What is a cash management account and why should I get one?

A cash management account is a versatile financial product that combines the best features of traditional banking and investment accounts under one roof. These innovative accounts effectively blend the functionality of checking, savings, and brokerage accounts, offering customers a comprehensive solution for managing their money. Unlike conventional bank accounts, CMAs provide the convenience of everyday banking alongside potential investment opportunities.

These modern financial solutions are primarily offered by nonbank financial institutions, particularly brokerage firms and financial technology companies. Through strategic partnerships with FDIC-insured banks, these providers ensure customer deposits maintain the same level of protection as traditional bank accounts while delivering enhanced flexibility and features. These institutions' unique positioning in the financial marketplace allows them to offer competitive interest rates and reduced fees compared to conventional banking options.

Cash management accounts combine multiple financial capabilities into one streamlined package, offering a comprehensive suite of banking and investment features. These features are designed to provide the convenience of traditional banking while maintaining the advantages of investment accounts.

Debit cards

Cash management accounts typically come with a debit card that functions similarly to traditional bank debit cards. These cards can be used for purchases at any merchant that accepts major card networks and for ATM withdrawals worldwide. Many CMA providers offer premium benefits with their debit cards, such as ATM fee reimbursements and no foreign transaction fees.

Checkbooks

Despite the digital nature of CMAs, most providers offer traditional checkbooks to account holders. This feature ensures you can make payments in situations where checks are required or preferred. The check-writing process works just like a traditional bank account, with the added benefit that some CMA providers offer unlimited free checks.

Money transfers

CMAs excel in money movement capabilities, offering various transfer options including ACH transfers, wire transfers, and peer-to-peer payments. These accounts typically support domestic and international transfers, often with competitive exchange rates. Many providers offer free ACH transfers and more competitive wire transfer fees compared to traditional banks.

Bill pay services

The bill payment features in CMAs allow you to manage all your recurring and one-time payments from a single platform. Users can schedule automatic payments, set up recurring bills, and even mail physical checks to payees directly from their account interface. Many CMA providers offer these services without additional fees.

Overdraft protection

CMA overdraft protection often works differently from traditional bank accounts. Instead of charging high overdraft fees, many CMA providers offer more flexible solutions. These might include automatically drawing from a linked investment account or providing a short-term buffer period to deposit funds. Some providers even offer interest-free grace periods to cover temporary shortfalls.

FDIC insurance coverage

While CMAs are typically offered by non-bank institutions, they partner with FDIC-insured banks to protect customer deposits. Through these partnerships, cash balances in CMAs receive the same FDIC insurance coverage as traditional bank accounts — typically up to $250,000 per depositor, per bank. Some CMA providers even work with multiple bank partners to offer coverage well beyond the standard FDIC limits.

Any cash flow management guide will tell you how important the right banking partner is for business success. Understanding the advantages of cash management accounts can help you decide which is the right choice for your financial needs. Here are some advantages that set them apart from traditional banking products.

Convenience

Managing multiple financial accounts can be time-consuming and complicated. CMAs streamline your financial life by combining checking, savings, and investment capabilities in one place. This consolidation means you can handle all your financial tasks – from paying bills to managing investments – through a single platform. The unified dashboard typically offered by CMA providers makes it easy to track your spending, monitor your investments, and maintain a clear overview of your financial health without juggling multiple login credentials or switching between different accounts.

Low fees

Too many accounts come with hidden business banking fees. CMAs often have lower fees than traditional banks, particularly those offered by online-only financial institutions. Many providers won’t charge monthly maintenance fees, minimum balance fees, or transaction fees. Since these institutions typically have lower overhead costs than brick-and-mortar banks, they can pass these savings on to customers. Additionally, many CMA providers offer free ATM withdrawals worldwide and reimburse ATM fees charged by other institutions, making cash access more economical.

Earning potential

One of the most attractive features of CMAs is their competitive interest rates on cash balances. Unlike traditional checking accounts that typically offer minimal or no interest, CMAs often provide higher yields comparable to high-yield savings accounts. This means your money can work harder for you even when it's not invested. Some providers also offer automatic sweep features that move excess cash into higher-yielding investment options, maximizing your earning potential while maintaining easy access to your funds.

While cash management accounts offer numerous benefits for high-growth businesses, it's important to understand their potential limitations before choosing one as your primary financial account.

