Brokers | Minimum Deposit | Fees | Options contract fee | Highlight | Learn More |
---|---|---|---|---|---|
![]() Fidelity Cash Management Account | $0 | Best for Comprehensive Cash Management | Learn More Fidelity Cash Management Account | ||
![]() Betterment Cash Reserve | $0 | Best for Competitive Yield on Cash | Learn More Betterment Cash Reserve | ||
![]() Empower Personal Cash | $0 | Best for Flexible Cash Management | Learn More Empower Personal Cash | ||
![]() Wealthfront Cash Account | $0 | Best for High-Yield Savings | Learn More Wealthfront Cash Account |
Highlight | Best for Comprehensive Cash Management |
---|---|
Fees | $0 |
Options contract fee | N/A |
Minimum Deposit | N/A |
Sign-up Bonus | N/A |
- Integration with Fidelity Investments: The account seamlessly integrates with other Fidelity investment accounts, allowing for easy transfers and a consolidated view of cash and investments.
- Competitive Interest Rates: The account offers competitive interest rates on cash balances, potentially allowing individuals to earn a higher yield on their savings.
- Extensive ATM Access: Account holders can access cash easily through a wide network of ATMs without incurring fees, providing convenient and hassle-free access to funds.
- Online and Mobile Banking: The account provides comprehensive online and mobile banking capabilities, allowing individuals to manage their cash, track transactions, and view statements conveniently.
- Enhanced Security Measures: Fidelity employs advanced encryption technologies and multi-factor authentication to ensure the security of transactions and protect customers’ personal and financial information.
- Linking with Investment Accounts: The account can be linked to a Fidelity investment brokerage account, enabling seamless transfers between cash management and investment accounts.
Pros
- Integration with Fidelity Investments: The account seamlessly integrates with other Fidelity investment accounts, allowing for a consolidated view of cash and investments and easy transfers between accounts.
- Competitive Interest Rates: Fidelity Cash Management Account offers competitive interest rates on cash balances, potentially allowing individuals to earn a higher yield on their savings compared to traditional bank accounts.
- Extensive ATM Access: Account holders have access to a wide network of ATMs without incurring fees, providing convenient and widespread access to cash.
- Online and Mobile Banking: The account provides robust online and mobile banking capabilities, allowing individuals to manage their cash, track transactions, and view statements conveniently and securely.
- Enhanced Security Measures: Fidelity employs advanced security measures, including encryption technologies and multi-factor authentication, to protect customers’ personal and financial information.
- Linking with Investment Accounts: The account can be linked to a Fidelity investment brokerage account, enabling seamless transfers between cash management and investment accounts, providing individuals with greater flexibility and control over their financial activities.
Cons
- Fees: While Fidelity Cash Management Account offers many benefits, it’s important to be aware of any applicable fees, such as account maintenance fees or ATM fees, which may apply to certain transactions or account activities.
- Limited Branch Access: Fidelity is primarily an online financial institution, so individuals who prefer in-person banking services may find the lack of physical branch locations inconvenient.
- Limited Deposit Options: Unlike traditional bank accounts, Fidelity Cash Management Account may not offer the same range of deposit options, such as cash deposits at branches or in-person check deposits.
- Not a Traditional Bank Account: It’s important to note that Fidelity Cash Management Account is not a traditional bank account. While it offers many banking services, it may not have the same level of regulatory protections or FDIC insurance coverage as traditional banks.
- Investment Risks: If individuals choose to link their Fidelity Cash Management Account to investment accounts, they should be aware of the potential risks associated with investments, including the possibility of loss of principal.
The Fidelity Cash Management Account is a comprehensive cash management solution offered by Fidelity Investments. Designed to meet the financial needs of investors, the account provides a range of features and benefits to help individuals effectively manage their cash holdings. One of the key features of the Fidelity Cash Management Account is its seamless integration with other Fidelity investment accounts. This allows investors to easily transfer funds between their cash holdings and other investment vehicles, enabling a holistic approach to managing their finances. With the ability to view and manage their cash and investments in one place, investors can make informed decisions and maintain a cohesive investment strategy. The account offers competitive interest rates on cash balances, allowing individuals to potentially earn a higher yield on their savings compared to traditional bank accounts. This feature makes the Fidelity Cash Management Account an attractive option for individuals seeking to maximize the return on their cash holdings. Another notable feature of the Fidelity Cash Management Account is its extensive ATM network. Account holders can access cash easily through a wide network of ATMs across the country without incurring fees. This accessibility provides convenient and hassle-free access to funds whenever needed. The Fidelity Cash Management Account also offers comprehensive online and mobile banking capabilities. Account holders can manage their cash, track transactions, and view statements through Fidelity’s secure online platform or mobile app. This feature enhances convenience and provides individuals with real-time access to their account information, allowing for efficient financial management. Furthermore, the Fidelity Cash Management Account provides robust security measures to protect customers’ personal and financial information. Fidelity employs advanced encryption technologies and multi-factor authentication to ensure the security of transactions and data. One additional benefit of the Fidelity Cash Management Account is the option to link it to a Fidelity investment brokerage account. This integration allows for seamless transfers between the cash management and investment accounts, enabling individuals to execute investment strategies and access funds as needed. It’s important to note that while the Fidelity Cash Management Account offers numerous advantages, it may not be suitable for everyone. Individuals should carefully review the account terms and conditions, including any fees or limitations, to determine if it aligns with their financial goals and needs. Overall, the Fidelity Cash Management Account provides individuals with a comprehensive cash management solution that combines competitive interest rates, seamless integration with investment accounts, extensive ATM access, convenient online and mobile banking, and robust security measures.
