After reading a lot about Personal Capital both on blogs and in other financial publications over the course of the last year or so, I decided that this was a service I needed to check out. I signed up for their free service a few months ago, and this is my review of Personal Capital’s free online tools. So far I have been very happy with Personal Capital, and I highly recommend that you consider signing up for a free Personal Capital account.
What is Personal Capital?
Personal Capital is an internet-based investment management platform that you can use to incorporate nearly all of your financial accounts (including bank accounts, credit card accounts, mortgage accounts, and investment accounts). It connects all those accounts in the platform to help you manage your finances- for free. If you desire more hands-on financial assistance, the site also provides professional investment advice to help you manage and grow your portfolio, for a fee.
Benefits of Personal Capital
You can sign up for a Personal Capital account for free with no strings attached. That’s what I did. Since I have financial accounts with multiple different banks (Capital One 360, TD Ameritrade, Barclaycard, Citi cards, etc.), it was hard to get a broad view of everything at once. I’d have to log into multiple accounts to accomplish the same thing I can accomplish by just logging into my Personal Capital account- and I have a LOT more cool features available to me in Personal Capital.
If you want to combine all of your finances in one place, Personal Capital can easily do it. You link your accounts once, and it will automatically pull everything in going forward. You can view your net worth, your cash flow, spending, and much more. In terms of investments, it can show you where you’re doing well, how to reduce your investment fees, if you’re holding too much of one thing, etc. Personal Capital focuses a lot on the investing side of things, but they offer excellent budgeting tools as well.
What You Get With a Personal Capital Account
As I’ve mentioned, Personal Capital offers a ton of neat tools and features that will help you to improve the performance of your investments, as well as your household budget. These tools come with every account, but some do focus more on you becoming a Personal Capital investment client (which is not free- if you choose to become an investment client, there is a fee).
Some of these tools have been incredibly helpful to me, and if you sign up for Personal Capital, I highly recommend that you spend some time checking out all the tools they have available.
Here are some of the available tools:
401(k) Fee Analyzer
Personal Capital’s fee analyzer shows you how much you are paying in fees on your employer-sponsored 401(k) plan. The analyzer can also make recommendations on how to rearrange your plan in a way that will minimize your fees. The tool actually links directly to your 401(k) plan to provide you with the most accurate picture of your finances. I have to admit, this is an area of our finances that we historically have not had a very good handle on here at Casa Frugal- but it’s been made a lot easier with this tool.
Cash Flow Tool
This feature works as a budget tool and tracks your income from all sources. You can also track your expenses by category, store, and date, and have the ability to view, track, and pay your bills (on time) each month.
This is an important tool for getting out of debt. If you want to get out of debt, you first need to know where all of your money is going! That way you can figure out where to make cuts to free up money to throw at debt repayment. The Personal Capital cash flow tool helps you do all of that.
This tool was an interesting one to me, because it allows you to compare your portfolio against certain benchmarks. This tool also can produce a customized financial plan that analyzes your current holdings and goals. It provides a risk assessment of your portfolio and a retirement plan review. I think this is one of the most important Personal Capital tools to take advantage of.
Monitor Your Net Worth
I’ve written a lot in the past on the power of knowing your net worth. In my opinion, net worth is one of your most important financial numbers to know, because it helps you to know what you have after debts and all other liabilities have been subtracted out. Personal Capital gives you the ability to track your net worth on a continuous basis. And since knowledge is power, this should help you to make adjustments that will improve your net worth over time.
Weekly Financial Snapshots
One of the really useful tools of Personal Capital are their weekly snapshot emails sent directly to you. I find these emails very useful. Not only do they show graphs on how your spending is trending, but they also compare it to previous months. You can also get a snapshot of how your investments are doing compared to benchmarks like the S&P 500. It’s really neat. I automatically know whether my net worth is tracking up or down, whether my investments are up or down, and how I’m doing on my spending. These are invaluable tools, which comes free when you sign up for a Personal Capital account.
