【2023.12 Update】Users who open a Cash Account can now get 5% APY + up to $625 in rewards. The deposit requirement is a bit high, but if you have some spare cash, you can give it a try.

This Cash Account is not a checking or savings account. They move these funds to deposits at partner banks to obtain FDIC insurance, so, in theory, both principal and interest are not at risk.

Cash Account is offered by Wealthfront Brokerage LLC (“Wealthfront Brokerage”) , a Member of FINRA/SIPC. Neither Wealthfront Brokerage nor any of its affiliates are a bank, and Cash Account is not a checking or savings account. We convey funds to partner banks who accept and maintain deposits, provide the interest rate, and provide FDIC insurance.

Investment accounts do not have FDIC insurance, so there is risk.
Investment management and advisory services--which are not FDIC insured--are provided by Wealthfront Advisers LLC (“Wealthfront Advisers”) , an SEC-registered investment adviser, and financial planning tools are provided by Wealthfront Software LLC (“Wealthfront”) . All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Please see ourFull Disclosurefor important details.

About Wealthfront

Wealthfront Inc. is an automated investment service firm based in Palo Alto, California, founded by Andy Rachleff and Dan Carroll in 2008. As of January 2019, Wealthfront had more than $11.4 billion of assets under management. Wealthfront is considered a "robo-advisor" investment service.

Wealthfront is an automated investment services company based in Palo Alto, California. It was founded in 2008 by Andy Rachleff and Dan Carroll. As of January 2019, Wealthfront managed more than $11.4 billion in assets.

Wealthfront (here, mainly referring to the investment account) has the following features:

It’s an ETF

Wealthfront is an ETF (exchange-traded fund). Wikipedia’s definition of an ETF:

An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.

Translated directly, an exchange-traded fund is an investment fund traded on stock exchanges, very similar to stocks. An ETF holds assets such as stocks, commodities, or bonds, and usually operates through an arbitrage mechanism designed to keep trading close to its net asset value, although deviations can sometimes occur. Put simply, an ETF is an investment fund that is relatively easy to trade. The advantage is that it is relatively stable and low cost; the downside is that the returns are not especially high.

Automated recommendations

As Wikipedia explains, Wealthfront is called a "robo-advisor" because it first asks users to fill out a questionnaire (to determine whether the goal is diversification, tax saving, asset management, or beating the market) and then automatically builds your portfolio (a basket of different asset classes) based on those answers. Of course, users can customize the portfolio and adjust the expected risk score. For example, I originally rated myself at 7.0, but wanted something more conservative, so I lowered it to 3.5. In other words, the stock allocation goes down and the bond allocation goes up.

Low management fees

I had previously learned about investment accounts at traditional banks from friends and bankers, but whenever I heard that management fees were around 1% to 4% of total assets, I backed away. The main issue is that the account balance is only so much, yet they still want to charge such a high fee; you end up making less than the fee you pay. By comparison, Wealthfront charges only 0.25%, which is really low. Also, if you sign up for an investment account through my Wealthfront referral link, you get $5,000 in fee-free assets.

Status-friendly

Whether you are on F1 or a green card holder; whether you are retired or still working, you can apply for a Wealthfront account. As long as you have an SSN, just choose the appropriate option truthfully when you register.

Returns

If you make money, that’s great—users are happy, and Wealthfront is happy too (it can more comfortably collect management fees on amounts above the free limit, and users are more willing to recommend the platform). If you lose money, Wealthfront also has a useful tax loss harvesting feature. Simply put, Wealthfront sells investments at a loss to realize actual losses, and those realized losses can be used to offset taxes.

Wealthfront account types

Wealthfront offers the following account types:

  • High-interest cash account. Similar to a savings account, it currently pays 2.1% interest (variable), which is indeed quite high. My Marcus by GS and AMEX Savings accounts are both considered fairly high-yield, and they only pay 1.7% right now. Not to mention Chase’s insulting 0.01% interest rate...
  • Regular long-term investment account. This is the focus of this article!
  • Retirement investment account. My current understanding, to put it casually, is to put the money you truly won’t need into this account (for money you won't need before your 60th birthday). WF offers these types: Traditional IRA, Roth IRA, SEP IRA, and rolling over a 401(k). I honestly do not understand this very well; if anyone knows more about this, please share in the comments and I’ll update this post.
  • College investment account. WF offers a 529 Plan, and users do not have to pay tax on education-related expenses or the interest earned.

For each account type, you can choose Individual (just for one person), Joint (for you and your partner), or Trust (an account opened by someone you trust). Individual accounts can be opened in the app; the other two can only be set up on the website.

Referral link

Using our referral link now gives you $5,000 in fee-free management for the investment account. That means saving $12.50 per year—we should save wherever we can~ The steps are as follows:

  • Open the app and sign up for an account
  • When registering an account, WF will ask us to complete a questionnaire. WF will automatically generate a personalized portfolio for the user based on the questionnaire results

The questionnaire questions are shown in the image and are mainly used to assess the user's risk tolerance.

  • WF will automatically generate your portfolio based on the questionnaire results (a basket of investments across different asset types); of course, users can also modify their own portfolio and choose their desired risk score.
  • If everything goes smoothly, WF will send an email asking the user to verify their information. After verification, you’ll quickly receive a message that the account has been opened.
  • Finally, connect an existing bank account to the account you opened and transfer funds in. The first $5,000 invested in the account is fee-free.

