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A Comprehensive Review of Popmoney

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

What is Popmoney?

Person-to-person (P2P) cash transfer services like Popmoney have become a popular and convenient way for exchange money via virtual hands these days. Powered by the tech service provider Fiserv, this service transfers cash from one bank account to another with a flat fee charged per transaction.

About 2,500 financial institutions offer Popmoney cash transfer services, allowing customers to send and request money by simply signing into their online bank account. If your bank doesn’t offer Popmoney for transfers, you can still send money through the Popmoney website or mobile app after creating a profile, but there are plenty of alternative payment apps out there to consider as well.

In this post, we’ll cover what you need to know about the service, including how to use the service, whether it’s safe and how it stacks up against other P2P cash transfer apps. Fees and pricing in this piece are accurate as the date of publishing.

How to send money with Popmoney

The process for sending money is different for people who have the Popmoney service offered through their bank.

If your bank participates with Popmoney: You initiate a transfer from your online bank account through your bank’s website. Find out if your bank participates here.

If your bank doesn’t participate with Popmoney: You need to create a Popmoney profile on the website to transfer money using your bank account or debit card.

You can send money to a friend or family member using their email, phone number or bank routing and account number. The recipient will be notified about the money transfer, and will be given instructions on how to receive the cash.

How to receive money with Popmoney

People can send you money in three ways — using your email, mobile number or bank account number. This process is a bit different for each method.

If someone sends you money using your phone number: You get a text with instructions on how to get your money.

If someone sends you money using your email address: You get an email with instructions on how to get your money.

If someone sends you money using your bank account: You get cash deposited straight into your account without a notification, unless the sender chooses to write a message.

You have 10 days to collect money if you get the cash by email or phone number. The payment is returned to the sender if it expires. There’s also an option to request funds. If the person you request money from isn’t already signed up, you should get cash within three days of them creating an account with Popmoney.

How long does Popmoney take to transfer money into a bank account?

It can take anywhere from one to three business days or more to transfer money depending on several factors including when you send the money, how you send the money and when the recipient accepts the cash.

Debit card transactions offer the speediest delivery. Payments can be delivered as early as the next business day if it’s sent using a debit card before 5 p.m. PST and the recipient accepts it by 10 p.m. PST.

Bank account transactions can take several days. Money paid by a bank account before 10 p.m. PST can take three business days to deliver.

Transfer limits

Popmoney limits how much money you can send and request through the platform.

When sending money, the limits are:

  • $500 per day and $1,000 every 30 days for debit card transactions
  • $2,000 per day and $5,000 every 30 days for bank accounts

For money requests, the limits are:

  • $1,000 per day and $2,500 every 30 days when you send money requests to someone else
  • $2,500 per day and $4,000 every 30 days when you pay someone else’s request

Popmoney fees

Receiving money is free. Sending and requesting money is what’s going to cost you a little bit. It costs $0.95 per transaction to send money to someone. It also costs $0.95 to request money from someone. However, you won’t be charged a fee if you make a request and the person doesn’t pay it. The fee is only deducted when you receive the money, and you have the option to transfer the fee to the person who sent you the cash.

Popmoney limitations

The service is only for people who live in the U.S. There are rules for how you can use the platform. Your payment may be canceled if you don’t adhere to the terms and conditions. Payments cannot be made that are related to the sale of tobacco, drugs, firearms or ammunition, illegal activities, gambling or gaming. You can read the full terms and conditions for the service here.

Is Popmoney safe to use?

Popmoney uses a verification process to make sure the person you’re sending money to owns the phone number or email address. If you send money to the wrong account, you can report it to the service, and an investigation may take place, but it offers very limited protection for users in this regard.

Popmoney may also give information to the receiver, like your name, address and phone number to fulfill the payment request. Because of this, you should be exchanging money only with people you trust. Overall, the service is safe to use. With that said, you should be cautious of any app when money is involved. There are two situations that could get you in trouble with a P2P app.