Highlight | Best for Competitive Yield on Cash |
---|---|
Fees | $0 |
Options contract fee | N/A |
Minimum Deposit | N/A |
Sign-up Bonus | $90 |
- Competitive Yield: Betterment Cash Reserve offers a competitive interest rate on cash balances, allowing individuals to earn a higher return on their cash compared to traditional savings accounts.
- FDIC Insurance: Cash held in Betterment Cash Reserve is FDIC insured up to the applicable limits, providing customers with peace of mind and protection for their funds.
- Low Minimum Balance Requirement: Betterment Cash Reserve has a low minimum balance requirement, allowing individuals to start with a small initial deposit and continue to contribute or withdraw funds as needed.
- No Account Fees: Betterment Cash Reserve is a no-fee service, meaning customers are not charged any account maintenance or transaction fees for using the Cash Reserve account.
- Seamless Integration: Betterment Cash Reserve seamlessly integrates with other Betterment products, allowing customers to easily transfer funds between their investment accounts and the Cash Reserve account.
- Easy Access to Funds: Customers can easily access their funds held in Betterment Cash Reserve, making it a convenient and liquid cash management solution.
Pros
- Competitive Yield: Betterment Cash Reserve offers a competitive interest rate on cash balances, allowing individuals to potentially earn a higher return on their cash compared to traditional savings accounts.
- FDIC Insurance: Cash held in Betterment Cash Reserve is FDIC insured up to the applicable limits, providing customers with peace of mind and protection for their funds.
- Low Minimum Balance Requirement: Betterment Cash Reserve has a low minimum balance requirement, making it accessible to individuals with varying levels of savings.
- No Account Fees: Betterment Cash Reserve is a no-fee service, meaning customers are not charged any account maintenance or transaction fees for using the Cash Reserve account.
- Seamless Integration: Betterment Cash Reserve seamlessly integrates with other Betterment products, allowing customers to easily transfer funds between their investment accounts and the Cash Reserve account.
- Easy Access to Funds: Customers can easily access their funds held in Betterment Cash Reserve, making it a convenient and liquid cash management solution.
Cons
- Limited Features: Betterment Cash Reserve primarily focuses on cash management and may not offer the same breadth of features and services as traditional banking institutions.
- Not a Traditional Bank Account: It’s important to note that Betterment Cash Reserve is not a traditional bank account. It is a cash management service provided by Betterment LLC through partnerships with program banks.
- Potential Inflation Risk: As with any cash investment, there is a risk that the yield earned on Betterment Cash Reserve may not keep up with inflation, potentially eroding the purchasing power of the deposited funds over time.
- Availability: Betterment Cash Reserve may not be available to individuals residing outside of the United States or to those who do not meet certain eligibility criteria.
Betterment Cash Reserve is a cash management solution offered by Betterment, a popular online investment platform. It is designed to provide individuals with a convenient and low-risk way to earn a competitive yield on their cash holdings while maintaining liquidity and easy access to their funds. One of the key features of Betterment Cash Reserve is its competitive yield. By leveraging partnerships with program banks, Betterment is able to offer an attractive interest rate on cash held in the Cash Reserve account. This allows individuals to earn a higher return on their cash compared to traditional savings accounts offered by brick-and-mortar banks. Another notable feature of Betterment Cash Reserve is its low minimum balance requirement. Customers can start with a small initial deposit and continue to contribute or withdraw funds as needed, without facing any penalties or fees. This flexibility makes it suitable for individuals with varying levels of savings and cash flow needs. Betterment Cash Reserve also offers FDIC insurance on cash balances up to the applicable limits. This provides customers with added peace of mind, knowing that their funds are protected in the event of a bank failure. FDIC insurance covers each depositor up to $250,000 per bank, per ownership category. The platform’s user-friendly interface and seamless integration with other Betterment products make managing cash holdings straightforward and convenient. Customers can easily transfer funds between their investment accounts and the Cash Reserve account, enabling them to optimize their overall financial strategy. Additionally, Betterment Cash Reserve is designed to be a no-fee service. While Betterment may generate revenue through its partnerships with program banks, customers are not charged any account maintenance or transaction fees for using the Cash Reserve account. This ensures that customers can fully benefit from the interest earned on their cash without incurring additional costs. It’s important to note that Betterment Cash Reserve is not a traditional bank account. It is a cash management service provided by Betterment LLC through partnerships with program banks. The funds held in the Cash Reserve account are deposited into one or more of these program banks, allowing customers to benefit from FDIC insurance coverage. In summary, Betterment Cash Reserve offers a competitive yield on cash balances, with low minimum balance requirements and FDIC insurance protection. The user-friendly interface and integration with other Betterment products make it a convenient option for individuals looking to optimize their cash holdings. However, individuals should carefully review the terms and conditions, including any potential limitations or restrictions, before deciding if Betterment Cash Reserve is the right cash management solution for their needs.
