Free Personal Capital Savings Account
This Personal Capital Cash management review quickly outlines the main features of the Personal Capital savings account and compares these to the offerings of other savings and cash account providers. This review’s verdict is that the Personal Capital Cash account may be a good match for people looking to grow their savings and build a respectable size money cushion. However, this account may not work if you’re seeking bill pay or direct deposit.
Being financially healthy means that your wealth is balanced across investing and saving, liquid and non-liquid assets. So, keeping some of your wealth in cash that is easily accessible is a sound money habit – you are very likely to need this cash for opportunities or emergencies within the next twelve months. Because life happens to all of us.
And here is the problem: the typical place to keep your cash easily accessible is in a savings account, and savings account interest rates have been low recently.
A combination between very low interest and fees means that you’d be better off keeping your cash under the mattress (not really, just making sure you are still paying attention) or at least not worse off by keeping it in your checking account.
That said, I still believe in savings accounts and have a couple of those myself. Call me an optimist but I’m still in a quest to research and share with you, savings accounts that stand out in the present environment.
This Personal Capital Cash account review will delve into the main features and benefits and compare them with other savings accounts provides, e.g., M1 Cash, Betterment Everyday and Wealthfront Cash. This Personal Capital Cash review will help you decide which one meets your needs best.
What is Personal Capital Cash?
Personal Capital Cash is a savings account boasting relatively high-interest rates, no fees or minimum balance requirement, and unlimited monthly transfers.
Personal Capital offers this account along with a large array of personal finance services, including free Personal Capital software and paid Personal Capital Advisors.
The free Personal Capital Cash account adds to the allure of this full-service digital investment advisor.
Personal Capital Cash Account Features at a Glance
Here is a summary of the main features of the Personal Capital Cash account:
|Overview||A savings account|
|Savings rate (subject to change)||1.55% APY for all; 1.60% APY for Advisory clients|
|FDIC insurance||Yes – $1.5 million for solo accounts and $3.0 million for joint accounts|
|Minimum account balance||$0|
|Deposits and transfers||Unlimited|
|Direct deposits||No, only ACH transfer|
Personal Capital Cash Features – Drill Down
Let’s introduce the features of the Personal Capital Cash that will help you make up your mind about whether this is an appropriate savings account for you.
What is the Personal Capital Cash interest rate?
At present, Personal Capital Cash accounts boast 1.55% APY on ‘normal’ accounts and 1.60% APY for advisory clients. I know, 1.55% doesn’t sound like a high savings rate, but it is considerably higher than the average current national savings rate, approximately seventeen to twenty times higher, according to the Personal Capital website.
This rate is subject to change and is influenced by current market interest rates. So, if interest rates go up, so will the return on your Personal Capital savings account.
What are the Personal Capital Cash Fees?
There is no fee for opening and managing a Personal Capital Cash account.
To quote the company’s publicity material about this savings account:
‘No fees. Not now, not ever, not for anything.’
Which pretty much sums it up.
How much is Personal Capital Cash FDIC insurance?
If you’re wondering, “Is a Personal Capital Cash Account safe?” it is.
Your money in a Personal Capital Cash account is FDIC insured (Federal Deposit Insurance Corporation).
“Not only is your money insured by the FDIC, you also get 6x the coverage of what most banks offer — up to an aggregate of $1,500,000,” ~Personal Capital website
Although, FDIC insures up to $250,000 per depositor, per institution and ownership category, Personal Capital spreads your money across several banks, in order to offer a higher limit of FDIC insurance.
If you open a joint account, you’ll receive double the FDIC insurance coverage, up to $3 million.
So, Personal Capital is safe to use, as your money is insured.
What is the minimum balance on the Personal Capital savings account?
There is no minimum balance required for the Personal Capital Cash savings account. You can open an account with nothing in it and add cash to grow the balance from there. Since the interest is compounded daily, your cash grows more quickly, than less frequent compounding.
Is there a Personal Capital Cash mobile app?
Yes, there is a mobile app. You can download the Personal Capital Cash app free, and it had very good reviews on its functionality, reliability and ease of use.
How many deposits and transfers per month are allowed?
There is no limit on the deposits and money transfers you can make per month.
Can I use direct deposit or bill paying with Personal Capital Cash?
Ah, I thought you might ask that.
If you thought that Personal Capital Cash account is too good to be true, this is where some of its potential problems start coming to light.
You cannot direct deposit into a Personal Capital Cash account, and the only way to deposit money is through ACH transfer (this stands for Automatic Clearing House transfer and this is a transfer between banks and bank accounts). It means that you must have a bank account to be able to make a transfer.
You cannot pay bills directly from your Personal Capital Cash account, either. It may sound a bit harsh, but you must remember this is a savings account. We could see the Personal Capital Cash account as a modern-day Piggy bank – you use it to store some of your cash for a higher than average interest rate. Remember a main function of a savings account is the opportunity for liquidity and ready access to your money.
Personal Capital Branches and ATM access
There are no branches, and you can access and manage your account through the mobile app or the Personal Capital website.
Furthermore, you don’t get a card with this account, so you cannot access ATMs – any withdrawals must be to a bank account.
How is Personal Capital Cash customer service?
Since the Personal Capital savings account is new, we’re unsure of the customer service for the specific cash account product. In general, Personal Capital has excellent customer service and is easy to access by phone during normal business hours and email. Account holders can contact customer service by logging into their account and sending a message.
