Best Cash Management Accounts

Cash management accounts combine the features of savings, checking, and investment account. Compare the best cash management accounts in this guide.

Empower Personal Cash

• 4.70% APY
• $0 monthly fee
• Withdraw up to $100k per day

Funds placed in the Empower Personal Cash Program are FDIC insured by program banks up to an aggregate of $5,000,000. (up to $10 million for joint accounts)

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You probably have a checking, savings, and retirement account - plus investment accounts. But how do you keep track of it all?

Enter: The cash management account.

Cash management accounts (CMAs) are less common than other account types, but they provide a simpler way to manage your personal finances.

Below, review the pros and cons of CMAs to see if they're a good fit for you.

What is a Cash Management Account?

Cash management accounts are typically offered by brokerage firms (like Fidelity). They're an alternative to traditional banking.

CMAs offer features similar to checking accounts, such as debit cards, checkbooks, and online bill pay. Since they're often connected to an investment account, they may also have options to automatically invest your extra cash.

Because CMAs can combine the features of savings, checking, and investment accounts in one place, the primary benefit is simplicity and convenience.

Pros and Cons: Cash Management Accounts

Cash management accounts offer several specific benefits that savings and checking accounts do not. However, there is always a trade-off, and your decision to open a CMA largely comes down to which features you prioritize most.

Pros:

• Simplifies saving and spending into one convenient location
  
• Avoids the withdrawal and transfer limits of savings accounts
  
• Ability to earn interest, unlike most checking accounts
  
• Potentially higher FDIC insurance than checking and savings accounts
  
• Low or no fees — CMA brokerages are compensated by the partner banks, not the account owner

Cons:

• Lack of in-person customer service
  
• No physical locations
  
• Higher potential for error due to frequent sweeping of funds between accounts

What is the Best Cash Management Account?

Below are the nine most popular cash management accounts broken down by their features, benefits, and downsides. Review each to decide which one is right for you.

1. Fidelity Cash Management Account

Fidelity's cash management account offers a debit card with access to a huge network of over 1 million ATMs.

You get a free debit card, check writing, mobile check deposits, and online bill pay.

You can opt in to receive alerts when you have extra cash in your account. This gives you the option to invest it so your money is working for you.

Your account is FDIC-insured up to $1.25 million through partner banks.^[1]

• Pros: No minimum balance requirement, no opening deposit requirement, and no overdraft fees
  
• Cons: Low APY

2. Charles Schwab Cash Management Account

This popular discount broker doesn't offer a standalone cash management account — customers must first open a Schwab One brokerage account (but you don't have to use it if you don't want). Then, you can link a fee-free Schwab Bank checking account.

The checking feature provides online bill pay, mobile check deposit, and a debit card with contactless payment compatibility with Samsung Pay, Apple Pay, and Google Pay.

There are no foreign transaction fees when you use your debit card abroad. Plus, you can use any ATM in the world and get the fees reimbursed.

• Pros: Unlimited ATM fee rebates worldwide
  
• Cons: Low APY

3. SoFi Cash Management Account

SoFi brings the advantages of an online bank to the world of cash management accounts. You get both a checking and savings account.

You can earn 4.20% APY on savings balances with direct deposit (1.20% APY without) and 0.50% APY on checking balances. This interest is earned on both your checking and savings balance.

Plus, if you have at least $1,000 in direct deposit, you can get no-fee overdraft coverage. If you accidentally overdraw your account, SoFi will cover you up to $50. You can also get your paycheck up to 2 days early.

• Pros: No monthly fees, no overdraft fees, high APY
  
• Cons: The best features require that you set up direct deposit

4. Wealthfront Cash Management Account

Wealthfront is a popular robo-advisor that also has an excellent free cash management account. It's a great choice if you're already using (or want to use) Wealthfront for investing.

You get 5.00% APY. Plus, you can send checks, deposit checks, and pay bills.

But the best part of this account is how easy it is to save for your money goals. You can create multiple savings goals and say how much you want to save for each. And Wealthfront will even automatically invest your extra cash.