Highlight | Best for Flexible Cash Management |
---|---|
Fees | $0 |
Options contract fee | N/A |
Minimum Deposit | N/A |
Sign-up Bonus | N/A |
- Competitive Interest Rates: Empower Personal Cash offers competitive interest rates on cash deposits, allowing individuals to potentially earn more on their savings compared to traditional savings accounts.
- User-Friendly Interface: The platform provides a user-friendly interface that allows individuals to easily track their spending, create budgets, and set savings goals. This helps users make informed financial decisions and stay on top of their finances.
- Flexibility: Empower Personal Cash allows users to deposit and withdraw funds at any time without incurring penalties or fees, providing individuals with the flexibility and liquidity they need.
- Automated Savings: The platform analyzes users’ spending patterns and income to identify opportunities for saving. It then automatically transfers funds from the user’s checking account to their Empower Personal Cash account, helping them build their savings effortlessly.
- Integrated Bill Payment: Empower Personal Cash offers integrated bill payment, allowing users to conveniently pay their bills directly from their Empower account, streamlining their financial management.
- Strong Security Measures: Empower Personal Cash employs advanced encryption and security protocols to protect users’ personal and financial information, ensuring secure transactions and peace of mind.
Pros
- Competitive Interest Rates: Empower Personal Cash offers competitive interest rates on cash deposits, allowing individuals to potentially earn more on their savings.
- User-Friendly Interface: The platform provides a user-friendly interface that makes it easy for individuals to manage their cash holdings, track their spending, create budgets, and set savings goals.
- Flexibility: Empower Personal Cash allows users to deposit and withdraw funds at any time without incurring penalties or fees, providing individuals with the flexibility and liquidity they need.
- Automated Savings: The platform analyzes users’ spending patterns and automatically transfers funds from their checking account to their Empower Personal Cash account, making it convenient to save and build up their savings.
- Integrated Bill Payment: Empower Personal Cash offers integrated bill payment, allowing users to conveniently pay their bills directly from their Empower account, simplifying their financial management.
- Strong Security Measures: Empower Personal Cash employs advanced encryption and security protocols to protect users’ personal and financial information, ensuring secure transactions and peace of mind.
Cons
- Limited Services: Empower Personal Cash primarily focuses on cash management and may not offer the same range of services as traditional banking institutions.
- Availability: Empower Personal Cash may not be available to individuals residing outside of the United States or to those who do not meet certain eligibility criteria.
- Not a Traditional Bank Account: It’s important to note that Empower Personal Cash is not a traditional bank account. It is a cash management solution provided by Empower Finance, and funds held in Empower Personal Cash are held at partner banks.
- Potential Inflation Risk: As with any cash investment, there is a risk that the yield earned on Empower Personal Cash may not keep up with inflation, potentially eroding the purchasing power of the deposited funds over time.
- Third-Party Partnerships: Empower Personal Cash relies on partnerships with other financial institutions to offer its services. This means that users’ funds are held at these partner banks, subject to their terms and conditions.
Empower Personal Cash is a cash management solution offered by Empower, an online financial platform. It is designed to provide individuals with a convenient and flexible way to manage their cash holdings and optimize their savings. One of the key advantages of Empower Personal Cash is its ability to help individuals earn higher interest on their cash balances. Through partnerships with multiple banks, Empower is able to offer a competitive interest rate on cash deposits, allowing customers to potentially earn more on their savings compared to traditional savings accounts. Empower Personal Cash also provides users with a seamless and user-friendly interface to manage their cash holdings. The platform allows individuals to easily track their spending, create budgets, and set savings goals. This empowers users to make informed financial decisions and stay on top of their finances. Another notable feature of Empower Personal Cash is its flexibility. Users have the freedom to deposit and withdraw funds at any time without incurring penalties or fees. This provides individuals with the liquidity they need, ensuring that their cash remains accessible whenever required. Additionally, Empower Personal Cash offers the benefit of automated savings. The platform analyzes users’ spending patterns and income to identify opportunities for saving. It then automatically transfers funds from the user’s checking account to their Empower Personal Cash account, helping them build their savings effortlessly. Empower Personal Cash also provides users with the convenience of integrated bill payment. Users can pay their bills directly from their Empower account, eliminating the need to juggle multiple payment platforms or manually manage payments. Furthermore, Empower Personal Cash offers peace of mind through its strong security measures. The platform employs advanced encryption and security protocols to protect users’ personal and financial information. This ensures that users can confidently manage their cash and conduct transactions securely. It’s important to note that while Empower Personal Cash offers several benefits, it is crucial for individuals to review the specific terms and conditions provided by Empower for the most accurate and up-to-date information. Overall, Empower Personal Cash provides individuals with a flexible, convenient, and potentially rewarding solution for managing their cash holdings and optimizing their savings.
Highlight | Best for High-Yield Savings |
---|---|
Fees | $0 |
Options contract fee | N/A |
Minimum Deposit | N/A |
Sign-up Bonus | $30 |
- High-Interest Rate: The account provides a competitive APY (Annual Percentage Yield) on cash balances, allowing individuals to potentially earn more on their savings compared to traditional savings accounts.
- FDIC Insurance: Wealthfront partners with FDIC-insured banks, providing up to $1 million in FDIC insurance coverage for cash deposits. This insurance ensures that customers’ funds are protected in the event of bank failure.
- Unlimited Transfers and Withdrawals: The account allows for unlimited transfers and withdrawals, providing individuals with flexibility and easy access to their funds whenever needed.
