Wealthfront high-yield savings account increases money by 2.57% a year

The main purpose of a savings account is to keep the money that you do not use today safe and accessible. If you choose an account that earns at least 2% interest, you can beat inflation to grow that money.

Dozens of financial institutions offer high-yield savings accounts, but the Wealthfront investment application is leading the pack with one of the best APY – 2.57 % at the time of writing this article.

Not only does it pay out 25 times more than your usual savings account, but the Wealthfront Cash Account is free, requires a minimum opening deposit of $ 1, allows unlimited transfers and is insured up to $ 30. $ 1 million by the FDIC. True to its roots as a robotic advisor, the Wealthfront cash account is only accessible online and via the mobile app.

Wealthfront recommends using its high-yield savings account to store the money that will be used within five years, that it's a fund of funds. 39, emergency, a down payment for a house or an upcoming expense. For long-term growth, you can use Wealthfront's investment platform to invest in low-cost index funds with as little as $ 500, set up and contribute to an IRA, or save on a plan of 529 colleges.

To see how an initial deposit of $ 1,000, to which monthly contributions of only $ 100 could be added, could increase over five years in Wealthfront's high-yield savings account, we have integrated these figures into the compound interest calculator from Investor.gov. Wealthfront does not offer a checking account, but you can easily set up automatic transfers from another bank to regularly contribute to the high yield savings account.

Below, you will see the start and end balances each year, as well as the total additional contributions paid during the year. Note that interest on this account is compounded monthly.

Also note that the calculation badumes a constant APY of 2.57%, even if it is unlikely to remain unchanged over a five year period as interest rates are likely to change according to inflation and the government reference rate.

Choosing the account with the highest interest rate today is a good decision, but be aware that the rate offered to open the account is not blocked. In short, make sure the account fits your needs before putting your savings.

Overall, high yield savings accounts offer better rates than traditional savings accounts, hence high returns. So you have already made progress in the automatic constitution of wealth by keeping your money there, regardless of the evolution of the rate over time.

Learn more about the Wealthfront Cash Account »