The first security risk is if someone gets access to your name, account number or debit card number, and initiates a transfer on your behalf. Identity theft is a real concern. People have reported fraudsters getting access to their bank account information and scheduling transfers. If this happens to you, and you catch it early, Popmoney offers some support.

According to the terms and conditions page, “your liability is no more than $50.00 should someone access your account without your permission” as long as you notify Popmoney within two days of finding out that your password or account could be compromised. Keep in mind, this means you need to notify them as soon as your wallet, password or bank account information is stolen. Your liability could be as much as $500 if you don’t notify them in time and they can prove that unauthorized use of your account could have been avoided if you had notified them earlier.

Ultimately, identity theft is something that can be challenging to catch right away. You may not even know someone has access to your personal information until money starts disappearing. Be vigilant and report stolen or lost information promptly.

Popmoney scams and how to avoid them

The second scenario where you can run into trouble with a P2P app is if you get duped into sending money to someone who’s requesting it as part of a scam. In this situation, there’s a good chance you won’t get the money back because transfers are cold, hard cash that someone can run away with. Popmoney does not offer fraud protection when you willfully make transactions. Compare this with a credit card which has certain purchase protections for members.

How can you avoid getting scammed? Remember — P2P apps like Popmoney are for transactions with trusted individuals. If you send cash for a one-off service or a Craigslist product that ends up not being what you want, it’s unlikely that you’ll be able to file a dispute or track down that money.

Think twice if someone wants to sell you a used piece of furniture or show tickets, and can only take money from a cash app. These apps are meant to do straightforward transactions between trusted friends like splitting a bar tab or hotel stay, and are not meant for business transactions.

Which banks use Popmoney?

Popmoney and Zelle are two products available in the online bank account services of select financial institutions. Popmoney at this time has a wider reach than Zelle. Its service is offered by nearly 2,500 financial institutions including:

  • BBVA Compass
  • Commerce Bank
  • Fifth Third Bank
  • First Hawaiian Bank
  • MidCountry Bank
  • Midwest Bank
  • PNC Bank
  • Regions Bank
  • US Bank

To see if your bank is participating, you can type in your bank name or routing number here to search.

Popmoney vs. other person-to-person payment networks

Here’s how Popmoney stacks up against the competition:

Popmoney vs. Paypal

PayPal is a household name. When using PayPal, your money goes from your PayPal balance, bank account, debit card or credit card to another person’s PayPal account.

Fees. PayPal is free if you send money to another person through your bank account. By comparison, Popmoney charges $0.95.

If you’re sending money through PayPal from one personal account to another via a linked bank account or eligible debit card (Visa or Mastercard), you have the option to do an Instant Transfer. Instant Transfers can happen within 30 minutes, and the fee is $0.25.

Things get a little expensive if you use a credit card with PayPal. There’s a 2.9% transaction fee, plus a $0.30 fixed fee when you transfer money using a card within the U.S. You pay a little bit more when you’re sending money from the U.S. to another country. You can review those international fees here.

Network reach. PayPal has a wider reach than Popmoney since you can send money stateside and internationally. PayPal connects with brick-and-mortar banks and even some online ones.

Payment types. There are more payment options here than Popmoney since credit cards are accepted.

Speed. Instant transfers arrive in a receiver’s bank account within 30 minutes, which makes this faster than Popmoney. However, the regular transfer via PayPal account is on par with the speed of Popmoney account transfers. Transfers from the PayPal account to the recipient’s bank account can take one business day if they submit the request before 7 p.m. EST. Transfers initiated on weekends or holidays can take several days. Popmoney also takes about one to three business days.

Safety. PayPal offers more robust fraud protections for buyers. If you’re purchasing something from someone — concert tickets, used furniture, memorabilia, etc. — PayPal is a better place to do it because of Purchase Protection benefits. You can file a dispute for eligible purchases and possibly receive full reimbursement. Read more about buyer protection here.

Popmoney vs. Zelle

Zelle lets you send money to other people enrolled in the app. Like Popmoney, Zelle is a system that’s offered by some banks within the online banking portal.

Fees. There’s no fee to use Zelle, although, Zelle recommends that you check with your bank to confirm that they don’t charge a fee for transfers through the app.

