also: A free investing fintech is launching a checking account to try and steal Main Street customers from big banks
A number of fintechs including Acorns, Betterment, M1 Finance and Robinhood have introduced cash-management products after building a customer base with their core robo-advising business. Through their new offering, Wealthfront is now getting into the game too.
Dan Carrol, Wealthfront's co-founder, said that millennials want to manage their full financial lives on autopilot, which will allow them to pay bills and mortgages, top 401K and IRA accounts, save for emergency funds, and invest the rest of their money efficiently.
"The future of commerce in financial services will be enacted through clicks not conversations," he said.
The Redwood City, California-based startup is launching the new offering through its partnership with East West Bank and New York Community Bank. Depositors of the cash accounts are insured by the FDIC up to $1 million.
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