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A checking account provides easy access to your cash for spending and paying bills, while your savings account earns interest on funds you don’t need right away. But there’s another account type — called a cash management account — that combines characteristics of savings and checking accounts into one.
Cash management accounts, or CMAs, are convenient for those who have a lot of cash sitting around and want to streamline their finances. But they’re not for everyone. Continue reading to learn how cash management accounts work and the pros and cons of using one.
A cash management account is a financial account that combines features of a checking account, savings account, and investment account into a single product. CMAs are typically offered by brokerage firms and fintech companies rather than traditional banks.
CMAs can earn competitive interest, like a savings account. They can also provide ATM access, check writing abilities, and bill pay, like a checking account. The goal is to give you a place to hold cash, earn interest, spend money, pay bills, and transfer funds without needing separate bank accounts.