Empower Personal Cash: A High-Yielding Savings Account With $2 Million FDIC Insurance Coverage

In 2019, Personal Capital, launched a new high-yield savings account with aggregated FDIC insurance that covers balances up to $2 million. They called this Personal Capital Cash. Empower Retirement then acquired Personal Capital in 2020. Now in 2023, Personal Capital Cash is renamed Empower Personal Cash with all the same great features.

The Empower Personal Dashboard app also features the Savings Planner. It is a savings tool to help people plan annual retirement savings, an emergency fund, and pay down debt. If you want to learn more about the app, please check out our extensive Empower Personal Dashboard review.

Now anyone can open an account through Empower Personal Capital Cash with no minimum balance. You can do so straight from your mobile device.

Further, Empower Personal Cash has the flexibility of an unlimited number of withdrawals. It also has aggregated insurance protection up to 5 times more than what most banks offer.

Empower Personal Cash

“We have more than 2 million registered users who combined hold more than $41 billion in cash or money market accounts,” explained Personal Capital CEO Jay Shah.

“If those folks are earning the national rate on that cash, that amounts to more than $900 million in lost interest annually. We saw that and immediately knew we had to do something. So we built Personal Capital Cash to put that money back in the hands of American consumers.”

The latest Report on the Economic Well-being of U.S. Households, published by the FederalReserve, found that 40% of Americans couldn’t cover an unexpected $400 expense with cash, illustrating the need for savings support beyond retirement or vacation planning.

With the company’s holistic approach to financial planning, Empower Personal Capital launched a new tool on its dashboard in addition to the new high-yield account: Savings Planner. Savings Planner calculates, breaks down, and tracks annual savings goals for retirement and an emergency fund accounts.

“Too many financial companies are trying to tell Americans that saving is simple – that they can just make coffee at home instead of buying that latte,” continued Shah.

“But we know better. Saving, whether it’s for retirement, a short-term goal, or in case of an emergency, can cause anxiety. Personal Capital is creating complete, clear solutions to help people feel confident about their money decisions.”

Empower Personal Capital Cash Interest Rates

When Personal Capital Cash first launched in 2019, it provided an APY of 2.3% for non-clients and a 2.35% APY for clients. Then, interest rates plummeted in 2020 due to the flight to safety in bonds. As a result, Personal Capital Cash dropped their APY below 0.25% APY for clients.

Due to rate hikes by the Fed, interest rates climbed back up. And as of March 2023, Empower Personal Cash accounts are now offering 4.1% for all accounts. That includes non clients, Empower Investment Service, Wealth Management, and Private Client. Those are better rates than when the program launched! Nevertheless, rates are constantly fluctuating and subject to change.

For an even higher online savings rate, however, check out online banks like CIT Bank instead. CIT Bank's Savings Connect accounts offer the highest savings account rates I've seen.

Empower Personal Cash was originally launched by Personal Capital in partnership with Institutional Banking at UMB Bank. UMB's Institutional Banking team provides large scale banking services and insured deposit account solutions for broker-dealers, non-bank financial institutions, and fintech companies.

The most impressive part about Empower Personal Cash is not the interest rate, but the aggregate FDIC insurance of $2 million. How can a cash management account offer that much coverage?

How Can You Have FDIC Insurance On $2 Million?

Given the FDIC only covers $250,000 in principal and interest per depositor per program bank, I found this $2 million aggregate FDIC coverage to be interesting. Empower Personal Cash has the largest FDIC insurance I've ever seen.

Here is a response I received from Rachel Chanco, a Director at Personal Capital. I asked her how so much FDIC coverage is possible. Here is explanation based on the original offering of 1.25 million in aggregate FDIC coverage, which has since risen to $2 million:

“The program currently has 5 participating banks all of which allow for $250,000 in FDIC insurance coverage. To be more specific taking language from our disclosure agreements; ‘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. This is where it earns a variable rate of interest and is eligible for FDIC insurance.'”

To participate in the program, you must open an account at UMB Bank (all through the personal capital dashboard), through which your funds will be placed in accounts at participating program banks. The advertised interest rates are paid by participating program banks. 

Use Empower Personal Dashboard's Free Financial Tools

Empower Personal Dashboard provides the best free wealth management tools online today. I've been using them since 2012 to track my net worth and investment exposure. Partly thanks to them, my net worth has growth by 5X since.

You can sign up for Empower Personal Dashboard for free to use their tools. The better you can track your finances, the more you can optimize your finances.

Personal Capital Budgeting Cash Flow

Related post: How Much Savings Should I Have Accumulated By Age?

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