How does Wallace work?
Wallace is a smart emergency fund that grows like a term deposit and offers the flexibility of a savings account during defined emergencies.
If you encounter an emergency before the end of your term, you’ll have instant access to your savings. If you tap into your emergency fund for non-emergency spendings, however, you will be subject to a penalty.
What exactly is the Wallace Emergency Fund?
The Wallace Emergency Fund is an annuity issued by Wallace Insurance Company. An annuity is a principal protected, heavily regulated deposit instrument that can only be sold by life insurance companies. You can learn more about annuities here.
How does Wallace protect my principal and guarantee my returns?
Annuities are considered one of the safest forms of financial instruments. Like bank deposits, they are heavily regulated by the government and must have reserves (extra money) in place to guarantee that nothing ever happens to the deposited principal.
How does Wallace offer such high returns?
Most fixed annuities have higher returns than bank CDs. We took the traditional annuity product, improved it, removed all the fees, and built an emergency fund around it.
How does Wallace make money?
Like a bank, Wallace uses deposits to lend money. Unlike a bank, we don’t lend to every type of customer, but to AAA-rated companies like Apple and Coca-Cola. This is one reason annuities usually offer better returns than bank CDs, all with a similar level of risk.
Is Wallace FDIC insured?
While not FDIC insured, all insurance products, including annuities, are heavily regulated by the state government. Your deposits will be as safe as the life insurance policy you own.
Is my money safe with Wallace?
How do I get my Wallace emergency fund?
We are currently in product development phase. You can sign up here to join the waitlist and stay updated about our upcoming release. Once the product is ready, we’ll notify you and you can create your emergency fund directly on our website.
How do I fund my emergency fund?
You can transfer funds between your Wallace account and 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 more into your emergency fund 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 in your emergency fund 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?
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 five categories of emergencies during term, you may be charged up to 18 months of accumulated interest on the amount that you withdraw.
What qualifies as job loss?
What if I am self-employed or currently unemployed?
You will not be eligible for the “job loss” emergency withdrawal if you are self-employed (1099 worker) or currently unemployed. You need to be an active W2 worker able to receive a W2 form from an employer 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 account page. 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?
Upon completion of your emergency withdrawal, our AI engine will selectively determine whether your withdrawal needs to be verified. If requested, you will have 45 days to provide proof of emergency to complete the verification process. Proof of emergency includes, but is not limited to:
- 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 of spending or insurance claim number
- Car damage: Photo or video of damages, receipts of spendings 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?
There may be up to an 18-month penalty on your accumulated interest for non-emergency withdrawals during the term.
How long does the withdrawal process take?
Your money will take 1 to 2 business days to transfer into your linked checking account. We are working on getting you access to your funds even faster.
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 3, 5, 7 or 10 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?
We strive to provide you the best possible returns. When interest rates change, the returns we can offer will change as well, but we will always strive to provide the most competitive rates we can.
Emergency Fund 101
Why do I need an emergency fund?
An emergency fund is protection for your future self to cover unexpected disasters in life. In fact, surveys showed that 34% of Americans endured a major unexpected expense over the past year; yet 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?
Depending on your financial circumstances, a good rule of thumb is to have six to twelve months worth of living expenses.