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Wouldn’t it be great if you could invest, bank, and set aside your cash for short-term savings all in one spot? Well, now you can with the help of cash management accounts offered by online investment platforms, apps, and even robo advisors.
Many offer similar features to checking accounts (like the fact that they’re FDIC-insured) and have higher interest rates with low to no fees. Below is a look at some of the best cash management accounts so you can determine whether it’s the right choice for you.
10 Best Cash Management Accounts
1. Wealthfront Cash Account
A popular robo-advisor, Wealthfront offers a high annual percentage rate (APY). There are no limits on the number of transfers you can make, no maintenance fees, and your money is FDIC-insured for up to $8 million. You can now move money between accounts and the account comes with a debit card. The minimum initial deposit is only $1.
The APY applies to all account balances – there is no minimum or maximum balance required. Same-day withdrawals are free, and wire transfers are available for just $10. You can use the account to pay bills and send checks, as well as to deposit checks through mobile deposit. The Wealthfront Visa debit card can be used at 19,000 fee-free ATMs nationwide.
- Rate: % APY
- Fees: None
- FDIC Insurance Limit: $8 million
- Debit Card: Yes
Read our Wealthfront Cash Account Review
2. Betterment Cash Reserve
Betterment Cash Reserve doesn’t have any monthly maintenance or overdraft fees and no minimum account balance requirement. You’ll need $10 to open an account. While you don’t get a debit card, you can also open a Betterment checking account and get a Visa debit card. Extra perk: You can get rewards for using the card.
The account comes with unlimited withdrawals, as well as the ability to create multiple savings goals. Betterment provides automated tools to help you reach those goals.
- Rate: % APY, but currently paying 5.50% for the first three months when you open your first cash account.
- Fees: None
- FDIC Insurance Limit: $2 million ($4 million for joint accounts)
- Debit Card: No
3. Schwab Bank Investor Checking
Charles Schwab, the largest retail investment broker in the world, offers its Investor Checking account to holders of a Schwab One brokerage account. Not only does it pay interest, but there are also no monthly service fees or account minimums. If you are already a Schwab investor or plan to become one, the account links directly with your brokerage account. That will make for easy transfers between checking and investments.
The account comes with a Schwab Bank Visa Platinum Debit Card, which comes with unlimited ATM fee rebates worldwide, and no foreign transaction fees. You can also take advantage of online and mobile bill pay, and free standard checks. Schwab also offers money funds and certificates of deposit paying much higher rates of interest.
- Rate: 0.45% APY
- Fees: None
- FDIC Insurance Limit: $250,000
- Debit Card: Yes
4. InteractiveBrokers
InteractiveBrokers doesn’t offer a formal cash management account, but it has the equivalent of a brokerage account. You can earn interest on uninvested cash balances above $10,000 at a rate of 4.83% APY. Unfortunately, balances below $10,000 earn no interest.
The account can be used very much like a bank account. For example, you can use it to pay bills to individuals and businesses in the US using electronic checks. You can also accept mobile check deposits as well as automatic payroll deposits. It comes with a Debit MasterCard that features no foreign transaction fees.
- Rate: Up to 4.83% APY on cash balances over $10,000
- Fees: None
- FDIC Insurance Limit: $250,000
- Debit Card: Yes
5. Aspiration Spend & Save Account
What we like about Aspiration is that it’s very focused on its values, while still being able to offer account holders a high interest rate. When you use your debit card, Aspiration gives up to 3-5% cash back (or up to 10% with Aspiration Plus) on purchases at merchants that are part of its Conscious Coalition, including Warby Parker and Blue Apron.
Otherwise, you’ll still earn a decent everyday 0.5% back from larger retailers that scored high on its Aspiration Impact Measurement like Apple, Best Buy, Google, Microsoft, and CVS. Cash back earned is credited to your account monthly.
Choose your monthly fee, even if it’s zero, and get fee-free access to one of the largest (55,000+) ATM networks. All you need is $10 to open an account.
- Rate: 1.00% APY (3.00% APY for Aspiration Plus) in any month you have at least $500 in qualifying card transactions
- Fees: None or $7.99/month for Aspiration Plus
- FDIC Insurance Limit: Up to $1.25 million per depositor by being swept to program banks. (Visit fdoc.gov and aspiration.com/program-banks/ for more information.)
- Debit Card: Yes
6. LendingClub Rewards Checking Account
LendingClub Bank is free but you need to make a $100 opening deposit. Although the APY seems low, you do get other perks such as domestic ATM fee rebates worldwide and unlimited 1% cash back if you use your debit card to make purchases.
To qualify for the account, the account must be open for a minimum of 30 days, and you must either receive at least $1,000 in direct deposits into the account each month or keep an average balance of $1,000 or more in the account.
- Rate: 0.00% on balances below $2,500; 0.10% APY between $2,500 and $99,999.99; 0.15% APY on balances greater than $100,000
- Fees: None
- FDIC Insurance Limit: $250,000
- Debit Card: Yes
Read our LendingClub Bank Review
7. SoFi Money®
SoFi was known initially as a student loan lender but now it’s branched out into other products, like its cash management account. You’ll find many of the same features as you would a checking account except it offers a higher APY and there are no minimum opening deposit requirements. If you use your debit card at an ATM can be reimbursed for third-party fees you might incur.
There are no account fees, and you can use the debit card at more than 55,000 fee-free ATMs. It can accept both mobile check deposits and direct deposits and also provides automated bill pay. If you receive direct deposits of at least $1000 per month, you’ll automatically be entitled to overdraft coverage of up to $50 on debit card purchases.
