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Money market funds
What are money market funds?
Money market funds (also called money market mutual funds) are a type of mutual fund that invests in highly liquid, near-term vehicles. These include cash, cash equivalent securities, and high-credit-rating, debt-based securities with a short-term maturity (like U.S. Treasuries). Money market funds work to offer investors high liquidity with a very low level of risk.
What money market fund options are available for my Cash Account?
You can currently allocate funds to the Wealthfront Treasury Money Market Fund (WLTXX), Wealthfront’s money market fund. Your allocation in the money market fund will be included in your Cash Account’s total balance, but won’t be included in the available balance.
Read more about the fund: Introducing WLTXX, Wealthfront’s Money Market Fund
An investor should consider the investment objectives, risks, and charges and expenses of the Wealthfront Treasury Money Market Fund (WLTXX) carefully before investing. A prospectus which contains this and other information about the fund may be obtained by calling 844-995-8437 or emailing support@wealthfront.com. The prospectus should be read carefully before investing.
How do I add or remove money market funds into my Cash Account?
To invest in money market funds in your Cash Account, you will need to first create a money market funds category.
To do so, click into your Cash Account and if you have not created a Category before, you will see a prompt at the top of your dashboard to add one. If you already utilize this feature, click into the Categories prompt and you will see the option to add a money market fund category.
Once your money market fund category is set-up, to add or remove money market funds, click Transfer Money and then Transfer.
Is there a minimum required to invest in money market funds?
There is no minimum required to invest.
Can I spend or transfer from money market funds?
No, you won’t be able to spend directly from money market funds, use your Wealthfront debit card with them, or transfer them to an external or Wealthfront investment account.
To access your invested cash, reduce your allocation — this will move money back to your cash balance (ie. cash in categories and your uncategorized cash). Moving these funds may take 1-2 business days to complete.
Will money market funds display as a part of my available balance?
No, money market funds are not part of your available balance. You can confirm your money market fund balance by following these steps:
- Log in and navigate to your Cash Account
- Click on your available balance
- Scroll down to see your Money market fund balance
Here’s an example of how your Cash Account balances might look:
If all my cash is held in money market funds, will money automatically be deposited there?
No, money will still be deposited to the uncategorized section of your Cash Account. You must allocate any cash to money market funds yourself.
Is there a limit to the number of times I can transfer to or from money market funds?
No, there is no limit to the number of times you can transfer between your main Cash Account balance and money market funds.
Are money market funds FDIC insured?
No, money market funds aren’t FDIC insured. They’re covered by the Securities Investor Protection Corporation (SIPC) up to applicable program limits. Learn more about SIPC.
How will money market funds appear on my Wealthfront Cash Account statements?
If you hold any money market funds, there will be a money market fund section on your statement.
What tax document will I receive for the dividends earned from money market funds?
If you received dividends during the calendar year, you will receive a Consolidated Form 1099, which will include a 1099-DIV for dividends paid as well as a 1099-INT for any interest earned through program banks.
Since WLTXX is primarily invested in US Treasuries (and other tax-exempt loans), income earned from WLTXX is generally exempt from state and local taxes.
Please reference the “Mutual Fund and UIT Supplemental Information” section of your Consolidated Form 1099 for a percentage of income from US Government securities.
How long will it take for money market funds in my Cash Account to be invested?
Once you initiate a transfer, it typically takes 1-2 business days for funds to be invested.
Although the Wealthfront Treasury Money Market Fund (ticker: WLTXX) (the “Wealthfront Money Market Fund”) seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee that it will do so. Investments in the Wealthfront Money Market Fund are securities and are not insured by the FDIC, carry no bank or government guarantee, are not deposits, and are subject to investment risk, including loss of principal amount invested. The Wealthfront Money Market Fund sponsor is not required to reimburse the Funds for losses, and you should not expect that the sponsor will provide financial support to the Wealthfront Money Market Fund at any time, including during periods of market stress.
Investment advisory services are provided by Wealthfront Advisers LLC (“Wealthfront Advisers”), an SEC-registered investment adviser, and brokerage products and services are provided by Wealthfront Brokerage LLC (“Wealthfront Brokerage”), member FINRA/SIPC. Wealthfront Software LLC (“Wealthfront Software”) offers a free software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Wealthfront Strategies LLC (“Wealthfront Strategies”) acts as the investment adviser to the Wealthfront Treasury Money Market Fund. The Wealthfront Money Market Fund is distributed by IMST Distributors, LLC.
Investing involves risk. Principal loss is possible.
The Wealthfront Money Market Fund is a money market fund that seeks to provide a competitive yield with low risk and high liquidity by investing primarily in debt securities issued by the US Treasury. These dividends are generally exempt from state and local taxes. The expense ratio is 0.25%.
The Wealthfront Money Market Fund pays Wealthfront Strategies an annual management fee of 0.25% of its average daily net assets. Wealthfront Strategies’s receipt of this fee presents a conflict of interest in that any investment you make in the Wealthfront Money Market Fund will result in additional compensation for Wealthfront Strategies, which may benefit Wealthfront Brokerage and its affiliates. Please see the Cash Sweep Disclosure Statement to learn more about Wealthfront Brokerage’s Cash Sweep Program.
Wealthfront Brokerage is a member of Securities Investor Protection Corporation (“SIPC”), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). SIPC does not protect against losses from market fluctuations. An explanatory brochure is available at sipc.org.
The information contained in this communication is provided for general informational purposes only, and should not be construed as investment or tax advice. Nothing in this communication should be construed as a solicitation, offer or recommendation to buy or sell any security.
Wealthfront Advisers, Wealthfront Brokerage, Wealthfront Software, and Wealthfront Strategies are wholly owned subsidiaries of Wealthfront Corporation.
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