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Interest rate for Cash Accounts

What's the interest rate for my Wealthfront Cash Account, and how does it work?

The annual percentage yield (APY) for Cash Accounts is 4.00% as of December 27, 2024. This is not a promotional rate, there's no minimum balance you need to maintain to earn it, and no maximum balance to which it can be applied.

Keep in mind that the current APY is subject to change. Learn more about what impacts our APY.

How is interest calculated?

You earn interest daily, based on your account balance and the APY at the end of that day. 

APY compounds monthly, which means you’ll receive interest payments on the first business day of each month.

Because interest accrues daily, it can vary from month to month. For example, months with a different number of days can have slightly different payouts, even if the account balance and APY are unchanged. Likewise, if the APY or account balance changes, your daily accrual will be impacted going forward, resulting in a different monthly payout.

If you currently have a Cash Account, you can see what you’re on track to earn this month by going to your Cash Account and selecting $X interest earned

When does interest get paid out?

You’ll receive the previous month’s interest on the first business day of the next month. 

We only process interest payments on business days, so if the first of the month falls on a weekend or holiday, you may not receive your interest payout until a few days into the month. Keep in mind that when this happens, you’ll still earn interest on your payout starting on the 1st of the month.

Also, it can take time for interest payments to process. Sometimes interest payments aren’t deposited until later in the day.

Why aren’t my interest earnings updating in the app or on the website? 

Similar to how we process interest payments, your pending interest only updates on business days. 

Your $X interest earned page won’t update during weekends or holidays. Interest for those dates will either already be included in your total, or will be added all at once after the next business day. Check the Wealthfront app or website for details.

What if I withdraw funds before I’m paid interest?

Because interest accrues daily, you’ll earn interest on however many days the funds were in your Cash Account. If you withdraw the funds or close your account, you’ll still receive any pending interest you’ve earned up until the withdrawal date.

When does the APY change, and how are these changes applied?

Our rate is primarily impacted by movement in the federal funds rate.

We generally adjust our interest rates in line with Federal Reserve rate changes. However, it's important to note that other factors also influence the rates we offer, and as such, our rates may change depending on various economic and financial considerations. Learn more

We’ll email you whenever we change your rate. You can also see the current APY from your account dashboard. 

If your APY changes, the updated APY will be applied on a daily basis moving forward. For example, if the APY changes halfway through the month, the previous APY would be applied to the first half, and the updated APY would be applied to the second. 

Do I pay taxes on the interest I earn?

Yes, and if you earn more than $10 of interest within a calendar year, we’ll provide form 1099-INT during tax season. For specific tax questions or help with filing, please consult your tax advisor.

How can I estimate my monthly interest payment?

To estimate a monthly interest payout:

  1. Convert your APY to the equivalent APR

    APY is a compound annual rate, which means it factors in the interest you earn throughout the year. First, you’ll need to convert it to the equivalent APR, which is a simple annualized rate. You can do this using an online calculator, or by plugging your APY into the following formula:
    ((1+APY)1/12 -1)*12

    For example, an equivalent APR for the current 4.00% APY would be:
    ((1+0.0400)1/12-1)*12 = .039285 or 3.9285%

  2. Convert your APR to a daily accrual amount

    Once you have your equivalent APR, multiply it (in decimal form) by your average monthly balance, then divide it by the number of days in the year. This gives you a daily accrual amount. Keep in mind that leap years, like 2024, have 366 days.

    For example, the daily accrual on a $30,000 balance at 3.9285% APR would be:
    (.039285*30,000)/365 = $3.2289

  3. Multiply the daily accrual by the number of days in the month

    To estimate your monthly payout, multiply the daily accrual by the number of days in the month.

    For example, the February payout on a $30,000 balance at 4.00% APY would be:
    3.2289*28 = $90.41

Keep in mind, the interest you earn each day is based on the end-of-day account balance and APY. So if your balance or APY changes throughout the month, your daily accrual will change accordingly.  

 

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The national average interest rate is based on FDIC.gov, as of December 27, 2024. National rates are calculated based on a simple average of rates paid (uses annual percentage yield) by all insured depository institutions and branches for which data are available. Savings and interest checking account rates are based on the $2,500 product tier.

The Wealthfront Cash Account Annual Percentage Yield (APY) is as of December 27, 2024. The APY may change at any time, before or after the Cash Account is opened. The APY for the Wealthfront Cash Account represents the weighted average of the APY on the aggregate deposit balances of all clients at the program banks. Deposit balances are not allocated equally among the participating program banks.

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”).

The cash balance in the Cash Account is swept to one or more banks (the “program banks”) where it earns a variable rate of interest and is eligible for FDIC insurance. FDIC insurance is not provided until the funds arrive at the program banks. Wealthfront uses more than one program bank to ensure FDIC coverage of up to $8 million for your cash deposits. FDIC insurance coverage is limited to $250,000 per qualified customer account per banking institution. For more information on FDIC insurance coverage, please visit www.FDIC.gov. Customers are responsible for monitoring their total assets at each of the program banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits at program banks are not covered by SIPC.

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.

Wealthfront, Wealthfront Advisers and Wealthfront Brokerage are wholly owned subsidiaries of Wealthfront Corporation.

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