- Rate: No longer offered
- Fees: None
- FDIC Insurance Limit: $1.5 million
- Debit Card: Yes
8. Empower Cash™
Empower Personal Cash doesn’t have a minimum opening deposit requirement, no monthly maintenance fees and you can make unlimited transactions. You can link the account to a bank account you’ve included on the Financial Dashboard, and transfer funds quickly and easily. The dashboard will also provide you with access to Investment Checkups, the Retirement Planner, and other free financial tools.
Although this account doesn’t have a debit card, Empower representatives say this feature will be rolling out soon.
- Rate: 4.70% APY
- Fees: None
- FDIC Insurance Limit: Up to $5 million
- Debit Card: No
9. Fidelity Cash Management Account
A popular brokerage firm, Fidelity might be for you if you want to work with a full-service company.
Like most of the other cash management accounts on this list, there are no monthly maintenance fees or minimum balance requirements. You’ll also get a debit card and you won’t be charged any ATM fees, plus all domestic third-party fees will be reimbursed.
If you want to make payments, Fidelity offers you free checkbooks, as well as bill pay. You can use the account to accept mobile deposits and move funds into your investment account seamlessly.
- Rate: 2.72% APY
- Fees: None
- FDIC Insurance Limit: $250,000, but may be higher depending on the number of participating banks
- Debit Card: Yes
10. Brex
Brex may be a good choice for a business with a high cash flow since you can open this account complete with a corporate credit card and accounting within minutes. There are no fees, though you’ll need at least $50,000 in your account to be able to access all the features. You’ll need to also give Brex access to your bank information since your credit (officially a charge card) limit will fluctuate depending on factors like your balance.
Brex may also be a good choice if you travel or do business internationally. The spending platform is available in more than 100 countries. You can use your account to invoice customers and clients and take advantage of the bill pay feature.
- Rate: 4.94% APY
- Fees: None
- FDIC insurance limit: $250,000
- Debit card: No, but account holders get a charge card
Pros and Cons of Cash Management Accounts
Pros
- A simple way to invest since many of these accounts are managed by brokerages
- Can offer higher interest rates compared to traditional bank accounts
- Offers benefits that are similar to checking and savings accounts
- Offers FDIC insurance protection through partner banks, often higher than what’s traditionally offered
Cons
- Some accounts may not have as many robust features compared to savings and checking accounts
- These types of accounts are online-only, a downside for those who want in-person services
- High-yield savings accounts may offer better interest rates
How We Came Up with the Best Cash Management Accounts
When doing our research, we wanted to find companies with good reputations and a history of consistent customer service. We also looked at other factors such as interest rates, account minimums, fees, and more.
The number and type of features offered by the account also figured into our decision. The more closely a cash management account matches a checking account in features, the more likely we were to include it.
Cash Management Account vs. High-Yield Checking
A cash management account offers similar features and services to a checking account. However, these types of accounts are provided by financial institutions like investment and brokerage firms instead of banks.
While they offer features and benefits similar to checking accounts, the primary advantage of cash management accounts is often the connection with the brokerage itself, or other unique services offered by the provider.
Cash Management Accounts vs Traditional Checking: What’s the Difference?
Traditional checking accounts often come with no to low-interest rates and are offered by both brick-and-mortar and online-only banks. Your money is FDIC-insured up to $250,000 and features may include a debit Visa card, checks, and more. A cash management account offers many of these same features except that it partners with banks to house your cash. While the cash management accounts aren’t themselves FDIC-insured, partner banks are.
Note: APY rates are up-to-date as of January 6, 2024. Please check each brand’s website for the most updated rates.
Frequently Asked Questions (FAQ)
Who has the best cash management accounts?
Any of the accounts included in this guide can be the best account, depending on your financial habits and personal preferences. The idea is to match up the cash management account with your financial profile, to make sure it’s a good fit.
You should also consider the additional services available through the provider. For example, if you want to combine cash management and investing, you may want to open an account with either Fidelity or Charles Schwab. If you frequently travel internationally, Brex may be the best choice for you.
What is the best account to store cash?
If you’re looking for a high-yield account that provides more FDIC insurance than the usual $250,000 limit, cash management accounts can be the best places to store your excess cash. If the account is offered by an investment broker, it will present an opportunity to earn high interest with the ability to transfer funds quickly to your investment account.
How safe are cash management accounts?
As long as a cash management account is covered by FDIC insurance, the account will be as safe as a bank account. Through participation in deposits with multiple banks, FDIC insurance coverage in a cash management account can reach several million dollars. Just be sure to never invest beyond the FDIC limit offered by the cash management account.
Should You Use a Cash Management Account?
Cash management accounts are growing in popularity because of the organizations the accounts are attached to. Most commonly, it’s an investment broker. The cash management account provides an excellent opportunity to earn high interest while maintaining liquidity within an investment account. You can transfer funds back and forth between a cash management account and your brokerage account as the need arises. Many cash management accounts now offer services very similar to banks, including debit cards with cash-back rewards, bill pay capability, check writing and mobile deposits.
That doesn’t necessarily mean having a cash management account will allow you to eliminate a traditional bank account. Banks provide many services that are not available with cash management accounts. For example, they offer local branches, certificates of deposit, notary services, and a large variety of loans.
Cash management accounts have certainly expanded their service menus, and have valuable tie-ins to significant service providers. However, they’re not quite at the point of being able to completely replace a bank account.