Network reach. Like Popmoney, Zelle can be accessed through your online bank account. Zelle currently participates with 100+ banks, far less than Popmoney’s 2,500 financial institution network. But the Zelle network is made up of major banks like Ally Bank, Bank of America, Citibank, Citizens Bank, Wells Fargo and more. Plus, if your bank or credit union doesn’t offer Zelle, you can download the app to send money anyway as long as the receiver has Zelle.

Payment types. You send money using someone’s mobile number or email address. Payments go directly from one bank account to another for those who have the app in online banking. If one party doesn’t have a Zelle account through online banking, it’s a transaction between a bank account and a debit card (Visa or Mastercard) instead.

Speed. Zelle is faster than PopMoney. The transfer can happen in minutes when both the sender and recipient have Zelle. A transfer between someone enrolled in Zelle and someone who isn’t can take one to three business days.

Safety. Like Popmoney, there may be some protections when someone initiates a fraudulent transaction from your account if you report it early enough. However, the Zelle’s terms and conditions clearly state that this is a service meant to send money bank and forth to people you know. Zelle takes no responsibility for loss or damages incurred because of scams. You’re also responsible for entering the recipient’s email and phone number in correctly.

Popmoney vs. Google Pay Send

Google Wallet used to be the name of the Google app used to send and receive money. Rebranding has caused some reorganization. Google Pay is now the umbrella payment system you can use to make in-store payments and much more. Within Google Pay is the Google Pay Send app, which can send and receive payments using your friend’s name, email address or phone number.

Fees. There are no fees to use this service compared with the $0.95 cost of Popmoney.

Network reach. You can use the Google Send Pay app on mobile or on desktop. Google Pay Send is part of Google Pay, which has more features overall since it’s a full mobile wallet. You can use Google Pay to pay for takeout, rideshares, transit and easy checkout when buying Google products.

Payment types. You link a debit card or bank account. Credit cards, prepaid cards, and PayPal accounts can’t be used to send and receive money at this time.

Speed. Again, PopMoney gets beat on speed. Money transferred will go to the recipient’s default payment method. If there is no method specified, it will go to the Google Pay balance. Money transferred to a debit card often happens within minutes, but it could take up to 24 hours depending on the bank. Bank account transfers can take up to three business days.

Safety. Google Pay offers Google Pay Fraud Protection which covers 100% of unauthorized transactions that are verifiable. Google Pay, like other services that offer P2P transfers, still recommends you only send money to people you know to avoid scams.

A transfer you make to someone who ends up scamming you could be considered authorized rather than unauthorized, and may not be covered. So, again, be careful with where you send money.

You need to report fraud within 120 days if you think you’ve been a victim of unauthorized payment activity. Google gives you double the amount of time to report fraudulent transactions compared with Popmoney.

Popmoney vs. Venmo

Venmo is a P2P payment service by PayPal. Money can be transferred from a Venmo balance, bank account, debit card or credit card. Compared with PayPal, Venmo has a more social interface because you can interact with users.

Fees. Using Venmo to transfer money with a bank account or debit card is free, $1 cheaper than Popmoney. Venmo lets you use a credit card for a 3% transaction fee.

Like PayPal, there’s an instant transfer option to move money from your Venmo balance to your debit card within 30 minutes. This feature costs an extra $0.25. Alternatively, standard ACH transfer from your Venmo balance to your bank account can take one to three business days.

Network reach. You need to live in the U.S. and have a U.S. bank account to transfer money from your Venmo balance. Venmo is not available through financial institutions like Popmoney.

Payment types. You can use a bank account, debit card, credit card, prepaid card or Venmo balance to transfer money. The credit card option is available (Popmoney doesn’t have this), but the convenience costs a 3% fee.

Speed. You can invest in instant transfer for $0.25 and get money faster here than you would from Popmoney. Otherwise, money comes in one to three business days, which is the same as Popmoney.

Safety. Similar to Popmoney, Venmo doesn’t offer buyer or seller protection, and the service takes very limited liability for mishaps. Payments for products or services are considered high risk and should be avoided. Both services are comparable as far as safety.

