Cash management accounts aren’t bank accounts, but they share some similarities. It’s a place to stash your cash, get your paycheck deposited, pay bills and earn some interest. Even though it might feel like a bank account, the top cash management accounts (CMAs) offer other features and benefits for consumers, including fee-free ATMs, a competitive annual percentage yield (APY) and no overdraft fees.
You’ll find cash management accounts at a financial institution other than a bank or credit union — often from a broker or robo-advisor. Some people use a cash management account instead of a checking or savings account, or in addition to one.
These types of cash accounts are often overlooked as a way to grow your savings at a much higher interest rate than you’ll find at traditional brick-and-mortar banks. Plus you won’t get charged monthly fees or overdraft fees, and there’s no account minimum balance requirements for the companies on our list.
Many robo-advisors and brokerages offer these services at no extra cost to you, so you can find a truly attractive cash management account with a ton of benefits.
Best cash management accounts in 2024
Wealthfront
Wealthfront is best known as a robo-advisor, but its cash management account is a formidable feature in its own right. It offers many of the most popular features: interest on balances, fee-free ATMs, checking benefits, a debit card and no monthly fees. It’s no wonder Wealthfront took home the Bankrate Award for best cash management account.
But you’ll also get some of the rarer features such as access to your direct deposit up to two days earlier and a portfolio line of credit, which allows you to borrow money against your investing balance with no credit check. You can link external accounts to gain a holistic view of your financial picture and track your net worth with the platform’s visually-appealing and customizable Plan feature. And, oh yeah, Wealthfront offers a top-flight investing service, too.
Fidelity
Fidelity has rightly earned a reputation as a customer-friendly outfit, and you’ll see that in its CMA. You won’t get socked with an account fee, nor does the account have a minimum. You’ll have ATM fees reimbursed when you use the account’s debit card, and you’ll be able to write checks using the account, along with access to bill pay and mobile check deposit. If you’d prefer to simply add a debit card or bill pay to your existing brokerage account, Fidelity can get that done, too.
You can really turn your brokerage account into an all-in-one account here without the hassle.
Charles Schwab
Charles Schwab has long been known as an investor-friendly institution, and it takes that rep to its cash management account at Schwab Bank. Schwab’s checking account has no monthly fees or account minimums, and offers unlimited ATM fee rebates across the world if you use the associated debit card. You won’t pay foreign transaction fees either.
If there’s a downside, it’s that Schwab’s interest rate isn’t competitive with other CMAs listed here. You’ll need to have a Schwab brokerage account to open a checking account, but you can open one at the same time, and you won’t pay fees on it. When you’re ready to invest, you can quickly shuffle money between the two accounts.
Betterment
Betterment and Wealthfront have been fierce competitors in the robo-advisor space for years, so it’s no surprise that they offer highly attractive (and highly competitive) features on their cash management accounts.
At Betterment, you’ll earn some of the best interest rates on your cash, enjoy access to fee-free ATMs, a debit card and more. It also checks all the boxes you’d expect from one of the best cash accounts with access to mobile check deposit, bill pay and check writing — all with no overdraft fees and zero monthly fees or foreign transaction fees. As an individual, you’ll also have up to $2 million (or $4 million for a joint account) in FDIC insurance on deposits through Betterment’s partner banks.
Interactive Brokers
Interactive Brokers offers one of the best trading experiences but also has attractive cash management features that can make it a true “go anywhere” account. All funds will be held in your investing account, but with the associated debit card, you can pay bills straight from the account. If you run over your available cash, you’ll run up a margin balance, and pay interest rates that are just 1.5 percent above the benchmark rate – so cheap.
You’ll also be able to use mobile check deposit, pay bills to any payee and have automatic payroll deposits. Among brokers, Interactive Brokers pays among the industry’s best rates for cash balances.
Pros and cons of cash management accounts
Pros
- Easier to invest: With many brokerage firms and robo-advisors offering cash management accounts, it’s easy to start investing your savings.
- Interest boost: Many cash management accounts earn higher interest than is typically available through traditional bank savings accounts.
- FDIC insurance: Many cash management accounts funnel your savings to multiple banks in their program, which allows you to have FDIC insurance on your funds beyond the typical $250,000 limit.
Cons
- Interest below high-yield savings accounts: Though cash management accounts can earn higher interest rates than traditional banks, they may fall short of those offered by high-yield savings accounts.
- Online only: Many cash management accounts are offered by institutions that exist only online, so if you prefer to bank in-person, it might not be a good fit for you.
- Minimum balances: Some cash management accounts require high minimum balances or regular deposits in order to receive all the features offered.
What is the difference between a savings account and a cash management account?
Cash management accounts are typically offered by non-bank financial institutions such as brokerage firms or robo-advisors. They come with many of the same features as traditional savings and checking accounts, but also have some investment options. A savings account is usually offered by traditional brick-and-mortar banks and doesn’t offer the ability to invest. You’ll also typically earn less interest in a traditional savings account than what is offered by many cash management accounts.
The distinction between a brokerage account and a traditional bank account continues to collapse. Increasingly, more financial institutions do it all. So in many cases you could actually use the cash management account as a primary bank account even if you don’t take advantage of the related investing features at all.
And that’s a reason to check out brokers and robo-advisors to see how they compete against a traditional bank and whether it might make sense to move at least some of your business there.
Bottom line
While you might be searching for a traditional bank account or even a popular fintech app, don’t overlook the benefits of using a cash management account from a broker or robo-advisor. You often won’t have to use the investing features, but they’ll be there if you want to bring everything under one roof.
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