This account comes with $1 million in FDIC insurance through partner banks.^[2]

• Pros: No account fees, automatic savings rules
  
• Cons: Fees for cash deposits

5. Betterment Checking and Cash Reserve

Betterment is one of the most well known robo advisors. It offers a separate Checking account with a debit card and a Cash Reserve savings account.

The Cash Reserve account offers 4.75%. You can create savings buckets for specific goals like "Vacation" or "Taxes."

The Checking account has no monthly fees, overdraft fees, ATM fees, or foreign transaction fees. It also earns cashback when you make purchases at thousands of popular retailers.

Both accounts let you open as either a single or joint account. The Checking account has FDIC insurance up to $250,000,^[3] while the Cash Reserve account offers up to $1 million.^[4]

• Pros: Competitive APY
  
• Cons: No debit card unless you sign up for Betterment Checking

6. Empower Personal Cash

Empower 's offering is best suited for high-net-worth individuals due to its large withdrawal and wire limits.

Empower Personal Cash

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• Minimum Deposit to Open: $0
• Balance Requirement: $0
• Monthly Fee: $0
• APY: 4.70%

This account functions more like a savings account. There is no debit card, so you can't take out cash or make purchases. You can only move money electronically.

But it has very high limits. You can withdraw up to $100,000 per day. If you need to make an even bigger transfer, you can make wire transfers up to $1 million with no fees.

This account comes with up to an aggregate of $2 million in FDIC insurance and no monthly fees.^[5]

• Pros: High withdrawal limits
  
• Cons: No debit card or checkbook

7. Aspiration Spend & Save Account

Aspiration offers hands-down the best cash management accounts available as of this writing. It stands out from other accounts for its strong features plus the commitment to do good for our planet.

Your savings get 3.00% APY when you spend $1,000 per month on your debit card. And plus, you can Get up to 5% cashback when you shop with socially-conscious retailers like TOMS and Warby Parker.

If you upgrade to Aspiration Plus, you get even higher interest and cash back rewards.

We love its environmental mission. You can plant a tree with every debit card purchase if you choose to round up. And your deposits don't go towards fossil fuel projects that harm the planet

• Pros: Great rates on cash back and APY, plant a tree with
  
• Cons: Monthly fee to get the best perks

Cash Management Account vs Brokerage Account

A cash management account is technically a type of brokerage account, but there are some key distinctions between a standard brokerage account and a CMA.

Key Differences

• Investments in a brokerage account have the potential to earn more money
  
• CMAs are generally risk-free; brokerage accounts are higher risk (equities and bonds)
  
• CMAs have set interest rates; brokerage account performance varies based on the market
  
• Brokerage accounts are SIPC-insured by the brokerage institution; CMAs are typically FDIC-insured by partner banks
  
• CMAs usually come with checking account features, such as a debit card; brokerage accounts do not

Cash Management Account vs Checking Account

As stated above, many CMAs offer similar features to traditional checking accounts, like debit cards, checkbooks, and online bill pay. However, there are several differences between these accounts.

Key Differences

• Cash management accounts are investment accounts, not bank accounts, so they operate under different rules and regulations than checking accounts
  
• CMAs usually pay some interest; most checking accounts do not
  
• All checking accounts are spending accounts that offer payment technology like debit cards and paper checks; only some CMAs offer these tools
  
• CMAs may or may not be FDIC-insured, whereas all checking accounts are required by law to be FDIC-insured for $250,000 per account, per owner.^[6]

The Bottom Line: Are Cash Management Accounts Worth It?

If you're looking for the simplicity of streamlining all of your banking and low-risk investments into one convenient location, cash management accounts accomplish just that.

However, if you're looking to maximize the income potential of your idle cash, there are better options that offer much higher APY, such as high-yield savings accounts, high-yield checking accounts, and certificates of deposit.

If you're looking for a CMA, we highly recommend Aspiration as our top pick. But other online brokerages like SoFi and Wealthfront offer solid product features as well.

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