This function helps you to determine ways to lower your overall tax liability in your investment portfolio. Again, this is something that I think many people don’t even consider, but it’s made much easier for those who choose to become a wealth management client of Personal Capital.
Dedicated Investment Advisor
As a client with Personal Capital, you will have a dedicated investment adviser appointed to you, for you to contact and get advice. Best of all, you have the advisor even if you don’t use their paid wealth management service!
Personal Capital mobile apps can be downloaded for iPhone, iPad, and Android. The mobile version includes nearly everything that is available on the desktop platform. It makes it really easy to keep track of all of your finances even when you’re not at your computer.
Integrated Investment Portfolio
Personal Capital imports all of your investment accounts into your account so that you can look at your entire asset allocation in one place. This has been one of the most helpful things in our household, since my husband and each have our own traditional IRAs, Roth IRAs, and SEP IRAs. This provides us with a snapshot of everything that we have, which is especially helpful when trying to analyze overall asset allocation, fees, etc.
Personal Capital Security
The fact that you have to put in your passwords in order to link your accounts is the only piece of Personal Capital that prevented me from signing up for an account for so long. I know there’s really no way to get around it- I mean, how else would they be able to determine info about your accounts in real time? In order for you to be able to access all the cool features that this service provides, this is necessary.
Only after I began to do some research and reading did I start to feel comfortable with this, and here’s why. Personal Capital security features are top notch. The site uses bank level encryption to protect your account. They also perform regular third-party security audits to make sure that the system can’t be compromised. Personal Capital uses Verisign and other security systems in the protection of the site. They also use device authentication, which requires that you must first authenticate every device you link to your account. In other words, they are extremely interested in keeping your information secure, and they work very hard to do so.
Personal Capital Fees
Personal Capital is free to use. It doesn’t get any better than that! Fees apply only when you use their fee-based services, in which they also provide a higher level of service. In my opinion, Personal Capital offers some of the best tools out there for comprehensively managing spending as well as investing. If you are interested in signing up for a free Personal Capital account, click here.
First Photo: pmakin/Depositphotos.com
Mrs. Budgets @MrandMrsBudgets says
The fee analyzer and the investment checkup are my favorite features of personal capital. I don’t use it to track my spending or for budgeting purposes. I still prefer a good old excel spreadsheet for that.
Dee S says
We LOVE the both of those features! Between hubby’s 401(k) and our Roth IRAs, SEP IRAs, etc, we have several different accounts. It makes it hard to get an overall view of fees, etc, especially when they are with different financial institutions. But this feature of Personal Capital makes it so much easier to get a handle on that!
I’ve tried a bunch of other online tools for tracking net worth, but PC seems to do it the best. There is no better feeling than seeing that line trend upward. Highly recommended product.
Dee S says
The net worth tracker is one of my favorite features. I agree, it’s super fun watching the line trend up, up, up!
Brian @DebtDiscipline says
It the one PF software I haven’t checkout yet, but need to. Time to make some time for Personal Capital.
Dee S says
I’d recommend it! Personal Capital really does have a ton of great features, and since it’s free you really can’t beat the price!
Thanks for the tip, Dee. I’ll do some more research. The extra info on personal security was very helpful.
Dee S says
Thanks Nelson! It’s a great resource, definitely one worth checking out.
What I understood, unless you note down every penny you spent, you won’t be able to analyse properly your savings situation.
1- First step was that I was keeping all major categories of the spendings in my mind and had a rough idea about balance
2- Second step was that I have created an excel table to maintain main expenses, what helped to analyse better and save more
3- Third I got a budget calculator app to maintain all the expenses and savings increased due to clarity of main “consuming categories” and their cut (those aren’t of significant value and doesn’t affect that much)
Finally what I realised – more details you put – better you can control & analyse spendings to increase your savings.
I agree, it really takes a careful analysis of your spending before you can begin to get control of it. Thanks for stopping by, Maxim!