- No Account Fees: Wealthfront Cash Account does not impose any account fees, enabling individuals to maximize their earnings without incurring additional costs.
- Seamless Integration: The account seamlessly integrates with Wealthfront’s investment platform, allowing individuals to easily transfer funds between their Cash Account and investment accounts, providing a comprehensive view of their financial portfolio.
- Secure and Private: Wealthfront prioritizes the security and privacy of its customers. The Cash Account utilizes industry-standard encryption and robust security measures to protect personal and financial information.
- Mobile Access: The account can be accessed and managed through the Wealthfront mobile app, providing convenient and on-the-go banking capabilities.
Pros
- High-Interest Rate: The account offers a competitive APY on cash balances, potentially allowing individuals to earn more on their savings compared to traditional savings accounts.
- FDIC Insurance: Wealthfront partners with FDIC-insured banks, providing up to $1 million in FDIC insurance coverage for cash deposits. This insurance ensures that customers’ funds are protected in the event of bank failure.
- Unlimited Transfers and Withdrawals: The account allows for unlimited transfers and withdrawals, providing individuals with flexibility and easy access to their funds whenever needed.
- No Account Fees: Wealthfront Cash Account does not charge any account fees, allowing individuals to maximize their earnings without incurring additional costs.
- Seamless Integration: The account seamlessly integrates with Wealthfront’s investment platform, enabling individuals to easily transfer funds between their Cash Account and investment accounts, providing a comprehensive view of their financial portfolio.
- Convenient Mobile Access: The Cash Account can be accessed and managed through the Wealthfront mobile app, providing convenient and on-the-go banking capabilities.
Cons
- Limited Banking Services: The Wealthfront Cash Account is primarily focused on cash management and may not offer the same range of banking services as traditional brick-and-mortar banks, such as physical branch locations or in-person services.
- No Physical Deposits: Deposits into the Cash Account can only be made through electronic means, such as electronic funds transfer (EFT), and do not support physical cash or check deposits.
- Investment Risk: Wealthfront is primarily an investment platform, and while the Cash Account provides FDIC insurance, it’s important to note that investments made through the platform are subject to market risks and fluctuations.
- Limited ATM Access: Unlike traditional banks, Wealthfront does not have its own network of ATMs. However, the Cash Account does provide access to a network of ATMs through partner banks, although fees imposed by ATM operators may apply.
The Wealthfront Cash Account is a cash management solution offered by Wealthfront, a leading provider of automated investment services. Designed to complement its investment platform, the Cash Account provides individuals with a range of features and benefits to help manage their cash holdings effectively. One of the standout features of the Wealthfront Cash Account is its high-interest rate. The account offers a competitive APY (Annual Percentage Yield) on cash balances, potentially allowing individuals to earn more on their savings compared to traditional savings accounts offered by brick-and-mortar banks. This feature makes the Wealthfront Cash Account an attractive option for individuals looking to maximize the return on their cash holdings. Another key feature of the Wealthfront Cash Account is its FDIC insurance coverage. Wealthfront partners with banks to hold customers’ funds, and through these partnerships, the account provides up to $1 million in FDIC insurance coverage. This coverage offers individuals peace of mind, knowing that their funds are protected in the event of bank failure. The account also offers unlimited transfers and withdrawals, providing individuals with flexibility and liquidity to access their funds whenever needed. Additionally, the Wealthfront Cash Account does not impose any account fees, ensuring that individuals can fully benefit from the high-interest rates without incurring additional costs. Wealthfront places a strong emphasis on security and employs industry-standard encryption and security measures to protect customers’ personal and financial information. The account is also backed by robust fraud monitoring and identity verification protocols, ensuring a safe and secure banking experience. Furthermore, the Wealthfront Cash Account is seamlessly integrated with Wealthfront’s investment platform. This integration allows individuals to easily transfer funds between their Cash Account and investment accounts, providing a unified view of their overall financial picture. The ability to manage both cash and investments within the same platform simplifies financial management and helps individuals maintain a cohesive investment strategy. It’s important to note that while the Wealthfront Cash Account offers numerous advantages, it may not be suitable for everyone. Individuals should carefully review the account terms and conditions, including any limitations or requirements, to ensure it aligns with their financial goals and needs. In summary, the Wealthfront Cash Account offers a high-interest rate, FDIC insurance coverage, unlimited transfers and withdrawals, no account fees, robust security measures, and integration with Wealthfront’s investment platform. These features collectively make the Wealthfront Cash Account an attractive option for individuals looking to optimize their cash holdings while benefiting from the convenience and security of a digital banking solution.
Cash management accounts are a relatively new type of financial product that combines the features of checking and savings accounts with the ability to invest in the stock and bond markets. These accounts are typically offered by brokerage firms and online banks, and they are designed to provide customers with a high degree of flexibility and convenience in managing their finances. In this guide, we will explore the key features of cash management accounts, their benefits and drawbacks, and how to choose the best one for your needs. We will also provide tips on how to make the most of your cash management account and answer some frequently asked questions.
What are cash management accounts?