Popmoney vs. Square Cash

Square Cash is a mobile app known simply as the Cash App. You can send cash through debit card, credit card or from the balance you have in your Cash App account. You can pay through iMessage, Siri or Cash.me.

Fees. There’s no charge to send personal payments, making this option cheaper than Popmoney. However, personal payments sent through a credit card costs 3%. Standard deposits are free, but instant deposits cost 1.5%.

Network reach. The Cash App can be used in the U.S. only. If you are sent money through the Cash App, you’ll be asked to cash out by linking a bank account or debit card.

Payment types. Payments can be made with a debit card, credit card or the balance that you have in your Cash App.

Speed. There are two speeds that you can choose from — instant and standard. The instant deposit option sends money to your bank account right away and costs 1.5% for the convenience. The standard deposit happens within one to three business days.

Safety. The app offers security locks with two-step authentication that can prevent fraudulent transactions. However, like Popmoney, you need to be careful about who send money too because reimbursement for scams is not mentioned in the security terms.

Popmoney vs. Circle Pay

Circle was founded in 2013 and is a payment app that’s available in 29 countries. Circle Pay is the person-to-person cash transfer part of the Circle brand. Beyond Circle Pay, there’s Circle Invest and Circle Trade for investing and trading cryptocurrencies. You can transfer money using Circle Pay in U.S. dollars, British pounds, and euros with no exchange markups or fees.

Fees. Circle Pay doesn’t charge fees to transfer funds, although your credit card company may charge fees for a cash advance when using the app.

Network reach. Circle Pay has a farther reach than Popmoney because it’s something that you can use internationally. You can also use a credit card to transfer funds. Despite there being a possible cash advance fee from your issuer, it’s still an option not offered by Popmoney.

Payment types. You can use a debit card, credit card or bank account to make payments.

Speed. There’s an option to cash out instantly without a fee when depositing to a debit card.
Bank transactions can take one to four days, excluding holidays which is pretty much the same as Popmoney.

Safety. Circle Pay uses two-factor authentication and encryption to secure your account. There’s also reimbursement offered if an unauthorized transaction happens from your account. An unauthorized transaction is one that you did not initiate from your account. You must notify Circle Pay within 60 days of fraudulent transfers.

Same PSA applies here as with all the cash apps. The reimbursement comes into play if you did not authorize a payment. If you have authorized a payment for a product or service, and you’re duped by a seller, this transaction will probably not qualify for coverage.

Popmoney vs. Facebook Messenger

Over a billion people use Facebook per day on average. Sending and receiving money through this platform could be the most accessible for current users. There’s no need to sign up for another app when you use Facebook Messenger for payments.

Fees. It’s free to send and receive money through Facebook Messenger.

Network reach. You can send and receive money if you live in the U.S., France or United Kingdom. The preferred currencies are U.S. dollars, pounds and euros.

Payment types. You can send money using a debit card or Paypal account. To get started, you need to add one of these accounts to your Facebook messenger profile.

Speed. PopMoney has the edge here. Facebook Money transfers right away, but it may not show up in your account for five business days, depending on your bank.

Safety. According to Facebook, payments can only be made to family and friends. If they discover you’re making payments for business reasons, your account can be shut down. Facebook lists some popular scams here under commonly asked questions. Facebook works with users to identify users who are trying to swindle others.

People using Facebook Messenger to send or receive money may have to provide information to verify their identify like a legal name, date of birth, last four digits of their social and photo ID. This is more information than what’s required from a recipient through Popmoney making it a potentially safer option.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor here

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Reviews

Review of Edward Jones CD Rates

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

What are brokered CDs?

Edward Jones offers brokered CDs, which are a bit different from the standard bank-issued CDs that most investors are familiar with. Bank-issued CDs, as the name implies, are issued by individual banks for their customers. Since Edward Jones is a broker and not a bank, it cannot issue its own CDs. Instead, the firm offers a range of CDs issued by other banks and thrifts but sold via Edward Jones.

