Empower Personal Cash is a cash management account (CMA) that provides similar interest rates to a high-yield savings account. Launched in 2019, Personal Capital Cash is now Empower Personal Cash. It offers the flexibility of a checking account with unlimited withdrawals or deposits without fees.
In a rising or high interest rate environment, Empower Personal Cash can offer a higher savings rate than traditional savings accounts. Holding your house down payment in a cash management account is also a good idea so you have easy access whenever a nice house pops up.
Empower Personal Cash Review
With Empower Personal Cash™, you can earn 4.10% APY with its fee-free cash management account. (rate as of March 2023 and subject to change) Plus, you get to leverage the wealth of other tools the platform provides, all without paying a cent.
And what's also unique about Empower Personal Cash is it offers up to $2 million in FDIC coverage.
Empower Personal Dashboard also offers free wealth management so you can better manage and track your finances. If you want a professional from Empower to invest your money, you can also sign up for their paid advisory service. The advisory plans require $100,000 in assets under management and charge a 0.89% management fee.
Learn more in our extensive Empower Personal Dashboard review.
What Is Empower Personal Cash?
Empower Personal Cash is a cash management account originally launched by Personal Capital, an online wealth management company. Personal Capital was acquired by Empower in 2020, and continues to offer hybrid wealth management services. That means you can sign up to get a human financial advisor and an algorithmic advisor in one.
The Empower Personal Cash offering provides an easy cash management account for you to earn a higher interest rate on your idle cash. In the past, Personal Capital advisory clients could get an even higher interest rate.
Currently, Empower Personal Cash pays 4.10% APY for all accounts (as of March 2023, rates subject to change). These rates compare favorably to the average checking and savings account. Check your own bank rates and compare.
Other benefits of Empower Personal Cash include:
- Unlimited number of monthly transfers
- Aggregate FDIC insurance of up to $2 million ($250,000 per program bank)
- No minimum balance requirement
- No annual fees
- Wire up to $1 million without paying fees (this is huge since wire fees often cost $20 or more)
- Set up direct paycheck deposit and link your account to your checking account to pay bills
To keep funding your Empower Personal Cash account, you can link your paycheck directly and your checking account to pay bills.
There is a maximum deposit limit per transaction of $250,000. There's also a daily withdrawal limit of $25,000. If you're an advisory client or your account was open and funded more than 60 days before withdrawal, the daily limit increases to $100,000. Hence, if you have $1 million in cash deposited, it will take you 10 days to withdraw the full amount.
Positives And Negatives Of Empower Personal Cash
- No minimum balance requirements
- No account fees
- Still earn 4.10% APY as a non-advisory client (rate subject to change)
- Empower Personal Cash provides unlimited monthly withdrawals
- Joint accounts are available
- Some high-yield savings accounts pay higher interest rates
- No physical branches
- You can't deposit checks or write cash
- You don't get a debit card
Best Alternatives To Empower Personal Cash
Empower Personal Capital Cash is a good solution to earn a higher savings rate, especially if you use Empower's free tools or are an advisory client.
What I've also noticed is CIT Bank continuously offers some of the highest rates. It is an online savings bank with no branch offices. Because CIT Bank doesn't have offices, it can pass some of their savings to clients.
CIT Bank is typically the best alternative to Empower Personal Cash and is consistently competitive. They offer high-yield savings accounts, money market accounts, a wide range of term CDs as well as 11-month no-penalty CDs.
Treasury Bills Can Be An Attractive Alternative
Another alternative to Empower Personal Cash is Treasury bills. Look at 3-month, 6-month, 9-month, and 1-year Treasury bills if you're looking for maximum liquidity. When the Fed hikes interest rates, Treasury bill yields increase.
Here's how to buy Treasury bonds if you're interested in learning more. The post not only teaches you how to buy Treasuries, but discuss various buying strategies as well.
Below is a chart from Fidelity that shows various Treasury bills and Treasury bonds and their yields. If you buy 3-month Treasury bills today, in three months, you'll get all your capital back. If you continue to do so every month, whenever a tranche reaches its maturity, you can roll that cash into a new 3-month T-bill, etc.
You can also buy Treasury bonds directly from the government at Treasurydirect.gov or through any online brokerage account. Treasuries are less liquid than Empower Personal Cash. However, they are also guaranteed with even higher yields.
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Disclosure – Empower Personal Wealth, LLC (“EPW”) compensates Financial Samurai for leads. Financial Samurai is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.