Cash management accounts are hybrid financial accounts that offer a range of features found in both traditional checking and savings accounts, as well as investment accounts. They typically provide higher interest rates than traditional checking accounts, but also offer the ability to invest funds in a variety of financial instruments, such as stocks, bonds, and exchange-traded funds (ETFs). Cash management accounts are often offered by online financial institutions and brokerages and have become increasingly popular among individuals looking to manage their finances and investments in one place. In this guide, we will explore the features, benefits, and drawbacks of cash management accounts, as well as provide recommendations for the best options available on the market.
Common features of the best cash management accounts
The best cash management accounts typically offer a combination of high-yield savings, checking, and investment options. They are designed to provide a convenient and seamless experience for managing your finances. Some of the common features of the best cash management accounts include:
- High interest rates: Cash management accounts typically offer higher interest rates compared to traditional savings or checking accounts. This allows you to earn more on your cash balances.
- No monthly fees: The best cash management accounts do not charge any monthly maintenance fees, allowing you to keep your money without any extra cost.
- ATM fee reimbursement: Some cash management accounts reimburse you for ATM fees charged by other banks, providing you with greater flexibility in accessing your funds.
- FDIC insurance: Cash management accounts are typically FDIC-insured up to $250,000 per account, providing you with peace of mind that your money is safe.
- Investment options: Some cash management accounts offer investment options, such as stocks, bonds, and mutual funds, allowing you to grow your wealth in addition to earning interest on your cash balances.
- Mobile banking: The best cash management accounts offer mobile banking apps that allow you to manage your accounts on the go, deposit checks, transfer funds, and pay bills.
- Low minimum balance requirements: Cash management accounts typically have low minimum balance requirements, allowing you to start with a small amount of money and grow your balance over time.
Benefits of cash management accounts
Cash management accounts (CMAs) can offer several benefits to users. Here are some of the most common ones:
- High-interest rates: Cash management accounts typically offer high-interest rates compared to traditional checking accounts. This can help you earn more money on your cash reserves.
- FDIC insurance: Most cash management accounts are FDIC-insured, which means that your deposits are protected up to $250,000.
- Easy access to cash: With a cash management account, you can easily access your funds through debit card transactions, ATM withdrawals, or electronic transfers.
- Low fees: Many cash management accounts have low or no fees, making them an attractive option for those looking to save money on account maintenance.
- Integration with other financial services: Some cash management accounts are offered by fintech companies that provide additional financial services, such as investment management, bill payment, and budgeting tools.
Overall, cash management accounts can provide a convenient and flexible way to manage your cash reserves while earning a competitive interest rate.
Downsides of cash management accounts
Although cash management accounts offer several benefits, they also come with a few downsides. One of the biggest drawbacks is that most cash management accounts are offered by online banks, which means that they don’t have physical branches. This can be a problem for customers who prefer to do their banking in person or need to deposit cash. Another downside is that some cash management accounts may have higher fees than traditional checking or savings accounts. Additionally, while cash management accounts typically offer higher interest rates than traditional savings accounts, they may not offer the highest rates available on the market.
How to choose the best cash management accounts
When it comes to choosing the best cash management accounts, there are a few factors to consider. First and foremost, you’ll want to look at the interest rates offered by each account. The higher the interest rate, the more money you’ll earn on your deposits.
You should also consider any fees associated with the account, such as monthly maintenance fees or transaction fees. Look for accounts that have low or no fees.
Another important factor to consider is the account’s accessibility. Some cash management accounts may have limitations on withdrawals or transfers, so be sure to read the account terms carefully.
Finally, consider the account’s overall reputation and track record. Look for accounts offered by reputable financial institutions with a strong history of customer service and satisfaction.
How do cash management accounts work?
Cash management accounts (CMA) are financial accounts that combine the features of a checking account, savings account, and investment account in one place. They are offered by non-bank financial institutions, such as robo-advisors, brokerages, and fintech companies.
A CMA typically provides a high-yield savings account or money market account, with the ability to write checks, use a debit card, and make electronic transfers. Some CMAs also offer investment options, such as stocks, bonds, and exchange-traded funds (ETFs).
When you deposit money into a CMA, the funds are usually held by a partner bank, which is FDIC-insured up to $250,000. This means that your money is protected from bank failure, similar to a traditional savings account.
Unlike traditional bank accounts, CMAs often come with no monthly maintenance fees, minimum balance requirements, or ATM fees. However, they may have other fees, such as foreign transaction fees, wire transfer fees, or trading fees for investment options.
Types of cash management accounts
There are several types of cash management accounts available in the market. Some of the most common types include:
- Traditional banks: Many traditional banks now offer cash management accounts, which are typically FDIC-insured and may have higher interest rates than traditional checking accounts.
- Online banks: Online banks, also known as internet-only banks, are financial institutions that operate entirely online. They offer cash management accounts with competitive interest rates and low fees.
- Brokerage firms: Some brokerage firms offer cash management accounts that are linked to investment accounts, allowing customers to easily transfer funds between their investment and cash management accounts.
- Robo-advisors: Some robo-advisors offer cash management accounts with high-interest rates and low fees. These accounts are typically linked to investment accounts and offer features like automated investing and goal-based savings.
- Non-bank financial institutions: Some non-bank financial institutions, such as payment processors, also offer cash management accounts that are designed for businesses. These accounts may offer features like cash flow management tools and online invoicing.
What are joint cash management accounts?
Joint cash management accounts (CMAs) are CMAs that are held by two or more people who share ownership and access to the account. Joint CMAs work similarly to joint bank accounts, where both account holders have equal rights to use the account and make transactions.
