If you asked me how much I’m earning in interest on my savings account, I couldn’t tell you. What I do know, is that the numbers on my statement next to the word “interest” are in cents. Not dollars. I had a hunch that I wasn’t the only one totally baffled by those evasive interest rates on traditional savings accounts, so we ran a poll and discovered that 46.5% of respondents also have no idea what their interest rate is.
Needless to say, this is a problem. Not only is there a lack of understanding around how much you’re earning on your cash with traditional banks, but there can also be all sorts of additional fees layered on top — account fees, management fees, overdraft fees, to name a few. Your bank is definitely earning money on your cash, so why shouldn’t you? This got us thinking: there’s got to be a better way to save.
Enter Personal Capital Cash¹
At Personal Capital, we’ve seen firsthand how unrealized interest can impact people’s net worth: As of June 6, 2019, our 2 million dashboard users have over $41 billion in cash sitting in savings, checking, or money market accounts. If they’re earning the national rate on those accounts², that means they’re losing out on hundreds of millions annually that they could be earning in interest by keeping their cash in a high-yield account.
We couldn’t just sit by and let you lose out on all that interest, so we recently introduced Personal Capital Cash, offering a new high-yield account starting at 1.55% APY³. And it’s not just for our current users or wealth management clients, it’s for everyone. You deserve more from your money.
What’s Different About Personal Capital Cash?
The way we save is broken. Personal Capital Cash is very different than other accounts you’re used to — with an APY that is 23x the national rate, up to an aggregate of $1.5 million in FDIC insurance⁴, no account minimums, no fees, and flexible deposits and transfers, it does more than just stash your cash.
Here’s what that actually means: Personal Capital Cash offers more than just a higher rate (which is pretty awesome). It’s a way to save that gives you transparency, ease of use, security, and flexibility — without all of the “gotchas” you’re used to.
Your money is hard earned, and Personal Capital Cash can help you make every penny count. Don’t just save your cash — you should also be earning on it.
How Much Should I Be Saving?
No matter where you put your money, saving is hard, and saving confidently is even harder. We all have saving goals — both shorter-term and longer-term, and there are no shortage of places to put your savings — retirement accounts, debt paydown, college savings, bank accounts, the list goes on.
So to resolve the question of how much you are currently saving vs. how much you should be saving and where, we’re also unveiling a new feature of the Personal Capital Dashboard: The Savings Planner.
Savings Planner is the perfect sidekick to Personal Capital Cash. It’s here to help you understand the role of saving in the context of your holistic financial picture. This includes not only how much you should be saving, but also where you should be saving and how to balance different savings objectives. So for example, if you have too much allocated to your emergency fund, savings planner will recommend where to move your extra cash to best meet your savings goals.
Earn More Now
Personal Capital Cash is a safe, flexible, and high-yield place to park your savings, and Savings Planner helps you understand how much you should be saving and where. It’s a powerful combination, and we’re excited to share it with you.
Sign up in just a few easy steps to start saving smarter with Personal Capital Cash and Savings Planner.
Not already using Personal Capital? Sign up for free to open your Personal Capital Cash account.
1. Personal Capital Cash is offered through Personal Capital Services Corporation (Personal Capital), which is not a bank. To participate in the program, you must open an account at UMB Bank, n.a., Member FDIC, through which your funds will be placed in accounts at participating program banks. The advertised interest rates are paid by participating program banks, not by UMB. Your funds will be FDIC insured up to applicable limits while in transit through UMB Bank. Personal Capital receives a fee from each Program Bank in connection with the Program that is based on the aggregate daily closing balance of deposits held in Program Accounts by such Program Bank. The fee may vary from Program Bank to Program Bank and will generally increase as the aggregate amount of funds held in Program Accounts with the Program Bank increases. See additional disclosures here.
2. The national rate is calculated by the FDIC as of June 11, 2019 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 account rates are based on the $2,500 product tier. Account types included in the FDIC calculation are those most commonly offered by the banks and branches for which they have data – no fewer than 45,000 locations and as many as 81,000 locations reported. The deposit rates of credit unions are not included in the calculation. Visit www.FDIC.gov for details. In this calculation, we are using the current national rate of 0.01%. Hundreds of millions in lost interest assumes the Personal Capital Cash interest rate of 1.55%.
3. The Personal Capital Cash Annual Percentage Yield (APY) as of October 2019 is 1.55% APY. The calculation for APY is rounded to the nearest basis point. Both the interest rate and APY are variable and subject to change at our discretion at any time without notice.
4. FDIC insurance up to $250,000 (including principal & interest) per depositor per program bank. The cash balance you place through the program is swept to one or more program banks where it earns a variable rate of interest and is eligible for FDIC insurance. If the number of program banks changes, the aggregate amount of available FDIC insurance could be higher or lower. If you have deposits at a program bank, you should consider electing not to use that bank by following the opt out instructions we provide. If you do so, the aggregate amount of FDIC insurance available to you will be lower. If you do not do so, your existing deposits and deposits through Personal Capital Cash at that program bank will be combined for the purposes of FDIC coverage, which could result in some of your funds at that program bank being uninsured.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. Funds you place through Personal Capital Cash are not covered by SIPC.
There are no limits on the number of deposits or withdrawals you can make under the program. The maximum deposit limit per transaction is $250,000. The daily withdrawal limit is $100,000. For security reasons, there may be other limits on the amount, number, frequency, or destination of deposits or withdrawals you can make under the program. Transaction limits are subject to change at our discretion at any time.
Any reference to advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital Corporation. Personal Capital Advisors Corporation is a registered investment advisor with the Securities Exchange Commission (“SEC”). SEC registration does not imply a certain level of skill or training. Past performance is not a guarantee of future results, nor is it indicative of future performance. All investments involve risk, including the potential for loss of principal.
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.