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 percent 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 fintech 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."
