Personal Capital Launches Savings Account With 2.3% APY


Saving accounts used to be boring. In recent years, sticking your cash in a savings account meant earning a piddling 0.09% APY or less. But things are looking up — largely thanks to fintech companies, which are using technology to make banking more convenient and rewarding.

There’s now a host of accounts paying more than 2% APY, and Personal Capital has become the latest company to offer the chance to earn these generous yields on a safe account that’s FDIC-insured. Personal Capital is best known as a digital wealth-manager, but now it has partnered with UMB Bank to offer Personal Capital Cash™, a savings account with a 2.30% APY. 

Unlike some competitors offering similar rates, Personal Capital doesn’t require you to maintain a minimum balance to score this high yield. And if you’re a Personal Capital advisory client, you can earn even more: 2.35% APY.

Intrigued? Read on to learn more about this Personal Capital account and compare it with some other high-yield savings accounts on the market.

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Personal Capital promises high yields and no risks

Personal Capital Cash™ comes with all the features you’d expect from an online savings account that’s seriously competing for your dollars, including:

  • FDIC insurance on up to $1.5 million in deposited funds
  • No minimum balance requirements to earn the 2.30% APY
  • No fees associated with the account

Unlike many savings accounts, this one has no limit on the number of transactions you can make within your account. Under federal rules, there’s commonly a limit of six withdrawals per month from savings account — but you won’t be subject to this restriction when you deposit your cash with Personal Capital.

What’s in the fine print?

The first thing to know before you rush to deposit your cash is that your money won’t be held by Personal Capital, as Personal Capital isn’t a bank. Instead, UMB Bank places your deposited funds in accounts with participating program banks. The other banks that will actually store your cash weren’t disclosed. 

And while you’re not subject to a limit on the number of deposits or withdrawals, you can’t deposit more than $250,000 per transaction or withdraw more than $100,000 a day. For the vast majority of customers, these limits won’t be a big problem.

Personal Capital also makes it clear that the APY is variable and is subject to change at any time without notice — but that’s a pretty standard term for any high-yield savings accounts. 

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How does Personal Capital’s high-yield account compare with competitors?

Personal Capital isn’t the first company to offer a yield above 2% on FDIC-insured savings. There are other financial institutions offering similar rates — including some big-name banks with tons of local branches that don’t farm your cash out to unnamed partners. 

However, some of these institutions require you to pay a monthly fee, maintain a minimum balance, or use other banking products to get the highest yields. These catches can make them less attractive than Personal Capital, which charges no fees and attaches no strings to its 2.30% APY offer. 

And 2.30% is definitely generous, coming in at about 23 times the national APY offered by a typical savings account. 

There are a few better offers out there, though, including Betterment’s recently launched 2.69% APY on its Everyday Savings account — although this rate requires you to open a Betterment Everyday Checking account as well. Betterment is also reportedly facing questions from the Financial Industry Regulatory Authority about its new account offerings, though the specifics of the questions from haven’t been disclosed, so we only know that FINRA wants more details about the products.

Personal Capital’s other features — including its new Savings Planner tool, which helps you to manage debt repayment and to plan your contributions to savings accounts and retirement funds — also set the company apart from others offering high yields but few other services to help you save. 

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Should you invest your cash with Personal Capital?

With so many high-yield savings accounts out there, it’s hard to know when it’s worth making a switch. Personal Capital’s high APY, lack of fees, and unlimited transactions definitely make moving your money seem tempting — especially since your deposited funds will be protected by $1.5 million in FDIC insurance. 

So, if you don’t mind that your money will be kept with a partner bank and you don’t already have a savings account offering a similar yield, this account may be right for you. Before opening a new account, though, compare the rates and terms to see which one is the best fit (our picks for the best online savings accounts for 2019 are a good place to start).

If you already have an account paying a competitive rate, or you have a relationship with one of the other financial institutions offering similar yields, you may be better off keeping your money where it is or sticking with the bank you know. And if you’re chasing the highest possible yields, Betterment’s new offering may be a better bet.

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