Best Cash Management Accounts – Benzinga

Benzinga readers often choose Robinhood as the best cash management account.

As the financial landscape evolves, you can find many places to park cash for the long term and earn interest. The flexibility surrounding these accounts has increased drastically in the past decade. With interest rates above normal, anyone can lock in high interest rates on their extra cash.

Cash management accounts are often a one-stop shop for all things finance. They can supplement or replace your checking account, provide access to financial advisers and offer trading capabilities. Let’s take a look at the five best cash management accounts. 

• Best for Flexibility: Robinhood
• Best for High Interest Rates: Betterment
• Best for Personal Finance: Marcus by Goldman Sachs
• Best for Security: Fidelity
• Best for Everyday Use: Wealthfront

Robinhood is one of the more prominent names in the cash management space, as it offers flexibility and has minimal requirements to get started. It offers a suite of services to its users. The interface is sleek and easy to use with no account minimums or fees on trades. 

For cash management, Robinhood offers some of the highest rates in the industry at 4.9% APY. However, these rates are only accessible to Gold members at $5 per month. For non-Gold members, the interest rate is 1.5% APY. 

Other services offered by Robinhood include IRAs, IPO investing, 24/5 trading, crypto trading and options trading.

Betterment is a cash management account provider founded in 2010. With over $36 billion in assets under management (AUM), the firm is focused on electronic trading to provide a customized investing experience through designed portfolios with ongoing optimization. Additionally, it offers tax loss harvesting. The cash management account offers 4.75% APY, with no minimum balance, unlimited withdrawals and up to $2 million in FDIC insurance. 

Apart from trading, Betterment also offers a variety of other services, such as checking, financial advising, crypto and retirement. 

Its checking account has no fees and offers cash back and a handful of popular places. It is also FDIC insured up to $250,000. 

Marcus by Goldman Sachs is the retail cash management arm of the Wall Street giant. Marcus offers a variety of services to users as well as a handful of options for cash management. Cash management accounts come in the form of savings accounts and certificates of deposit (CDs): online savings account (4.3% APY); high-yield CD (5% APY for 12 months); no-penalty CD (4.5% APY for 12 months; can withdraw after 7 days); and a rate-bump CD (4.35% for 20 months; rate is fixed but has option to go higher if available). 

In terms of services offered, Marcus provides access to credit cards, personal loans and investing.

Fidelity is one of the largest brokers in the world and offers a safe and secure cash management account. The account is not technically a checking account, but it does provide users with access to a debit card and check writing. The account offers 2.6% APY. However, the most notable feature is its FDIC Deposit Sweep Program. This program allocates funds across three program banks for up to $735,000 in FDIC insurance. It charges no fees and requires no deposit minimums to start earning interest.

Fidelity also offers access to trading of stocks, crypto, fixed income and options as well as personal advising and retirement.

Wealthfront is a great platform for all things personal finance and daily use. While it offers a variety of services, the most noteworthy in terms of cash management is the checking account. The account acts as a typical checking account but also offers 4.8% APY, one of the highest in the industry. Additionally, there is up to $5 million in FDIC insurance. Wealthfront is a solid choice for those looking to earn extra interest on their daily-use checking accounts. 

In addition to cash management for checking, the firm also offers goal planning, customizable portfolios and a seamless user experience. 

A cash management account is a versatile financial tool that combines a traditional savings account, checking account and investment account. It offers the returns typically seen with savings accounts, the flexibility to withdraw and spend cash like a checking account and the ability to invest in securities through an investment account. 

Cash management accounts are typically offered by nonbank financial institutions. These firms usually do not have in-person branches and have low costs, allowing them to pass returns onto users. 

There are three main benefits of using a cash management account:

• Higher interest rates compared to regular savings accounts: Since cash management accounts typically have lower costs than traditional banks, they are able to offer higher interest rates in comparison to savings accounts at large banks. 
• Easy access to funds with check-writing and debit card facilities: Some cash management accounts also double as a checking account or provide similar services. This feature can allow you to earn interest without having to lock away your money for a certain period of time. 
• Potential to invest excess cash for higher returns: Cash management accounts are nearing 5% APY, which allows you to generate returns on cash. 

If you are interested in opening a cash management account, it is important to consider the following:

Cash management accounts offer different interest rates to their users. It is important to compare these rates across different accounts to find a rate you are comfortable with. 

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to provide backing to financial institutions. The amount of backing can vary by firm, so it is important to look at the amount of FDIC coverage each account has. 

Some cash management accounts can charge fees for holding your funds with them, allowing them to offer attractive rates. However, fees reduce your total return. It is important to look at rates net of fees to determine if the returns are attractive. 

Additionally, some accounts have minimum balance requirements. This is important to be aware of if you are deploying a smaller amount of money.

Cash management accounts can be a great tool to earn from interest on extra cash. You can choose from many cash management accounts that are easy to set up and offer high interest rates. However, it is important to consider the return on investment, FDIC insurance and account fees when deciding on which cash management account to set up.