Traditional Checking Accounts Pay Out Nothing. This Surprising Option Pays 9x the Average
A lot has happened this year, including the fact that interest rates have bottomed out at near zero.
And they’re likely to remain at historic lows for years as the economy fights its way back from the coronavirus pandemic, according to the Federal Reserve. What’s that mean for you? Let’s take the good with the bad.
Thumbs up: It’ll be cheaper to borrow money for your next car, house or major purchase, whether that’s a bathroom renovation or a Jet Ski.
Thumbs down: Your bank is probably paying you virtually no interest. We’re talking pennies. As of early October, the national average interest on checking accounts had dropped to a lowly 0.04% APY, per the FDIC.
So what if you want to earn some real interest on the money you’re banking? The problem is, that’s likely not going to happen at a traditional bank.
Instead, it could be time to upgrade to the fee-free Wealthfront Cash Account. It does everything a checking account does — but it’ll pay you nearly nine times the national average, and you can get paid up to two days early when you direct deposit your paycheck.
How to Earn Nearly 9x the National Interest on Your Money
Wealthfront Cash is a new high-interest checking offering from Wealthfront, a popular banking service. It’s been taking off. So far, Wealthfront has paid its clients more than $115 million in interest from the Cash Account.
You can use Wealthfront Cash like a regular checking account. It’s easy to set up direct deposit — and you can even get paid two days early.
You also get a debit card that works at 19,000 fee-free ATMs across the U.S. Additionally, it’s easy to pay your bills and set up automatic payments. You can even link your account to Venmo or PayPal and deposit checks through the Wealthfront Cash app.
Wealthfront won’t charge you any monthly or maintenance fees — or any account fees at all, really. There is no overdraft option, so you don’t have to worry about overdraft fees, either.
Now, is your money really secure with Wealthfront? Oh yeah. It’s actually extra-secure. At a traditional bank, the FDIC insures your holdings up to $250,000. But Wealthfront works with multiple third-party banks that each provide FDIC insurance on deposits. That way, Wealthfront insures your deposits up to $1 million.
Although traditional banks have basically stopped paying customers interest on their money, you don’t have to settle for that. It only takes $1 and a few minutes to open a Wealthfront Cash account.
Mike Brassfield (mik[email protected]) is a senior writer at The Penny Hoarder.