Personal Capital – The Best Free Personal Finance Software

I have been using Personal Capital to manage my finances for over a year now. For last few years I did use Yodlee Money Center for the same purpose, but since I got accustomed to Personal Capital, which took a couple of visits, I have completely stopped using Yodlee. In the past, I had used Mint.com as well, but they have some serious limitations and I don’t use it anymore.  I have become a huge fan of Personal Capital features. You can’t ask for more in a free tool. So, in this post, I will go gaga over the new tool I am using.

Personal Capital money management tool really changed the way I was managing my finances in general and investments in particular. I used to visit each of my financial accounts periodically to get the status. Now, I only visit Personal Capital. I got enough benefits out of it to write 51 of ’em in this page. Other than helping me save thousands of dollars in retirement saving, they brought my finances under greater control and confidence with ease of use.

51 reasons I like Personal Capital

Setting up Your Account

1. It didn’t ask me for social security number while signing up. the sign-up process was quick and easy. Getting conversant with the features will take some time. You can’t unpack every feature in the first attempt. So, give it a little time. Only after 5 or 6 logins, was I able to explore most of the features.

2. Can link every financial account – Every US financial account, from PayPal to your 401 (k) account, from any broker, can be added on your Personal Capital account. I was able to link my 20 odd accounts (including checking, saving, taxable investment, retirement fund), all in just one attempt. 

3.  You can even add manual financial assets, in case you have a personal loan to your brother, you can add that value manually. You can also add value of the assets like arts, jewelry, etc

4. Personal Capital let us add values of our cars. I went to KBB site to know the current market value of our cars and manually updated them. So, my net worth contains the current fair price estimate of our two cars. I think it’s fair to include this in my net worth, it’s important that I know my true financial strength. 

5. You are allowed to add your home value – Either you can manually enter estimated sell value or you can link to Zillow Zestimate. Equity in your home is an important measure of your financial standing. Just add your home value as well as the mortgage account, if you still have a mortgage.

6. I got no error while connecting various financial accounts. I have more than 20, to be specific! It’s a pain in the back to try to update linked accounts in Yodlee and Mint. I was frustrated with seeing “unable to gather information” messages in Yodlee and Mint.

7. Each time I log on to Personal Capital, it fetches fresh data from my financial accounts. So when I see my checking account balance to be $17,231 it is indeed$17,231 lying in my checking account and it was not my balance one week ago, which is frequently the case with other financial management tools. These guys really invested in top notch technology.

8. Every time Personal Capital successfully connects to 20+ financial accounts to fetch data, unlike mint and Yodlee which often fails to connect.

9. No annoying emails, stating “Money Center couldn’t connect to BankOfAmerica account”. And I get that multiple times per week. Fewer emails help, no?

10. I don’t have to login to all my financial accounts individually to measure financial performance. I just logon to Personal capital and get the 360-degree view of my finances. Each financial account has to be added manually to Personal Capital tool at first, though.

11. Fraud Prevention – When you login from a  device, you get a security code delivered via phone/text. That makes Personal Capital very Secure. I think more secure than a mint or Yodlee, or a Home Depot or wherever data breach happened.

Conclusion – If you’re an existing mint.com or Yodlee user, switch to Personal Capital for a better experience.

Availability of the tool

12. Personal capital constantly updates your latest financial data. I tracked it doing twice every day on its own. It also refreshes all accounts upon your login.

13. Account updates in anticipation of a login – I have noticed it in Firefox. The moment I pull the site up, even before I click to login, Personal Capital starts updating my account. I think the cookie stored in my computer sends a signal of possible login attempt, which triggers this update. The upside – As soon as you logon you’re presented with most updated data. Downside – none because of two-tier security.

14. Personal Capital is never down. I got to my account every time I logged in. Which is a splendid experience for me? I noticed downtime with Chase, AMEX and BofA financial accounts. And. I did access Personal Capital during weekend nights as well when most technical changes are applied on sites.

15. Personal Capital is even available on Apple watch. So time is money is finally exemplified! I do not own an Apple Watch so, I can’t review performance and usability of a watch app. But, when I’ll have one, Personal Capital will be ready for me. So far this is the only financial app that is available in Apple Watch.

16. Personal Capital App has a PIN security – While registering the app, you’ll first need a device registration code (delivered to you via text/voice). Once you enter, you’ll be asked to setup a PIN for secure access. PIN will prevent an unauthorized user from accessing your account via the phone, in case your phone gets stolen.

How Personal Capital Tool Performs

17. A brand too big to trust – As per the current report, 750,000+ users are now using the platform, and more than $150 billion in assets are being tracked by users on the Personal Capital.

18. Superior technology – I work for a fortune 100 finance company, I help build their software products. So, I know a thing or two about a quality software. Let me tell you Personal Capital developed a great product. Whether on a tablet or on my iPhone or on my Chrome/Firefox browser. I haven’t noticed a single technical glitch.