Joint CMAs can be a good option for couples, families, or business partners who want to pool their funds together for common expenses or investments. With a joint CMA, each account holder can deposit and withdraw funds, view account activity, and manage investments as needed.
However, it’s important to note that joint CMAs can also have some potential drawbacks. For example, both account holders may be held responsible for any overdrafts or fees incurred on the account, and there may be restrictions on the types of transactions that can be made without the consent of both account holders.
Additionally, joint CMAs may not be the best option for everyone, especially if there is a risk of conflict or disagreement between the account holders. It’s important to carefully consider the benefits and risks of a joint CMA before opening one and to discuss expectations and responsibilities with all account holders involved.
What’s the difference between cash management accounts and and regular bank accounts?
Cash management accounts (CMAs) and regular bank accounts have some similarities, but there are some key differences as well. Here are a few key differences to consider:
- Investment options: CMAs typically offer a wider range of investment options than traditional bank accounts. With a CMA, you can often invest in stocks, bonds, ETFs, and other investment products, while traditional bank accounts typically don’t offer these options.
- FDIC insurance: While both CMAs and traditional bank accounts are typically FDIC insured, there may be differences in the amount of coverage offered. Some CMAs offer FDIC insurance through partner banks, which can result in a higher level of insurance coverage than traditional bank accounts.
- Fees: CMAs may have higher fees than traditional bank accounts, particularly if you use the investment features. You may also be required to maintain a higher minimum balance to avoid fees.
- Interest rates: CMAs may offer higher interest rates than traditional bank accounts, but this is not always the case. It’s important to compare the interest rates and fees of different CMAs and traditional bank accounts to find the best option for your needs.
- Account features: CMAs may offer additional features, such as budgeting tools, mobile apps, and ATM fee reimbursement, that traditional bank accounts may not have.
Overall, CMAs may be a good choice for individuals who want to combine their banking and investment needs into a single account. However, it’s important to compare the features and fees of different CMAs and traditional bank accounts to find the best option for your needs.
Pros and cons of cash management accounts
Some potential pros of cash management accounts include:
- Higher interest rates: Cash management accounts can offer higher interest rates than traditional savings accounts.
- Easy access to funds: Cash management accounts often come with debit cards or check-writing abilities, allowing you to easily access your funds when needed.
- No fees: Many cash management accounts come with no fees, or lower fees than traditional bank accounts.
- Convenience: Cash management accounts combine the benefits of a checking and savings account into one, making it a convenient option for those who want to simplify their finances.
Some potential cons of cash management accounts include:
- Limited FDIC coverage: Cash management accounts may have limited FDIC coverage, which means that only a certain amount of your funds will be insured.
- No physical branches: Many cash management accounts are offered by online banks, which means that there may not be any physical branches for you to visit.
- Limited account features: Cash management accounts may not offer as many account features as traditional bank accounts, such as bill pay or wire transfers.
- Higher minimum balance requirements: Some cash management accounts may have higher minimum balance requirements than traditional bank accounts, which may not be feasible for everyone.
It’s important to weigh the pros and cons of cash management accounts and determine if they are the right fit for your financial needs and goals.
How to compare the best cash management accounts
When comparing cash management accounts, there are several factors you should consider, such as:
- APY (annual percentage yield): This is the interest rate you earn on your money. Look for accounts with higher APYs to maximize your earnings.
- Fees: Cash management accounts may come with various fees, such as monthly maintenance fees, ATM fees, and overdraft fees. Choose an account with low or no fees.
- FDIC insurance: Make sure the account is FDIC insured, which means your money is protected up to $250,000 in case the bank fails.
- Minimum deposit and balance requirements: Some cash management accounts require a minimum deposit to open, as well as a minimum balance to avoid fees. Consider your financial situation and choose an account that suits your needs.
- Account features: Look for accounts with features that fit your needs, such as free ATM access, mobile banking, and bill pay.
- Customer service: Consider the quality of customer service offered by the bank, such as availability, responsiveness, and helpfulness.
- Reputation: Research the bank’s reputation, including its financial stability, history, and customer satisfaction.
By considering these factors, you can compare and choose the best cash management account for your needs.
How many cash management accounts can I get?
You can open multiple cash management accounts, but it’s important to keep in mind that each account may have its own set of terms, fees, and features. Having multiple cash management accounts can help you diversify your cash holdings and potentially earn higher interest rates, but it can also make it more difficult to manage your finances and keep track of your account balances. It’s a good idea to evaluate your financial needs and goals before opening multiple cash management accounts.
What are common fees associated with cash management accounts?
Cash management accounts may have several fees associated with them. Some of the common fees are:
- Account maintenance fee: Some cash management accounts charge a monthly fee to maintain the account. This fee can range from a few dollars to several hundred dollars per month.
- ATM fees: If you use an ATM that is not in the cash management account’s network, you may be charged a fee by the ATM operator and by your cash management account provider.
- Overdraft fees: If you spend more than what is available in your account, you may be charged an overdraft fee. Some cash management accounts offer overdraft protection, which may come with its own fees.
- Transaction fees: Some cash management accounts may charge a fee for certain transactions, such as wire transfers or foreign currency transactions.
- Minimum balance fee: Some cash management accounts require you to maintain a minimum balance to avoid a fee. If your balance falls below the minimum, you may be charged a fee.
