(Built-in)
Robo-advisor Wealthfront is now offering cash accounts with a 2.24 percent yield to users, CNBC reports.
"We view the banking industry is the next piece in financial services for targeting innovation," Wealthfront founder Dan Carroll told CNBC in a phone interview.
"The best financial decisions can ultimately be on autopilot, and this will be an enormous competitive advantage of us going forward."
Carroll believes that their customers, 90% of whom are under the age of 45, are a prime audience for digital banking, decrying overdraft fees, "confusing services," or banks that "force you to go to a branch, or even worse, dial a call center."
The cash account is meant to complement the financial planning and investing services the decade-old wealth management firm offers.
"Young people don't like what the banks are selling. That leaves a future in financial services to be enacted through clicks, not conversations."
"It's the ideal way to address your short term goals like creating an emergency fund, saving for a car or even a home," Carroll wrote in a blog post Thursday.
FDIC-insured banks including East West Bank and New York Community Bank will be holding these assets on behalf of Wealthfront, a move the company says it passed muster with regulators prior to its launch announcement.
"Young people don't like what the banks are selling," Carroll told CNBC.
"That leaves a future in financial services to be enacted through clicks, not conversations."
