You could earn 25 times as much interest on your money with this new savings account
Make It There's a new leader when it comes to savings account interest rates. Lowered the deposit on optionsa fintech company that provides automated investment options and financial planning, raised interest rates offered on its new high-yield cash account to 2.
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With the national average saving account interest rate at 0. And the best part?
You don't need a high balance to start earning the 2. It takes just a dollar to sign up and there are no fees. You also don't need to be a current Wealthfront customer to take advantage of the account either. It's a similar sign-up process as for a savings account with Marcus by Goldman Sachs 2.
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The fine print Wealthfront's interest rates are very high, but if you have a lot of cash, there may be better savings options. While Wealthfront's cash account doesn't have any hidden fees, it helps to know how it works.
Once your cash is at the partner bank, the insurance kicks in so you can rest assured your money is safe.
As for the way it earns money, Wealthfront takes a "small portion" of the interest, according to the company. It also keeps costs low by using automation. The cash account accrues interest on a daily basis and shows up at the end of each month. Wealthfront says the interest on this account compounds monthly.
Last, you will likely receive a tax form when using this account. By law, interest earned in savings accounts is taxable. But you may not have received a notice in the past because your interest rate was so low. If you earn less, you may not receive the form, but you are technically required to report any interest to the IRS.
What are options?
The advantage of high-yield savings Online banks, and now fintech companies like Wealthfront, are leaving traditional brick-and-mortar banks in the dust when it comes to the interest rates offered on savings accounts. Yet many Americans have no idea. A full 62 percent of people surveyed by WalletHub last year did not realize online-only banks tend to offer higher rates and lower fees. Online banks offer savings options with interest rates that are roughly six times higher, on average, lowered the deposit on options local banks and credit unions nationwide, according to an analysis by DepositAccounts.
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Depending on what state you're in, the difference can be even more dramatic. Oklahoma offers the highest average interest on a savings account, at 0.
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Arkansas brick-and-mortar banks offers the lowest average: 0. How to bank online "People are still a little worried about online banking or Internet-only banks," Ken Tumin, founder of DepositAccounts.
The safety and security of these banks is one concern people have, he says, and the other, perhaps more common, worry is how much access you have to your money.
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It can be a real sticking point: One in four people say they wouldn't open an account with a bank that doesn't have at least one physical branch near by. Yet online banks offer workarounds.
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You may not be able to have conversations with a teller, but with Wealthfront, you can email with questions. And Marcus, for example, offers a live chat feature that connects you with a savings specialist seven days a week.
Online savings accounts can be a great option for emergency savings that you don't want to be easily accessible.
To deposit money, generally, you can set up a direct deposit from your paycheck into the online savings account, or you can transfer money to it from another bank account. If you need access to your money, Wealthfront says how can you make money on internet traffic takes one to three days for it to be transferred to your bank account.
There are a few more things you need to do after your offer gets the green light. This guide will walk you through what to do next. Make Your Earnest Money Deposit When you enter into a contract with a seller, they may expect you to offer an earnest money deposit. So, what is earnest money?
It's working on a way for current customers to move money between their cash and investment accounts. Additionally, Wealthfront says it's considering adding future features to its cash account that include debit card and ATM access, direct deposit, bill pay, checks and mobile check deposit.
Overall, Tumin says, "Opening a savings account at an online bank is often the easiest and best way to take advantage of higher rates.