Limited cash deposit options

Most CMAs operate primarily in the digital space, which can make depositing physical cash challenging. Unlike traditional banks with extensive ATM networks that accept cash deposits, CMA providers typically offer limited or no options for cash deposits. While some providers partner with ATM networks to enable cash deposits, this service isn't universally available, potentially making CMAs less convenient for those who frequently handle cash.

Restricted specialty banking services

Some traditional banking services may be limited or unavailable with CMAs. For example, obtaining cashier's checks can be difficult or impossible through many CMA providers. This limitation could be problematic if you need these specialized banking services for major transactions like buying a home or paying certain types of bills that require certified funds.

Limited in-person support

Most CMA providers operate primarily through digital channels, offering customer support via phone, email, or chat rather than face-to-face interaction. While some providers with brokerage firm affiliations may offer in-branch assistance, the majority rely on remote support options. This can be a turn-off for those who prefer personal interactions or advanced assistance with complex banking issues.

No foreign currency services

Unlike traditional banks, most CMAs don't offer foreign currency exchange services or the ability to order foreign currency before international travel. While many CMAs offer favorable international ATM fee reimbursement policies and competitive exchange rates for card transactions abroad, the inability to obtain physical foreign currency in advance might be inconvenient for international travelers who prefer to carry local currency.

These limitations may or may not be significant depending on your banking needs and preferences. For those who primarily conduct their financial activities digitally and rarely need specialized banking services, these disadvantages might have minimal impact on their banking experience.

When evaluating financial account options, it's helpful to understand how cash management accounts compare to more traditional banking and investment products. Each account type has its distinct characteristics and use cases.

Cash management account vs. checking account

Traditional checking accounts are designed primarily for everyday transactions, while CMAs offer a more comprehensive suite of services. Where checking accounts typically charge monthly maintenance fees and have minimum balance requirements, CMAs often eliminate these costs entirely. CMAs also tend to provide more modern digital banking features and tools compared to traditional checking accounts. However, one key difference is that checking accounts offer access to physical bank branches, while CMA providers operate primarily through digital channels with limited in-person services.

Cash management account vs. savings account

While traditional savings accounts focus solely on storing money and earning interest, CMAs provide similar interest-earning potential with added flexibility. High-yield savings accounts might offer comparable interest rates to CMAs, but they often come with transaction limits and restrictions on withdrawals. CMAs typically have no such limitations, allowing unlimited transactions while still earning competitive yields. Additionally, CMAs eliminate the need to transfer funds between accounts since they combine savings and spending capabilities in one place.

Cash management account vs. brokerage account

Traditional brokerage accounts excel at investment capabilities but often lack everyday banking features. CMAs bridge this gap by offering basic investment features alongside traditional banking services. While they may not provide the full range of investment options available in dedicated brokerage accounts, CMAs allow you to hold cash, make daily transactions, and maintain some investment exposure simultaneously. This hybrid approach makes CMAs particularly useful for those who want to keep their money accessible while maintaining a connection to investment opportunities.

When choosing a cash management account, it's essential to look beyond basic features and consider how the account will serve your needs both now and in the future. The foundation of any great CMA starts with competitive interest rates on cash balances and a transparent fee structure. The best accounts eliminate common pain points by offering zero monthly maintenance fees, no minimum balance requirements, and complimentary services that traditionally incur charges, such as wire transfers and international transactions. These accounts should work proactively for you, automatically optimizing your returns by moving idle cash into higher-yielding options without requiring your constant attention.

Technology and integration capabilities have become increasingly important in modern banking, transforming how we manage our finances. Leading CMA providers understand this and offer seamless connections with essential business tools, from accounting software to expense management platforms. What sets exceptional providers apart is their attention to security alongside innovation — they combine robust FDIC insurance through partner banks with advanced fraud prevention systems and modern features like virtual business credit cards. These technological advantages shouldn't come at the expense of usability; the best platforms make complex financial management feel effortless.

Perhaps most importantly, your CMA should offer room for growth and additional value beyond basic banking services. This might come in the form of generous rewards programs that align with business spending patterns, offering substantial cash back on everyday expenses like software subscriptions and travel purchases. The most forward-thinking providers take this a step further by offering scalable cash management solutions that evolve with your needs. Rather than adhering to traditional banking models, these CMAs might extend credit lines based on your actual cash flow and spending patterns, making them particularly valuable for dynamic, growing organizations. This approach to banking — one that combines immediate benefits with long-term flexibility — represents the future of financial management.

