5 best cash management accounts
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Updated: July 13, 2023
If you're looking for a flexible place to hold extra cash where it still earns meaningful interest, a cash management account could be what you need.
Many brokers and robo-advisors offer cash management accounts to make it easier for their customers to deposit and transact. And many leading accounts also offer perks like free ATM withdrawals, online bill payments, and are completely fee-free.
But interest rates and features between these accounts can vary, and rates also change regularly. That's why we're covering some of the best cash management accounts on the market right now that you can turn to.
The best cash management accounts right now
A cash management account won't generally earn as much as a leading high-yield savings account. But it's still a reliable, fixed-income option you can use to put your money to work.
Below, we've selected some of our favorite cash management accounts with the highest APYs and a range of perks.
Wealthfront Cash Account
Wealthfront Cash Account
Quick Facts
APY: 4.55%
Minimum Deposit: $1
Fees: $0
Wealthfront is a leading robo-advisor that's known for its portfolio customization options and low management fees. But it also has one of the best cash management accounts that currently pays 4.55% APY and just has a $1 funding requirement. You don't pay any account fees either, and you get up to $5 million in FDIC insurance.
We also like Wealthfront's Cash Account since it provides checking and ATM features. Customers get a free debit card and can withdraw funds fee-free from 19,000+ ATMs. You can also pay bills, receive checks, and enjoy unlimited fee-free transfers to your external accounts.
If you're looking for a robo-advisor, Wealthfront is already an excellent choice. But its cash management account is excellent even if you're just looking for somewhere to hold your emergency fund or idle cash.
Empower Cash™
Empower Cash™
Quick Facts
APY: 3.35% – 3.45%
Minimum Deposit: $0
Fees: $0
Empower is one of our favorite wealth management tools at Moneywise. For starters, it has plenty of free features like budgeting tools, a net worth tracker, and an investment fee analyzer. And if you invest at least $100,000, you can work with its advisory service to build a custom investment portfolio that matches your goals.
But Empower Cash, its cash management account, is also one of the most competitive accounts on the market even without the company's other features. It pays 3.35% APY to start and 3.45% APY for Empower Advisory clients. Plus, you get up to $2 million in FDIC insurance and don't pay any fees.
Empower Cash also supports joint accounts and an unlimited number of monthly transfers. Overall, it's one of the best cash management accounts as a standalone product, so the range of other features you can use only sweeten the deal.
Empower Personal Wealth, LLC (“EPW”) compensates Webpals Systems S. C LTD for new leads. Webpals Systems S. C LTD is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
Betterment Cash Reserve
Betterment Cash Reserve
Quick Facts
APY: 2.25%
Minimum Deposit: $10
Fees: $0
Like Wealthfront, Betterment is a popular robo-advisor with a very competitive cash management account, Betterment Cash Reserve. This account pays 2.25% APY and doesn't charge any fees. You also get up to $1 million in FDIC† insurance or up to $2 million for joint accounts.
Betterment Cash Reserve also supports unlimited transfers like its main competitors. And if you want checking account features, you can explore Betterment Checking to make it easier to spend your funds and also earn cash-back rewards.
Betterment Cash Reserve APY Disclosure - Annual percentage yield (variable) is as of 9/26/2022. Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities.For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.
Aspiration Spend and Save
Aspiration Spend & Save is a cash management account by Aspiration that's the best option if you're an eco-conscious consumer who also wants the highest interest rates. This account pays 3.00% APY for regular customers and 5.00% APY for Aspiration Plus customers. All customers also earn cash back for shopping at eco-friendly companies, and you get free ATM withdrawals at 55,000+ locations.
Aspiration has other eco-friendly features as well. For example, you can opt to plant a tree after every purchase by rounding up your purchase to the nearest dollar. And Aspiration also gives you an overall personal impact store so you can see how environmentally-friendly your spending habits are.
The regular plan uses a pay-what-is-fair model, so you choose how much to pay even if it's $0. As for Aspiration Plus, it costs $7.99 per month or $5.99 if you pay annually.
Fidelity
Fidelity
Quick Facts
APY: 2.47%
Minimum Deposit: $0
Fees: $0
Fidelity is a leading online broker that lets you trade securities like stocks, ETFs, mutual funds, and bonds. Its cash management account currently pays 2.47% APY and doesn't charge any monthly fees. There's no minimum deposit requirement either, and you get up to $1.25 million in FDIC insurance.
This account also comes with a debit card and has check-writing capabilities as well. Fidelity also reimburses ATM fees at ATMs with a Visa, Plus, or Star logo.
Ultimately, this isn't the best cash management account if you just want the highest APY. But Fidelity is an excellent, commission-free online broker, so housing your cash management account and brokerage account under one roof might make sense.
What is a cash management account?
Cash management accounts (CMAs) are an alternative to a high-yield savings or checking account that let you earn interest on your cash while still having the flexibility to transact. Oftentimes, robo-advisors, brokers, and investment apps offer cash management accounts to give their customers a competitive account to store extra cash.
The flexibility is really the selling point. The best cash management accounts allow for unlimited transactions to your external accounts. Many have debit cards and offer free withdrawals at certain ATMs as well to help you spend money more easily.
Factors to look for when choosing your account
- 1.
APY: Unsurprisingly, the APY of a cash management account is one of the most important factors since you want to ensure your idle cash earns as much as possible.
- 2.
Minimum Deposit: These days, most cash management accounts have very low minimum deposit requirements. This is also why CMAs can be superior to money market accounts in some instances. But still check minimum requirements, including for other products and services the company in question offers in case you want to use more than just its cash management account.
- 3.
Other Features: Features like free ATM withdrawals, online bill pay, and a debit card can make one cash management account better than others, even with slightly lower interest rates.
- 4.
Fees: Monthly fees aren't always a dealbreaker. For example, paying for Aspiration Plus might be worth it for the higher APY. But factor in fees to the interest rate to see if it's really worth paying for.
- 5.
Potential Bonuses: Robo-advisor and stock broker promotions are fairly common. Before opening an account, check to see if you can snag some free cash by becoming a new customer somewhere else.
Methodology
At Investor Junkie, our goal is to help our readers make the best possible financial decisions. And when it comes to finding the right home for your cash, we take this goal very seriously.
We've researched many cash management accounts and believe the ones that made this list are the current best options. Factors we consider when making our selections include fees, interest rates, and other perks like free ATM withdrawals.
The companies on this list didn't influence their inclusion or position in any way. Rather, this ranking represents our author and editorial team's opinions.
The bottom Line
A cash management account might not generate the same returns as certain growth stocks or leading high-yield savings accounts. But if you want a flexible account that still earns interest, it's a useful account to have. This is especially true if you're already a customer at a broker or robo-advisor that offers one of these top cash management accounts since it makes moving funds around even easier.
As interest rates change, our team will continue to update this article to make sure it reflects the current best accounts. But don't be afraid to keep an eye on changing rates as well. After all, nothing stops you from moving your money to new accounts and companies to ensure you're earning as much as possible.
†Betterment Cash Reserve Disclosure - Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option. Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC's Form ADV Part II.
Tom Blake is a staff writer who specializes in cryptocurrency, investing, and passive income.
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