Things to Note

Of course, opening a Wealthfront account also comes with the following things to note:

Wealthfront cash savings account

  • To open a cash savings account with Wealthfront, you must have at least Resident Alien status; in simpler terms, that means a U.S. citizen, green card holder, or someone who has stayed in the U.S. for 5 years. Please click the official link for the exact eligibility requirements.
  • Withdrawals from the Wealthfront cash savings account must be initiated from the Wealthfront side.
  • If the balance in the Wealthfront cash savings account is below $250, the only option is “Withdraw the entire account balance”; but don’t worry, once the balance is back above $250, you can withdraw any amount.
  • Of course, the cash savings account also has its advantages: high interest, and no limit of 6 transactions per month like a regular savings account.

WF investment account

  • You need an SSN
  • Because of wash sale issues, it’s better to keep this kind of automated investing account to just one
  • Opening an account requires a minimum investment deposit of $500, but when I opened mine, putting in only 100 bucks seemed fine too?

Fun Fact: About wash sale

First, what is a wash sale? The following is quoted from Wikipedia:

A wash sale is a sale of a security (stocks, bonds, options) at a loss and repurchase of the same or substantially identical security shortly before or after. Losses from such sales are not deductible in most cases under the Internal Revenue Code in the United States. Wash sale regulations disallow an investor who holds an unrealized loss from accelerating a tax deduction into the current tax year, unless the investor is out of the position for some significant length of time. A wash sale can take place at any time during the year, or across year boundaries.

Simply put, because in the U.S. investment losses can be used to offset taxes, some people will sell their losing stocks at the end of 2019, then buy them back at roughly the same price in early 2020. This doesn’t really affect their assets, but it creates the appearance of losses in 2019, which delays taxes.

Now suppose we have two automated investment accounts, W and B. Because the two providers are independent, B sells its stock at the end of 2019 to stop the loss when the stock has dropped, while W buys the same stock in early 2020 thinking it is a good chance to buy the dip. In this way, the user unknowingly creates a wash sale.

So, what can be done to avoid it? Yes. 1. Find a professional accountant and provide them with the tax forms from all of the user's automated investment providers so they can correct the issue, which takes time and money; 2. Focus on just one automated investment provider, and I recommend Wealthfront here.

Personal Thoughts

I think automated investment accounts like Wealthfront are very suitable for beginners like me who are just getting started with investing and don't have many assets. Stocks are like a roller coaster; jumping in without learning first is too risky. On the other hand, putting money in a savings account and earning such a small amount of interest feels unsatisfying.

In this situation, putting your money into an automated investment account with a risk level you choose yourself (you can set it lower) doesn't require too much time or energy, and you can get relatively safer, relatively higher-yield returns through a robo-advisor.

Apps with similar automated wealth management features include Acorns. If you want to try stocks, you can also choose low-barrier, no trading or management fee apps like Robinhood and Webull, and even pick up some free stock along the way.

Stock Market Basics

Here are some popular U.S. stock brokerages and their account-opening bonuses:

Overview Sign-Up Bonus Quick Take
Moomoo $200 in stock vouchers + $1,000 in Anthropic stock + 8.1% APY Feature-rich with a strong Chinese-language experience. Its market data, Level 2 quotes, options, and cash management features are useful for everyone from beginners to active traders.
TradeUp 50 shares of NVDA + a chance to win 5 shares + 4% for three months Well suited to active trading, with competitive trading fees and margin rates for U.S. tax residents. It supports Web Trading and Level 2 quotes and offers Chinese-language customer service.
Webull 12 fractional shares + one month of Premium membership Strong charting and active-trading features, including technical indicators, options, and premarket and after-hours trading. A good fit for frequent traders.
BBAE Up to $650 in rewards Convenient for Chinese users to open an account; applications are accepted without an SSN or ITIN. It offers good Chinese-language support, but currently charges a platform fee, making it less suitable for frequent trading with small amounts.
Robinhood A chance to win 1 share of stock Its simple interface is easy to use, making it suitable for first-time U.S. stock investors. Gold members also get a higher yield on uninvested cash and lower margin rates.
Interactive Brokers Up to $1,000 A highly capable broker with access to global markets and multiple currencies. Its margin costs are competitive, and Chinese residents can also open accounts. A good fit for experienced investors and those investing globally.
TradeStation $250 Geared toward professional and active traders, with powerful advanced charting, strategy backtesting, and automated trading tools. Most long-term investors may not need these features.
Schwab Up to $1,000 Well suited to long-term investing and larger portfolios, with convenient access to ETFs and CDs. Checking accounts and global ATM access are also advantages, but the default yield on uninvested cash is relatively low.
Fidelity Account opening link A long-established full-service brokerage suited to long-term investing, ETFs, and retirement accounts. It also offers good cash management, making it a solid choice as a primary long-term brokerage.
BIT (formerly Matrixport) Earn $210 by depositing and trading Suitable for Chinese users and digital asset investors. You can use funds such as USDT and USDC to invest in U.S. stocks. It is not a traditional U.S. brokerage, so review its fees and asset custody structure separately.
SoFi Invest $75 for opening an account Easy to use and supports Stock Bits, making it suitable for small investments and long-term investing. It has fewer advanced market data and trading tools, so it is not ideal for frequent trading.
M1 Finance Get $10 when you deposit Focused on Pies and automated investing. It is well suited to setting a stock and ETF allocation and investing regularly over the long term, but not to active trading.

If you don’t have an SSN or ITIN but still want to invest in U.S. stocks, consider the brokerages and platforms below. They accept a full set of Chinese documents, and you can register with a national ID card or passport. None participates in China’s CRS.

  • BBAE: Welcoming to Chinese users; no SSN or ITIN required to open an account
  • BIT (formerly Matrixport): Open an account with a national ID card; approval can take just a few hours.
  • Bitget: Complete identity verification with a national ID card or Chinese passport

If you’re in China and want to invest in U.S. stocks, see this overview:

Referral Link

Using our refer link now can get you $5,000 in free management for your investment account.