What is Wallace?
Wallace Financial, Inc. works with its banking partner to provide FDIC-insured fixed deposit accounts designed as the best place to keep your emergency savings.
How does Wallace work?
Wallace helps you make the most out of your rainy day savings. By committing your money only for emergency uses for a set time period, you can earn up to 3.5% a year.
If you encounter an emergency at any time, you’ll have instant access to your savings. If you tap into your account for non-emergencies during your commitment term, you’ll be subject to a penalty.
What does 'committing my money' mean?
Commitments are made for a set time period, during which you can only withdraw for emergencies, or face a penalty.
Is Wallace FDIC insured?
Yes, all accounts will be issued into bank fixed deposits, which are FDIC insured up to $250,000.
How does Wallace offer such high returns?
We put your money into fixed deposit accounts with our FDIC-insured bank partners. A fixed deposit pays a fixed return for a set period of time. Its returns is higher than that of a savings account, but it charges a penalty if you withdraw before the period ends. In case of an emergency, Wallace will cover your early withdrawal penalty fully so you get all your money back. Because of that, the return you receive is slightly lower than the return our banking partners provide on fixed deposits.
How does Wallace make money?
We earn a fee through our banking partners for getting your deposits. Think of it as the bank sharing some of its profits with us. Because of this, the quoted APY you get will always be the amount you earn, with zero fees ever taken from your account.
What shouldn't I use Wallace for?
If you have savings that you’ll need in less than a year, it would be better to use a traditional savings account. Also, if you don’t want to lock in your interest rate, Wallace might not be right for you.
How do I get my Wallace emergency fund?
Early access will launch in January, with general release soon after. Sign up here to join the waitlist for early access.
Will Wallace have a mobile app?
Yes, we will be launching a mobile app, starting with our early access users in January.
How do I fund my Wallace account?
You can transfer funds with any external bank account. There are no transfer fees between these accounts.
What is the minimum deposit size?
Can I contribute more after the initial deposit?
Yes, you can continue to deposit over time. If rates have gone up since your last deposit, you will be able to get a new, higher rate for your contribution.
Is there a minimum balance required?
There is no minimum balance required and no minimum balance fees.
What are the fees for using Wallace?
Wallace has no monthly fees, transfer fees or minimum balance fees. Our mission is to make you money and fees don’t help towards that goal.
If I accidentally transferred too much into the account, do I have to pay a penalty to take some out?
What counts as an emergency?
There are 5 categories that qualify for free withdrawal:
These cover more than 95% of major emergencies. If you encounter any of them, you can make a free instant withdrawal.
What does not count as an emergency?
- Lifestyle spendings on your hobbies and luxuries, such as a gym membership, eating out at restaurants, vacation trips to Hawaii, etc…
- Home improvement and car upgrades
- General living expenses such as rent, bills and groceries outside the context of job loss and disability
- Paying off debts and taxes
- Pet related expenses
If you withdraw outside our 5 categories during commitment term, you will be charged a penalty, which will range between 3 to 12 months worth of interest.
What qualifies as job loss?
What if I am self-employed or currently unemployed?
You won’t be eligible for “job loss” emergency withdrawal if you are self-employed (1099 worker) or unemployed. You need to be an active W2 worker to be eligible for this emergency withdrawal. A W2 form may be asked for in the verification process.
What qualifies as disability?
What if I am currently disabled?
You will not be eligible for the “disability” emergency withdrawal if you are currently disabled.
What qualifies as medical emergencies?
You can tap into your emergency fund for any type of medical expense incurred by you or your dependent(s). This includes doctor visits, prescriptions, ER visits, non-cosmetic surgery, dental expenses, optometric expenses, physical therapy, etc.
Example: If you go to the ER and incur a hefty medical bill, you can use your emergency fund to pay for the out-of-pocket expenses.
What qualifies as home damage?
If you experience a catastrophe involving your home, be it burglary or natural disaster, your emergency fund is there to cover your expenses.
Example: During a windstorm, a tree falls and damages your roof and windows. Your emergency fund can cover your home repair expenses while you wait for the payment from your home insurance.
You can also tap into your emergency fund for any unexpected breakdown of your home structures and appliances.
Example: If your A/C broke down during a hot summer day, your emergency fund is there to cover the repair or replacement costs.
What qualifies as car damage?
If you experience any accident, natural disaster or unexpected breakdown of your car, you can access your emergency fund to cover your expenses.
How do I withdraw my money during an emergency?
You will be able to make a withdrawal on your Wallace app. The whole process will take no longer than a minute.
Do I need to verify every emergency?
When withdrawing funds prior to term, a pledge of honesty must be signed. On signing, you will have full access to your funds. If our AI-based system detects that a withdrawal might not have been for an emergency, your accumulated interest will be held in the account until you verify the emergency. Our goal is to get you access to your funds as quickly as possible when you need them.
How does Wallace verify emergencies?
When you request an emergency withdrawal, we may request verification for your emergency. In that case, you’ll have access to all your funds, less the penalty, which will be held in your account until verification. If requested, you’ll have 45 days to provide proof of emergency, which includes:
- Job loss: Prior employer name and contact information
- Disability: Physician statement
- Medical emergencies: Photo or digital copy of your medical bills and receipts
- Home damage: Photo or video of damages, receipts, or insurance claim number
- Car damage: Photo or video of damages, receipts, or insurance claim number
What happens if I fail to provide proof for my emergency?
If you fail to provide proof after 45 days, the penalty would be ascribed to the remaining balance in your account.
What is the penalty for non-emergency withdrawal?
Penalties will range between 3 to 12 months of interest and will depend on how much time is left on your commitment.
How long does the withdrawal process take?
For emergency withdrawals, you will get your money on the same day. For other withdrawals, it will take 1-2 business days.
Is there a limit to the amount I can withdraw?
There is no maximum limit to what you can withdraw other than the balance in your account. There is a $500 minimum for each withdrawal.
Can I make partial withdrawals from my account?
What happens when the term ends?
When the term ends, you will have a 30-day grace period to either:
- Renew and lock up a new guaranteed rate.
- Withdraw your money with no penalty.
As the term end approaches, we will remind you through a series of email and text notifications. After 30-days, your funds will automatically renew at the latest offered rate.
How long can I lock in an APY for?
You will have the option to lock in an APY for a term of 1 to 5 years. The longer you choose to lock in for, the higher the APY you would get.
Are the returns always going to be this high, or is it just temporary?
Once you deposit money into your account, your rate is fixed for the remainder of your commitment term. If interest rates go up or down after you deposit, it may affect the rate you get on future deposits.
Emergency Fund 101
Why do I need an emergency fund?
An emergency fund is meant to cover unexpected disasters in life. Surveys show that while 34% of Americans endured a major unexpected expense over the past year, 44% of Americans couldn’t cover a $400 emergency expense out of their pocket. Many people turn to credit card debt and high interest loans in times of need, a dangerous path that could easily put them in financial limbo.
I already have many types of insurance, do I still need an emergency fund?
You should still have an emergency fund to protect against disasters:
- That aren’t covered by insurance (like job loss).
- Where there might be large deductible or co-payment.
- Where the insurance company might take a long time to pay, or deny your claim.
How much should I have in an emergency fund?
A good rule of thumb is to have 3 to 6 months worth of living expenses put aside for emergencies.