It’s important to read the terms and conditions of a cash management account carefully to understand the fees associated with the account.
Glossary for cash management accounts
Here are some common terms related to cash management accounts:
- Cash Management Account (CMA) – A financial account that combines various financial services into a single account, including banking, investing, and cash management.
- FDIC insurance – The Federal Deposit Insurance Corporation (FDIC) is an independent US government agency that provides insurance to depositors in the event of a bank or financial institution failure.
- Annual Percentage Yield (APY) – The total amount of interest earned on an account over the course of a year, expressed as a percentage of the account’s balance.
- Minimum balance requirement – The minimum amount of money that must be kept in an account in order to avoid fees.
- Debit card – A payment card that deducts money directly from a checking account to pay for purchases.
- ATM fees – The fees charged by a bank or financial institution for using an ATM that is not part of their network.
- Bill pay – A service offered by banks that allows customers to pay bills electronically from their checking account.
- Transfer – Moving money from one account to another, such as from a checking account to a savings account.
- Overdraft fee – A fee charged when a customer spends more money than they have in their checking account.
- Account aggregation – The ability to view and manage multiple financial accounts from a single interface.
How to get the most out of cash management accounts
To get the most out of cash management accounts, consider the following:
- Maximize your cash balance: Since cash management accounts typically offer higher interest rates than traditional savings accounts, it makes sense to keep as much cash in the account as possible to earn the most interest.
- Take advantage of features: Cash management accounts often come with features such as ATM fee reimbursements, mobile check deposit, and bill pay. Be sure to use these features to make managing your money easier and more convenient.
- Use budgeting tools: Some cash management accounts offer budgeting tools to help you track your spending and stay on top of your finances. Take advantage of these tools to better manage your money.
- Consider linking accounts: If your cash management account is with the same institution as your other accounts, consider linking them to make it easier to move money between accounts and avoid overdrafts.
- Review fees: While cash management accounts often have lower fees than traditional bank accounts, it’s still important to review the fee schedule to make sure you’re not being charged for services you don’t need or use.
- Keep an eye on FDIC insurance limits: Cash management accounts are typically FDIC insured, but the coverage limit is $250,000 per depositor per institution. If you have more than $250,000 in cash, consider spreading it across multiple institutions to ensure it’s all fully insured.
What are the requirements to get cash management accounts?
The requirements to get cash management accounts vary depending on the financial institution offering the account. However, there are some common requirements that you might need to meet:
- Minimum balance: Some cash management accounts require you to maintain a minimum balance to avoid fees or to earn higher interest rates.
- Verification of identity: You will need to provide personal identification information, such as your name, date of birth, Social Security number, and address.
- Bank account: Many cash management accounts require you to have a linked bank account in order to transfer funds to and from the cash management account.
- Application: You may need to fill out an application, either online or in person, to open a cash management account.
- Credit check: Some cash management accounts require a credit check to ensure that you have a good credit history.
- Age: You may need to be at least 18 years old to open a cash management account.
It’s important to review the specific requirements for each cash management account you are interested in before opening an account.
How to apply for cash management accounts
To apply for a cash management account, follow these steps:
- Research and compare: Look for various cash management accounts offered by different financial institutions, compare their features, fees, and benefits to determine which one is the best fit for you.
- Check eligibility: Once you’ve found a cash management account that suits your needs, check the eligibility requirements to ensure that you meet them. Typically, you’ll need to be at least 18 years old, have a valid Social Security number, and have a government-issued ID.
- Gather necessary documents: You may need to provide documentation to prove your identity, such as a driver’s license, passport, or state-issued ID. You’ll also need to provide your Social Security number.
- Apply online: Most financial institutions allow you to apply for a cash management account online. Fill out the application form and submit any required documentation.
- Fund your account: Once your account has been approved, you’ll need to fund it with an initial deposit. This can usually be done via an electronic transfer from another bank account or by mailing a check.
- Start using your account: Once your account is funded, you can start using it to manage your cash, make purchases, and earn interest on your balance.
How to best use cash management accounts
Here are some tips on how to best use cash management accounts:
- Consider your financial goals: Before opening a cash management account, consider what you want to achieve financially. If you’re looking for higher interest rates, make sure to compare the rates offered by different providers. If you need easy access to your funds, look for accounts that offer ATM withdrawals or online bill payments.
- Maximize your interest: Some cash management accounts offer higher interest rates than traditional savings accounts, so make sure to take advantage of that. Consider depositing your cash reserves into the account to earn a higher rate of return.
- Monitor your account: Keep an eye on your cash management account to make sure you are not being charged any fees or overdrafts. Some accounts may require you to maintain a minimum balance, so be sure to keep enough funds in the account to avoid any penalties.
- Take advantage of the features: Many cash management accounts come with additional features, such as online bill pay or mobile check deposit. Be sure to take advantage of these features to make managing your finances easier.
- Use it as part of your overall financial plan: Cash management accounts are just one part of your overall financial plan. Make sure to integrate them into your budget and use them in conjunction with other financial products, such as investment accounts and retirement accounts, to help you achieve your long-term financial goals.
Are cash management accounts FDIC-insured?