19. Soothing to the eye – When you hire good screen designers, you get a product like Personal Capital. By nature financial data can never look pretty. After all, we are talking about digits, not flowers and scenery. My 20+ financial accounts create a 5-dimensional matrix on other personal finance tools. But somehow Personal Capital managed to keep the data look like a good picture, if not art. Intermixing of numbers and charts, with red, yellow and blue colors (with overall black on a white theme) is good for my eyes. See below!

20. A feature packs Dash Board that shows financial snapshot at that moment, including net worth, cash flow, investment performance, etc. Whereas Yodlee lists Networth, emails, news and other crap. Mint has many of the good features but not at par with Personal Capital

21. Let’s you know your money better – Mint is more about your financial management, it has components like budgets, alerts, etc. Whereas I am not a budget guy. I don’t budget in a plain paper or in a spreadsheet, let alone in an app, with one finger keying all the details. I am more interested in knowing my assets and investments better. Personal capital does just that.

22. Personal Capital has a special view that displays transactions across all my accounts, including spending, earning, dividends, interest income, and income from my blog advertisers. A very nifty way to be on top of your earnings and spending.

23.  Single logon to all credit accounts – I have 4 credit cards, AMEX, Chase, Citi and BofA. I no longer log on to four different websites to validate my charges. Rather, from the transaction view, I can verify charges on all of my cards. This saves time. I estimate this to be a couple of hours every month.

24. Classification of the Financial transaction – I can further classify transactions into Cash, Investment, Credit, Loan and mortgage payments. Making it easier to do a further financial analysis. Let’s say you want to determine how much mortgage you paid in past 6 months or how much did you pay for medical bills, retrieving such information is just a few clicks away.

More you use Personal Capital, more you’ll be conversant with its features. With every login, you’ll discover something new.

25. Different user-friendly account views – Personal capital even let you sort your transaction based on date, Category, Card, Bank, and amount. If you want to see the biggest spends, you can sort by the amount in descending order. if you’ve too many transactions listed, you can narrow your search by changing data range or search for a specific transaction as well.

26. Past 6 months of account performance – I can even see past performances of my investment accounts, starting from the time I opened that account.

27. Retirement Fee Analyzer – This is why I am writing this big article today. This one option saved me about $100,000 in fees I’d have paid from my 401(k) account over the years till my retirement. Below are fee analyzer chart before and after adjusting my 401 (k) investments.

Total Fees I’d have paid till age 65. Without making any change to 401(k) Holding

Now let’s see the total fees till my retirement after I made the adjustment as per Personal Capital recommendation. My sincere advice, open up a Personal Capital account today and save money immediately.

Total Fees now I’ll pay till age 65

28. Fund fees and expense ratio – You are presented with fee and expense ratio of each fund you hold. This makes it a lot easier to target the funds with a high fee if you want to replace them with low fee funds.

29. Retirement fund performance – How do you otherwise know how your 401 (k) /403 is performing? I had no clue but, now I know how I am performing against the benchmark or the average American. I am now confident of doing better than an average person.

30. Personal Capital shows all my bills in one window – With due date, due amount and last payment amount. Makes it easier to see my monthly liabilities. By looking at below picture, please do not assume I keep balance on my credit card. We pay in full every month. This month we took a vacation so credit card bills are high. And we never pay with cash, except to our lawn mower.

I know, an auto loan is a bad form of a loan, but our auto loan has 0% interest so, why pay in full?

Personal Capital Mobile App

31. Setting Budgets – Only App provides budgeting feature (termed goal in the tool). Not available on their website. You can setup budgeted spend on each of the categories you spent money in the previous months. Setting a budget is just a three click process. As easy as it can be.

Step 2

32. You will immediately see the benefit of budgeting – Once you set a target budget, you get a message telling you how much you can save for the year. I was encouraged to set stricter goals. This was much-desired feature they added very recently. Once I started using the tool, budgeting was not included. Another step closer to becoming all-inclusive personal finance tool

33. Push Notification on budget creep – Only if allow Personal Capital to send you to push notification, which I didn’t, you’ll get alerts when you overspend from your budget.

34. The best mobile app menu – Off all the financial apps, I liked Personal Capital most. This is user-friendly

35. Spending breakdown – this is very helpful to me to gauge where my money goes every month. By looking into the app, I can tell if my spending in restaurants is increasing.

Spending view presents the total spend and total cash flow

36. Ads free experience – Mint users might see a refreshing change. There’re absolutely no ads on PC. Their business model is to get your investment management task, for a fee. They don’t want to count changes from ad clicks on their tool.

37. One window for all your stocks – I have three different brokerage accounts to buy direct stocks. Merill Lynch, Fidelity and MB Trading. I can view the day’s gain/loss, the basis value, number of stocks, for my entire holding. With just a click I can’t ask for more

38. The fabulous “You Index” – So far you’ve heard about Dow index, S&P index, NASDAQ index, etc. Now it’s time for your own index. The index that consists of your holdings. You can see your index performance every day. It’ll be good to tune to CNBC to hear your index performance, one day. But till that time, you can logon to Personal Capital site/app to view “You Index”.