For the casual investor, it can be hard at first glance to tell the difference between bank-issued and brokered CDs. However, there are some important distinctions:

  • No early withdrawal penalties: Brokered CDs don’t have early withdrawal penalties. If you need to get out of your CD, you can usually sell it back to another investor through a brokerage firm. This means that brokered CDs carry some additional risk, as the price of these CDs may fluctuate on the open market.
  • Higher APYs: You can often get higher yields on a brokered CD than with a bank-issued CD. Brokers are able to negotiate higher CD rates since they can guarantee a large pool of buyers to CD issuers. In the era of online banking, however, even brokered CDs do not always garner the absolute highest rates.
  • Longer-term options: Brokered CDs often have longer-term options than are available with traditional bank-issued CDs, which are generally short-term investments only.

CD rates from Edward Jones

Edward Jones offers a fairly comprehensive range of CD maturities, ranging from three months to 10 years, although the firm doesn’t offer 6-year CDs, 8-year CDs or 9-year CDs. Rates and availability change frequently, oftentimes daily. The longer-duration CDs offered by the firm aren’t traditionally available at banks.
Edward Jones CD Rates
TermMinimum deposit to earn APYAPY
3 months$1,0001.95%
6 months$1,0002.00%
9 months$1,0002.00%
1 year$1,0001.95%
18 months$1,0001.90%
2 years$1,0002.05%
3 years$1,0002.15%
5 years$1,0002.20%
7 years$1,0002.45%
10 years$1,0002.60%

For all maturities, Edward Jones requires a $1,000 opening deposit, which is the same minimum required to earn the stated APY. As these are brokered CDs, there is no early withdrawal penalty. However, investors are subject to current market prices if they need to get out of a CD prematurely. If interest rates have risen since the date of purchase, you’re likely to get less money back than you originally invested in the CD.

One important difference between Edward Jones CDs and standard bank-issued CDs is that interest does not compound with Edward Jones CDs. All interest is paid directly into a money market or insured bank deposit at Edward Jones, unless you request it to be distributed. Either way, you can’t reinvest your distributions into your existing CD.

Unlike some banks, Edward Jones doesn’t offer any type of hybrid or alternative CD, such as a step-up CD or an adjustable-rate CD. There are also no bonus APR CDs available at the current time, just standard rates. Edward Jones also does not offer special rates for jumbo CDs, which traditionally require a $100,000 deposit. However, you can use the firm’s wide range of CD maturities for certain CD strategies, such as building a CD ladder. You can also buy their brokered CDs in an IRA.

Unlike bank-issued CDs, the brokered CDs offered by Edwards Jones do not automatically roll over into new CDs. At maturity, the banks that issued the CDs pay the proceeds to Edward Jones, which then forwards the money to your account. At that point, you can either select a new brokered CD to purchase, or keep the funds in your Edward Jones money market or insured bank deposit account.

How to get CDs from Edward Jones

You’ll need to open a brokerage account at Edward Jones to buy any CDs. The account minimum to open is $0, but as Edward Jones is a full-service brokerage, you’ll need to go into a branch and visit a financial advisor to open an account. There is no facility to open an account online.

You can open your Edward Jones account as rapidly as you can fill out the paperwork and fund the account. As soon as your deposit clears, you are free to buy a CD through your Edward Jones broker. If you change your mind, you can generally withdraw your funds within 4-6 business days after deposit, although this hold period may extend to 11 business days for new clients. Once you buy a CD, you can sell it at any time on the open market. As noted above, the amount you receive may be less than the amount you originally paid.

LEARN MORE Secured

on Edward Jones’s secure website

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How do CD rates from Edward Jones compare?

Edward Jones CD rates are well above the national average, but they still fall considerably short when compared with the best available rates nationwide.

Unlike with many firms, Edward Jones doesn’t currently have any special-rate CDs, where certain maturities pay dramatically higher rates. Instead, rates at Edward Jones land along a traditional curve, gradually increasing in yield as maturities lengthen.