When evaluating the top cash management accounts in the market, the Brex business account stands out as a particularly compelling option, especially for growing businesses and startups. The Brex business account combines a full-featured checking account provided through Column N.A., Member FDIC, as well as expanded Treasury and Vault services to help startups and other businesses get the most out of their hard-earned cash from day one.

The Brex business account eliminates common banking pain points by offering zero fees for wire transfers (both domestic and international), ACH payments, and monthly maintenance. The platform includes a powerful expense management automation integrated directly into the banking experience, making it simple to track and control company spending. Additionally, businesses can create unlimited virtual cards, automate receipt matching, and manage all expenses through a single, intuitive dashboard.

What makes the Brex business account exceptional is the industry-leading Brex rewards program, designed specifically for modern businesses. Companies earn points on every purchase, with up to 7x multipliers on common business expenses like ride-sharing services, software subscriptions, and travel booked through our platform. These rewards can be redeemed instantly for cash back, providing immediate value for your business spending.

Brex takes a forward-thinking approach to how businesses access credit and use their funds. The Brex corporate card offers credit lines based on cash flow and company spending patterns rather than traditional metrics. This innovative approach, combined with features like instant vendor payment automation and integrated accounting automation software, makes it an ideal solution for growing companies. Plus, with FDIC insurance through our partner banks and dedicated account managers, businesses can feel confident knowing we provide both security and support as they scale.

Customers using Brex business accounts appreciate the access, protection, and ability to quickly transfer cash between accounts while maximizing yield.

For many, the ability to extend their financial runway has been a game-changer. “The yield we earn from Brex Treasury has materially extended our runway,” says Sahil Hasan, CEO and co-founder of Dots, an early-stage company transforming payouts. “As a startup trying to scale, that was such a value add.”

Others highlight the benefits of earning strong yields while keeping cash readily available for daily operations. “Brex business account allows us to keep our cash in money market accounts earning a strong yield while still accessible for daily operations,” says Jesse Kallman, founder and CEO of Danti. Adam Kaczmarek, co-founder and CTO of Loops, agrees: “Brex gives us a simple place to put all of our money. We know that we're getting decent yield off of our rainy-day funds, while also having easy access to the cash we need for payroll and day-to-day operations.”

Beyond yield, customers value how Brex helps optimize cash flow and improve operational efficiency. “Brex is so fast and easy to use that I don't have to spend time worrying about our finances,” says Ori Zohar, co-founder & co-CEO of Burlap & Barrel. “I can instantly move money from our cash account to our card, plus the longer payment terms help with our cash flow.”

For companies prioritizing security and flexibility, Brex’s banking partnerships provide additional peace of mind. “The fact that Brex partners with banks that allow us a greater FDIC insurance balance, as well as access to money markets generating above-bank yield, has given us both security and reduced our operational overhead. That’s been really important for us,” says Liz Braman, CEO of Revolution RE.

Cash management accounts represent a significant evolution in modern banking, offering a powerful combination of traditional banking services, investment capabilities, and digital convenience.

Brex leads this financial revolution by offering a complete suite of solutions including business accounts for startups, corporate cards, and sophisticated accounting automation. Our platform goes beyond basic banking to give businesses the tools they need to scale efficiently. Through the combination of our business account, corporate card program with industry-leading rewards, and automated accounting features, Brex delivers a comprehensive financial stack that grows with your business.

Don't let outdated banking solutions hold your business back. Sign up for Brex today and join thousands of forward-thinking companies that have already transformed their financial operations. Our seamless onboarding process means you can start experiencing the benefits of business banking within minutes. Whether you're a startup looking to scale or an established business seeking more efficient financial tools, Brex provides the innovative solutions you need to succeed in today's fast-paced business environment.

Visit brex.com now to get started with a banking partner that understands and supports your business goals.

* Brex is a financial technology company, not a bank. Checking accounts and banking services provided by Column N.A., Member FDIC. Treasury and Vault are offered by Brex Treasury LLC, Member FINRA and SIPC. Vault accounts allow customers to sweep cash into program banks. Brex Treasury is not a bank nor an investment adviser. Yield is variable.