I got rid of one rotten tomato in my portfolio. I nailed it only because of the holistic view in the “You index”!

39. Easy logon to the mobile app – You can logon to the app easily with just the PIN you set. You don’t have to type in the ID/password in that tiny key pad. a relief for many.

Offline Services

40. Research and Insights – Not that efficient as a MorningStar or Kiplinger, but they have comprehensive coverage of everything happening in the economic sphere. This section contains insider reports, expert advice and many more

41. Personal Capital has a good blog for the users. When you have enough of reading my articles, you can switch over there to read something new.

42. You get weekly emails that summarize your income and earning. Often it compares with your previous month’s finances. So even when you’re not browsing their reports and charts, you are on top of your finances.

43. Personal Capital emails, if viewed on a laptop computer, contain graphical charts to measure your income/expenditure against last month.

44. Their email is value added service and a bit different than emails I get from my investment/brokerage account. Personal Capital sends me a clear concise and easy-to-go-through performance report on my investments.

Value added services

So, why they offer so much at no cost (Well, it’s no cost only when your asset value is more than $25,000)? They offer investment management service at a monthly cost. Many high net worth individuals do opt into their financial service

45. Notification Service – This is where Personal Capital is unique. it suggests some pain points or opportunities to improve your finances. I found them to be mostly advice on investments. As a free tool, this is more than what you’d ask for. I got a notification when I had too much cash in my portfolio. Since then, I reinvested the cash.

46. Special focus on retirement portfolio – In the screenshot above you can see an advice to earn $120,000 in retirement portfolio by shifting assets. I found it very informative, an eye opener. I was able to successfully follow the prescribed changes and reduced the fee I was paying for my target date retirement funds. Their retirement planner allows you to plan for your retirement if you want to use.

47. Financial advisor – Most of us don’t usually have a financial advisor unless you are very high networth individual. We generally assume that privilege of hiring an expert is for the riches. But if your assets reached more than $25,000 in value, including your retirement account, you can actually work with a personal finance expert. On the right bottom of your screen, you’d see the assigned advisor to your account. You can call/email this person anytime you need to.

48. Easily approachable financial advisor – The other good thing about your advisor is, you’ll actually get to speak to him/her on phone. Once your assets (the ones you link to)  reaches $25,000, you’ll be eligible for three free consultation. Where you’ll be going through the strength and weaknesses of your current investment mix.

49.  Your fund manager – There’s one un-explored good thing about Personal Capital, they can manage your money on your behalf. Meaning, your taxable investment dollars can be managed by your financial advisor in exchange of a small fee. After I had my three free consultation, I kind of started knowing my own money. The shortcomings were very clear and the path ahead was in sight. So, I didn’t let them manage my money. I think I am in complete control of my investments now.

50. Investment checkup – Many aspects of investment, for example, I never knew that I am heavily invested in technology sector or that I have too much cash lying in investment accounts. Only after investment checkup, the facts came out. My conversation with Fred was awesome. He did try to sell their paid products but I wanted to first try it out on my own for some time.

51. Security – Personal Capital security is top notch, perhaps better than Yodlee and Mint, or any other comparable tools. They have Chase and BOA like authentication. Each time you add a computer/phone to open personal capital, you’ll have to pass text/phone-based verification. I wanted my financial data to be this secure from the beginning.

Opportunities Personal Capital has

1. I can’t connect to my banks in India from Personal Capital. I can add a manual account but that won’t be updated dynamically. I think this is same with any international financial account. I added a manual investment account as a workaround. Once a quarter I update the amount there.

2. When I transfer funds from bank A to bank B. It lists them as both spending and income. Just brings a wrong Cash Flow numbers. If you were like me you move around funds from your checking account/PayPal account to your investment accounts. Personal capital shows those fund movements are spending on one account and earning on another account. The net result remains accurate, but spending and earning figures look inflated. I found this a minor annoyance, which I learned to live with.

3. That minimum linked account balance of $25,000 for getting an individually customized investment strategy may be out of reach for many. But, if you have at least $25,000 including your retirement saving, you’ll feel lucky.

4. I’d like to see an upgrade that will allow us to enter car details for Personal Capital to retrieve the fair market value from KBB. Much the same way it does for my home.

5. Net worth view is redundant as left bar has net worth details anyway.

6. You can’t export data to excel spreadsheet or pdf files, for offline access

Readers, if you don’t use a Personal Finance tool, then you are missing out on a great improvement opportunity. And, if you are using one and not using personal Capital, I sincerely urge you to take a look. You may add just a couple of accounts first to see the differences I talked about here. 

All the best to your financial future. Do leave your opinion about the tool below.