Interest rate for Cash Accounts

The annual percentage yield (APY) for Cash Accounts is 5.00% as of November 3, 2023. This is not a promotional rate, and you don’t have to maintain a certain balance to earn it.

How is my interest calculated?

Interest is calculated on the entire balance of your Cash Account and accrues daily while compounding monthly.

How can I estimate my monthly interest payment using the Cash Account’s APY?

To estimate how much interest you will receive for a given month, first convert the APY to a monthly interest rate (since interest compounds monthly at Wealthfront) using this formula: ((1+.05)1/12-1)*12. After converting the APY to a monthly interest rate, multiply that figure by your starting account balance and divide the result by 366 (because 2024 is a leap year) to calculate the estimated daily interest. Finally, multiply the estimated daily interest by the amount of days your funds were at Wealthfront for that month.

For example, we can estimate that the interest payment on a \$30,000 balance, earning 5% APY, during a 30-day month would be about \$120 by inputting:
((1+.05)1/12-1)*12= .048889
(.048889*30000)/366 = 4.007
4.007*30=\$120.21

Note that this calculation is an estimate, and actual interest payments can vary.

When does the rate change?

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 in your account dashboard.

When is interest paid to my account?

We typically credit your account with the interest you earned during the previous month by the end of the first business day of the following month.

For example, all of the interest that accrued in November should be credited to your account by the end of the first business day in December.

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

If you withdraw cash before interest is paid to your account, you’ll still earn interest on the withdrawn amount for the time the funds were at Wealthfront. This interest payment will arrive at the usual time (the first business day of the following month).

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.

The national average interest rate is based on FDIC.gov, as of July 28, 2023. 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 July 28, 2023. 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.