Lot of these HYSA accounts mislead with FDIC claims. For example, Wealthfront keeps money at partner banks which are FDIC insured. So if a partner bank fails, you will get money back but if Wealthfront fails, there is no insurance. That is the reason they provide high yields, there is no free lunch. Best to keep money money in short term t-bills via reputable brokerage.
what about marcus / goldman?
Unless they have their own bank like Sofi, it is same thing. I have not checked for Marcus.
Marcus has their own bank, Goldman Sachs Bank USA, that manages Marcus. It is FDIC insured.
This is so illogical. Wealthfront is just a front end. It will not hold your funds. The routing and account numbers are provided by Green Dot and it’s FDIC secured. How do you think Wealthfront will fail and in what context?
Lol. Just routing the money is done by money market funds. Apart from that everyone taking money deposit, use it to leverage up for other things.
What about credit unions and Ally?
Anyone know about UFB direct?
Folks, do not worry about losing your money at any FDIC insured bank. FED will not allow any depositor bank to fail to return your money to you. If a bank/institution fails and doesn’t return the funds to depositors, a bank run will follow in the whole US, collapsing the system. FED will not allow that spark to ignite.
This post makes no sense. The money is held by insured partner banks and backed by the government.
If Wealthfront fails, there is no insurance. Insurance is only if underlying partner bank fails.
What is your theory as to what would happen if wealthfront fails? They can’t take customer deposits out of partner banks to create solvency.
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I've actually been thinking about keeping my emergency fund in wealthfront, will need to look more into it. Thanks!