Sid Pailla was about 10 years old when he and his parents moved from India to the United States, arriving with “negative assets.”
As the English speaker in the household, he took on a big job for a young kid: helping his parents navigate the financial challenges of their early immigrant lives.
“What I quickly learned was this almost silly trade-off, of them investing into retirement and retirement savings, while we were trying to figure out if I could even have a bed,” he said. “Things like that would always stick out in my mind.”
The memory of his parents’ initial financial struggles lingered, even as Pailla went on to earn an undergraduate degree and three additional graduate degrees from the University of Virginia.
Now, that 10-year-old is the CEO of Sunny Day Fund, a startup that helps workers build near-term savings accounts with support from their employers. The accounts are FDIC-insured up to $250,000, and account owners can contribute and withdraw at any time.
While it’s not a replacement for a 401(k) or other retirement savings, Pailla believes it addresses the challenge he witnessed in his own parents’ financial planning.
“There’s a massive gap, where life does happen, where we have kids, where we buy houses, where we buy cars, where we have emergencies,” he said. “All of that stuff happens, but there’s no vehicle for that. That’s where we’re trying to come in and fill that gap.”
Headquartered in Falls Church, Virginia, Sunny Day Fund has five full-time employees united in a quest for financial equity and inclusion.
“We have a vision of becoming the mainstay financial benefit for America,” Pailla said.
The company was accepted into the Fall 2020 Lighthouse Labs accelerator program, earning third prize in the Demo Day audience vote.
Sunny Day Fund’s prime demographic is employers that have members of their workforce making annual salaries of, broadly, about $30,000 to $75,000, such as manufacturers or hospital systems.
Employers can contribute to the accounts, supporting a benefit that Pailla said both attracts and retains employees. Employers have been contributing $200 to $600 a year, per employee, as a reward for saving, he said.
The accounts are currently held by a single banking partner, with a future goal to expand banking partnerships. So far, Sunny Day Fund is seeing a “high” voluntary enrollment rate, with average biweekly contributions of about $40 to $50.
In the year ahead, Sunny Day Fund’s focus is developing additional products like the tentatively named Shine Card, a debit card tied to the account, building out its team and raising a $1.5 million seed round this spring.
And, critically, they want to get more employers and employees onto their platform.
“The needle that we want to move is, ‘Can we create a financial benefit for the 120 million American workers who are not saving toward retirement?’” he said.