For example, as of July 3, 2019, the Edward Jones 2-year CD rate of 2.05% is far below the best available 2-year CD rates. Three-year CD rates top out nationally at 3.00%, but Edward Jones pays 2.15%. The pattern continues throughout the maturity curve, with the top 5-year CD rates nationally hitting 3.00% or more, while the 5-year at Edward Jones pays 2.20%.

As such, all rates at Edward Jones fall in the general area of being well-above national averages but still notably short of the best available rates.

Overall review of CDs from Edward Jones

You won’t be wasting your time investing in CDs from Edward Jones, as you’ll be earning rates far above the national averages. You’ll also benefit from the ability to construct a CD or overall investment strategy with the assistance of a full-service advisor. However, if you’re looking for the absolute best CD rates for your money, there are plenty of online banks that can pay you a higher rate.

CD investors who like a wide range of products may be disappointed at Edward Jones, as popular options such as step-up or no-penalty CDs are not currently available. However, Edward Jones CDs do benefit from offering brokered CDs. This provides a range of flexibility that standard bank-issued CDs cannot offer, as you can liquidate your CD position at any time without paying an early withdrawal penalty.

The bottom line is that yield-hungry investors that enjoy managing their own portfolios may be better suited at any number of online competitors. Those looking to incorporate decent-yielding CDs into their overall investment portfolio with the help of a full-service broker might prefer working with Edward Jones.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

John Csiszar
John Csiszar |

John Csiszar is a writer at MagnifyMoney. You can email John here

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Reviews

Wealthfront Cash Account Review

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Fintech startups are challenging incumbents in every corner of the financial services industry. Robo-advisor Wealthfront is part of this trend, one of many new investing apps that also offer cash management accounts with high APYs and a mix of features offered by traditional bank accounts.

Cash management accounts combine features like easy access to your money and a decent interest rate, typically found separately in checking accounts and savings accounts, respectively.  Wealthfront admits that its Cash Account won’t replace your checking account, instead touting it as a place to stash your emergency savings or achieve other savings goals and enjoy a high 2.57% APY, all with the FDIC protections of a traditional bank account.

Wealthfront Cash Account Pros

Wealthfront Cash Account Cons

  • Offers a high APY compared to other online savings accounts
  • Charges zero fees, $1 minimum balance requirement
  • Deposits are covered by FDIC insurance up to $1 million
  • Ability transfer funds from Cash Account into Wealthfront's taxable investment account.
  • Takes 1-3 business days to access your funds
  • You cannot make payments from the account

Let’s take a closer look at how Wealthfront’s Cash Account compares to both traditional bank savings accounts, and similar cash management offerings from other fintech startups, so you can determine whether it’s right for your savings.

Wealthfront Cash Account vs. online savings accounts

Wealthfront markets its Cash Account as a place to deposit savings you plan on spending in the next five years, or as a good place for an emergency fund. For longer-term returns on your money, Wealthfront advocates investing in the stock market using its core robo-advisor functionality. As an additional incentive to do so, Wealthfront allows you to transfer money from your Cash Account into one of the company’s taxable investment accounts. However, there is nothing in Wealthfront‘s terms of service that would discourage you from treating this account like any other online savings account.

Here’s how Wealthfront’s Cash Account stacks up against the highest-earning online savings accounts from our best online savings accounts review:

Financial InstitutionAPYMinimum balance
Wealthfront

2.57%

$1 minimum, no monthly fee
Vio Bank

2.52%

$100 minimum, no monthly fee
Customers Bank

2.50%

$25,000 minimum, no monthly fee
Barclays

2.10%

None
Marcus by Goldman Sachs

2.15%

$1 minimum, no monthly fee
Ally

2.10%

None

Judged by APY alone, Wealthfront‘s Cash Account emerges as one of the strongest contenders out there, surpassed only by Vio Bank’s online savings account. Like many online savings accounts, there’s a limit to the liquidity of the money placed in Wealthfront‘s Cash Account.

However, there is no option to withdraw funds or make payments from the account via check or ATM card. Your only way to get money into and out of the account is via ACH transfers to and from a separate checking account that’s held in your name. Transfers take one to three business days, and Wealthfront permits an unlimited number of transfers into and out of your Cash Account (with a daily limit of $250,000).

