Five Best Cash Management Accounts

Cash management accounts, like bank accounts, give a location to store money for spending or saving. Banks rarely administer cash management accounts; instead, fintechs or neobanks own them.

When selecting a cash management account, ensure sure the funds are backed by a U.S. bank or credit union with FDIC or NCUA insurance up to $250,000 per account. Some cash management accounts even provide FDIC insurance in excess of $250,000. This is accomplished by dividing deposits among multiple accounts. Many cash management accounts provide APYs on savings that are substantially above the national average.

1. Wealthfront Cash Account.

Wealthfront has 600,000 clients and $43 billion in assets, making it one of the largest and most recognized cash management accounts available today. It provides up to $5 million in FDIC insurance through partner banks and connects to your Wealthfront investing account for convenient transactions.

What differentiates it? Wealthfront offers the same features of popular online banks, including no fees, online bill pay, and access to over 19,000 fee-free ATMs, but without the fees or exorbitant interest rates.

Pros

No monthly or overdraft fees.

Up to 5.05% APY on savings

Unlimited withdrawals

$1 is the minimum opening balance.

Con

No branches.

No paper checks.

What to Look For

Wealthfront offers a high APY of 4.55% on savings for both new and current customers. However, if you refer friends to Wealthfront and they sign up, you can increase the APY to 5.05% for both of you for three months. If the APY changes within those three months, you and your friend will both receive Wealthfront's current APY plus 0.50%.

2. Aspiration Spend and save

The teacher gave the children a test. Desire: Use money sensibly for spending and savings. The Aspiration Spend & Save account offers cash back on debit card transactions, a 1.00% APY on savings, and a 3.00% APY with an Aspiration Plus account.

What sets it apart? Aspiration is recognized by its commitment to environmental preservation and sustainable development. As an Aspiration member, you can help combat climate change by having Aspiration plant a tree for every purchase, earn cash back when shopping at socially and environmentally responsible businesses, and reduce your carbon footprint with gas offsets (exclusive to Aspiration Plus members).

Pros

Support the environment while saving and earning interest.

Create your own monthly charge with a "Pay What Is Fair" account.

Earn cashback on some debit card purchases.

The FDIC insures funds up to $2.5 million per depositor through partners.

Pros: Free access to over 55,000 Allpoint ATMs.

Con

A monthly minimum commitment of $1,000 is required to obtain a 1.00% annual percentage yield on savings Aspiration Plus charges a $8 monthly fee ($6 per month if paid annually).

Minimum opening deposit: $10.

What to Look For

The Aspiration Plus account, which costs $6 per month, includes additional benefits such as Purchase Assurance for products damaged or stolen within 90 days of purchase with your Aspiration debit card, one out-of-network ATM reimbursement per month, and carbon offsets for gas purchases.

3. Improved Cash Reserve

Betterment Cash Reserve is a cash management account that connects to both your Betterment investment account and your Betterment checking account. Betterment provides automated investing with portfolio rebalancing and a variety of handpicked portfolios to choose from. The Cash Reserve account allows you to easily manage your money and move it from investments to spending accounts.

Why Does It Stand Out? Betterment provides a high 5.50% APY on all Cash Reserve account balances. There are no monthly costs. Funds are FDIC-insured up to $2 million per account holder through a network of partner banks that includes well-known banking companies such as Citi®, Truist, HSBC, and Barclays.

Betterment also provides a checking account with a linked Visa debit card. You can move funds between your checking and Cash Reserve accounts instantaneously, and there is no limit to the amount of transfers each month. In addition, you can earn up to 5% cash back when you use your debit card at several famous businesses and e-commerce sites, including as Costco, Sam's Club, and Aeropostale.

Pros

No monthly costs.

Easy access to your funds.

Cash Reserve offers a 5.50% APY on all accounts and comes with a rewards debit card.

Minimum opening deposit: $10.

What to Look For

With a Betterment checking account, you may even use paper checks, which many neobanks do not provide.

4. Vanguard Cash Plus Account.

The Vanguard Cash Plus Account is a cash management account with a bank sweep that transfers your funds to a network of program banks that are FDIC insured. It also provides a competitive 4.7% APY for short-term savings. You can also transfer your assets to one of the five Vanguard money market funds accessible in your Cash Plus Account.

Why Does It Stand Out? The bank sweep is a low-risk area to save cash for both urgent needs and emergencies.

Pros

Manage your cash and investments from one location.

Short-term savings offer an above-average yield of 4.7% APY.

There are no fees to open the account, no minimum balance to maintain, and no transfer limitations. The FDIC insures individual accounts up to $1.25 million and joint accounts up to $2.5 million.

Con

No physical branches.

Other options provide higher APYs.

What to Look For

The Vanguard Cash Plus Account pays a 4.7% annual percentage yield and allows you to maintain both your short-term cash and your investments in one location, as well as diversify into five other money market funds.

5 Fidelity Cash Management Account

The Fidelity Cash Management account makes it simple to keep your money safe while also making it available for investment through your Fidelity Investment account.

Why Does It Stand Out? A Fidelity Cash Management account is ideal for customers who currently invest with Fidelity and want a convenient place to hold their spending money with FDIC insurance coverage of up to $5 million per account via partner institutions. The account features a 2.72% APY and no monthly fees. You can write checks and use your Fidelity account for mobile check deposit and online bill payment.

Pros

No monthly costs.

Links to your Fidelity Investments: 2.72% APY.

Up to $5 million in FDIC insurance and ATM charge reimbursement.

Con

Other cash management accounts have better APYs.