Yes, most cash management accounts (CMAs) are FDIC-insured, but the level of FDIC insurance may vary depending on how the CMA is structured. CMAs are often offered by non-bank financial institutions, such as robo-advisors or online brokerages, and these institutions may partner with one or more FDIC-insured banks to provide FDIC insurance on the funds held in the CMA.
In some cases, a CMA may be insured up to $1.25 million or more through multiple FDIC-insured banks that participate in the program. However, it’s important to note that FDIC insurance limits apply to the total amount of deposits you have across all accounts held at the same FDIC-insured bank or program. As of 2021, the standard FDIC insurance limit is $250,000 per depositor per insured bank.
It’s important to read the terms and conditions of a CMA carefully to understand how FDIC insurance is provided and what level of coverage is available. If you have questions or concerns about FDIC insurance for a CMA, you can contact the FDIC or the financial institution offering the account for more information.
Are cash management accounts used as primary checking accounts?
Cash management accounts (CMAs) can be used as primary checking accounts, but whether or not they are a good choice for this purpose depends on your individual financial needs and goals.
CMAs typically offer many of the features of a traditional checking account, such as debit cards, ATM access, and online bill payment, as well as a higher interest rate than many traditional checking accounts. Some CMAs also offer other benefits, such as no minimum balance requirements, no monthly maintenance fees, and unlimited transactions.
However, there are some potential drawbacks to using a CMA as a primary checking account. For example, CMAs may have limitations on the number of transactions you can make each month, and some may have higher fees for certain types of transactions or if you don’t meet certain requirements.
Additionally, CMAs may not offer the same level of customer service or branch access as traditional banks, and may not be as widely accepted for certain types of transactions, such as cashier’s checks or money orders.
Ultimately, whether or not a CMA is a good choice for your primary checking account depends on your individual financial situation and needs. It’s important to compare the features and fees of different CMAs and traditional checking accounts to find the best option for your needs.
Alternatives to cash management accounts
Some alternatives to cash management accounts include traditional savings accounts, money market accounts, certificates of deposit (CDs), and individual retirement accounts (IRAs). Each of these options has different features and benefits that may be more suitable for your financial goals and situation. It is important to do your research and compare the options before choosing the one that is right for you.
Are cash management accounts worth it?
Cash management accounts can be worth it for individuals who want an all-in-one financial product that offers high yields, FDIC insurance, and flexible cash management options. However, it’s important to evaluate the fees, minimum balance requirements, and other terms and conditions of different cash management accounts before opening one. Additionally, individuals who have more complex financial needs or who want to invest in a wider range of assets may benefit from using multiple financial products in conjunction with a cash management account. Ultimately, whether or not a cash management account is worth it will depend on an individual’s specific financial goals and circumstances.
Should I get cash management accounts?
Whether or not you should get a cash management account depends on your individual financial situation and goals. Cash management accounts can offer several benefits, including higher interest rates, FDIC insurance, and easy access to your money. However, they may also have limitations, such as withdrawal restrictions and fees.
If you’re looking for a place to store and manage your cash, a cash management account can be a great option. Consider your goals and needs, and compare the features and fees of different accounts to find one that works best for you. It’s always a good idea to do your research and ask questions before opening a new account.
The future of cash management accounts
Cash management accounts are becoming increasingly popular among consumers due to their convenience, high interest rates, and low fees. As technology continues to advance, we can expect to see even more innovative features and services being offered by cash management account providers. For example, some providers are already offering investment options and other wealth management tools, which could be further expanded in the future. Additionally, as more consumers become interested in sustainable and socially responsible investing, we may see cash management account providers offering more options in this area as well. Overall, the future of cash management accounts looks bright, and they will likely continue to be a popular choice for consumers looking for a convenient and flexible way to manage their money.
FAQs about the best cash management accounts
A cash management account is a financial account that combines the features of a checking account and a savings account in one place. A CMA typically offers a higher interest rate than a traditional checking account and may also offer features like a debit card, ATM access, and online bill payment.
A CMA typically works by pooling your funds into a single account that is then managed by the financial institution offering the account. Your funds may be invested in a variety of assets, including cash, money market funds, or other investment products, depending on the specific CMA.
The benefits of a CMA may include higher interest rates than traditional checking accounts, no minimum balance requirements or monthly maintenance fees, and the ability to make unlimited transactions. Some CMAs may also offer other benefits, such as investment management services, ATM fee reimbursements, or cashback rewards.
Many CMAs are FDIC-insured, but the level of FDIC insurance may vary depending on how the CMA is structured. It’s important to read the terms and conditions of a CMA carefully to understand how FDIC insurance is provided and what level of coverage is available.
Yes, a CMA can be used as a primary checking account, but whether or not it is a good choice for this purpose depends on your individual financial needs and goals. CMAs may have some limitations on the number of transactions you can make each month, and some may have higher fees for certain types of transactions.
To open a CMA, you typically need to apply with a financial institution that offers the account. The application process may involve providing personal information, such as your name, address, and Social Security number, as well as funding the account with an initial deposit.
Conclusion on the best cash management accounts
In conclusion, cash management accounts can be a great option for those looking to have a single account that offers features of both checking and savings accounts, along with investment opportunities. The best cash management accounts offer competitive interest rates, low fees, and a range of other useful features. When choosing a cash management account, it’s important to consider factors such as interest rates, fees, account minimums, investment options, and account security. By comparing the various options available, you can find the best cash management account to suit your needs and help you reach your financial goals.