Wealthfront is not a bank, so it has deals with a network of regional banks that are FDIC insured. After you deposit your money in a Cash Account, your funds are swept into multiple accounts with Wealthfront’s bank partners, giving you FDIC insurance coverage up to $1 million (or $2 million if you have a joint Cash Account). This a big advantage that makes the Cash Account an attractive choice for anyone who wants FDIC coverage beyond the $250,000 limit available with a single online savings account.

Wealthfront Cash Account vs. robo-advisor cash management accounts

Many other robo-advisor firms offer cash management accounts. These accounts take varying forms: Some resemble a personal savings account, others have both savings and checking account features, while some are a type of investment account. Below we compare the Wealthfront Cash Account with cash management offerings from robo-advisors Betterment and SoFi.

Account nameFunctionFeesYield
Wealthfront Cash Account

FDIC-insured savings account

None

2.57% APY

Betterment Smart Saver

Low-risk bond investments

0.25% annual fee

2.14% APY

SoFi Money

FDIC-insured checking/savings hybrid account

None

An average of 2.25% APY

Wealthfront Cash Account vs. Betterment Smart Saver

Betterment‘s Smart Saver account is a low-risk investment account, not a deposit account, so it plays by a different set of rules than Wealthfront‘s Cash Account. For one, as an investment it does not have FDIC coverage. Betterment‘s website claims you could earn returns of 2.14% (which factors in the standard 0.25% Betterment charges for its services) — notice the word “could.” Money placed in the Smart Saver account is invested in a mix of treasuries and corporate bonds—fairly safe investment vehicles—but it still can’t guarantee the 2.14% return in the same way a deposit account can guarantee an APY.

The Smart Saver account does have some bells and whistles that may make it an appealing choice for your savings. These include:

  • Smart Sweep: This feature aims to maximize your investing returns by only maintaining as much cash in your linked checking account as you need for day-to-day spending. It works like this: After giving  access to your checking account, the app analyses how you spend money. Then it sweeps money above and beyond what you need to pay 35 days of expenses — up to $5,000 per sweep — into the Smart Saver investment account. Likewise, if the app thinks you’ll need more money to cover your expenses, it will sweep money from the Smart Saver investment account into your checking account. You can read more details here.
  • Tax relief: While you can’t avoid paying taxes entirely, the fact that 80% of the money placed in the Smart Saver investment account will be invested in U.S. Treasury bonds means that some of the earnings from the Smart Saver account won’t be subject to state and local taxes. You can read more details here.

Like Wealthfront’s account, there is an inconvenient waiting period to withdraw money from the account — four to five business days, which is longer than Wealthfront‘s one to three business days. This longer period accounts for the fact that your money is invested in bonds, making it less liquid than funds placed with Wealthfront in FDIC-insured deposit accounts.

Wealthfront Cash Account vs. SoFi Money

SoFi Money is a checking and savings hybrid account, meaning you earn both a high yield — 2.25% APY vs. Wealthfront‘s 2.57% APY — and enjoy instant access to your money with a debit card and paper checks.

Similarly to Wealthfront, SoFi Money spreads any funds you deposit across multiple FDIC-insured bank accounts — six in this case — providing up to $1.5 million in FDIC insurance vs. Wealthfront‘s $1 million.

SoFi Money may lag behind Wealthfront in terms of APY, but it makes up for this by providing the utility of both a savings and checking account. You can use your debit card to make purchases and withdraw money from ATMs (there is a daily limit of $610) just like you would with any other checking account. You can read more details on SoFi Money in our review.

Who should get a Wealthfront Cash Account?

If you’re looking for an FDIC insured account that provides one of the highest APY’s available, than the Wealthfront Cash Account may be right for you. However, you won’t have easy access to your funds like you would with a hybrid checking/savings account, such as SoFi Money. However the simplicity of the account, and the promise of additional features in the future such as a debit card and ATM withdrawals, could make it a compelling option for your savings.

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James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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