How does Personal Capital Cash Work?
Here’s how to open a Personal Capital savings account.
Go to the Personal Capital website.
From the menu, select ‘Cash management’ and ‘Personal Capital Cash’.
Once you are on the Personal Capital Cash account page, click on the ‘Earn more today’ button. It gets you to a simple form you need to fill in to sign up for a savings account.
You’ll be asked to provide:
- Your name and birthdate;
- Contact information such as an address, telephone number and e-mail address;
- Social Security and Tax Identification number; and
- Government-issued ID.
To be eligible for a Personal Capital savings account, you must:
- Be over 18 years old;
- Have a valid Social Security and Tax Identification number;
- Be a US citizen or resident alien;
- Have a valid passport or state-issued ID;
- Not be subject to backup withholding by the IRS; and
- Have a phone that can receive SMS.
When applying for Personal Capital Cash, you’ll also be opening an application with Personal Capital’s partner – UMB Bank.
How to deposit and withdraw money from Personal Capital Cash?
As previously mentioned, you can deposit money in your Personal Capital Cash account through ACH transfers initiated from your account dashboard.
You can access cash from your account using ACH transfers as well. Because your money is held across five different banks, you may find that transections take a bit longer to complete.
There is also a three-day hold on this account. Your money won’t be ready to withdraw for up to three working days which is a bit longer than the standard one or two business days.
Although, my bank takes a few days to deposit and withdraw and charges a fee for immediate access to deposits.
How does Personal Capital Cash compare with other savings accounts?
Given its key characteristics, the Personal Capital savings account appears rather appealing.
Let’s see how it compares with other savings accounts offered by digital investment advisers or robo-advisors.
Here is a comparison between four savings accounts – Personal Capital Cash, M1 Spend, Betterment Everyday and Wealthfront Cash – across their main features.
|Personal Capital Cash||M1 Spend|
|Betterment Everyday Cash Reserve||Wealthfront Cash|
|Overview||Savings account||Checking account||Cash management account||Cash management account|
|Savings rate-All rates subject to change.||1.55% APY for all; 1.60% APY for Advisory clients||1.5% APY (interest only available on Premium M1 Plus account)||1.83% APY||1.78% APY|
|Account fees||$0||$0 – one ATM fee covered per month – M1 Plus pays interest and offers various services for $125 per year||$0|
|Minimum account balance||$0||$0||$10||$1|
|Deposits and transfers||Unlimited||Unlimited||Unlimited||Unlimited|
|Direct deposits||No||Yes||No||No (coming soon)|
|Debit card – ATM access||No||Yes – 1% cash back – 1 free ATM withdrawal/month and 4 free ATM transactions with M1 Plus||Yes||No (coming soon)|
Here are the key points from this comparison:
- While the Personal Capital Cash savings rate appears relatively high, it is the lowest offered by the four institutions compared here. Admittedly the differences are not very large, and the interest rates will change along with changes in the market interest rate.
- The M1 Spend checking account is the only one that allows direct deposits. Although, M1 Spend is actually a checking account versus a savings account.
- M1 Spend is the only account with bill pay.
In general, Personal Capital Cash is compatible with competors except doesn’t offer a debit card. That said, maybe they will rise to the competition and add one to their financial tools.
Personal Capital Cash Pros and Cons
After conducting this Personal Capital Cash review, the time has come for the verdict. There is a lot to like about this savings account, but it is not without its limitations.
Personal Capital Cash Account Pros:
- High savings rate a respectable 1.55% APY.
- No fees.
- No minimum deposit.
- FDIC insurance.
- Unlimited monthly transactions.
- Convenient no fee, high yield cash account, best for Personal Capital Advisors clients.
Personal Capital Cash Account Cons:
- Personal Capital Cash only allows ACH transfers. It would be wise, from a customer perspective, to allow direct transfers.
- At present, the account lacks ATM access and debit cards. I can see why these are not available at present, but some of my rationale for having a savings account is fast access to my money.
- The three-day hold to access cash can be inconvenient. This brings us to the previous point about fast access.
- If you rely on bank branches, then this account isn’t for you.
The Personal Capital Cash Review Wrap Up
If you’re a Personal Capital Advisory client, then the account is a no-brainer. It’s a good idea to have a place to stash cash, without fees and with a higher than average interest rate.
When investing in a high yield cash account, I wouldn’t worry about a tenth of a percent, or so difference in yield, as this will change depending upon market rates and whether the financial firm is offering a promotional rate or not.
For others, if you’re seeking a high yield savings account, it makes sense also have access to other related banking features like debit cards and direct deposit. The following robo-advisors offer highly recommended, low fee digital investment management along with high yield cash management, debit cards and direct deposit:
- M1 Spend from M1 Finance
- Betterment Everyday Cash Account
- Wealthfront Cash (with direct deposit and bill pay coming soon).
Even if you’re not ready to invest yet, but want a high yield cash account, any of cash accounts mentioned are fine for storing your cash and earning higher than market interest rates. And, when you’re ready to invest, you can easily transfer funds into the robo-advisor services.
Regardless of whether you choose in use the Personal Capital Cash savings account or not, the free Personal Capital investment and money management tools are outstanding.
To learn more about the complete Personal Capital offerings read the comprehensive expert Personal Capital Review.
Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t personally believe is valuable.
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