Cash Management Accounts 101

Are you looking for a place to safeguard your money and grow it by supporting beneficial causes?  

In the past, an individual’s options were mostly limited to legacy banking accounts and financial systems. But the world of finance is evolving beyond its archaic roots. Now, newer, more efficient options are available to individuals who want to optimize their savings—some of which align your finances with your core values.

For that, cash management accounts are becoming an increasingly attractive solution that millions of Americans are embracing.

What Is a Cash Management Account?

Cash management accounts—also known as CMAs—are a modern alternative banking option to a traditional bank account, which includes the checking account and savings account. They’re digital tools individuals can use to manage their money, invest, make payments, and earn above-average interest. 

Typically, a CMA is offered by a nonbank financial institution like a broker-dealer, online investment firm, mobile trading app, or robo financial advisor. Although it depends on the organization, CMA members typically have access to a debit card, checkbook, and digital banking (like a checking account) while also earning interest (like a savings account). 

Account holders can utilize many of the same financial management services they’re familiar with. They can deposit and withdraw funds from their account at will, access ATMs worldwide, set up online billing, and take advantage of several other attractive features.     

In some instances, a cash management account can provide benefits that extend beyond what a bank would provide. For instance, the company may also be tied to a social or philanthropic cause where CMA membership and spending help improve the state of the world. 

How Does a Cash Management Account Work?

Cash management accounts are digital financial depositories where account holders can secure their savings while earning high-yield interest. Unlike traditional banks, deposits may be split between various other partner bank branches. 

For instance, if you had $2 million in a cash management account, it might be split into chunks of $400,000 at five different branches. Diversifying the funds provides greater security since each location would likely come with at least $250,000 in FDIC insurance coverage. In this case, the account holder would have $1.25 million of their funds secured by FDIC coverage with a CMA as opposed to just $250,000 at a single bank.  

Whenever a user deposits or withdraws money, the CMA custodian will automatically transfer funds to or from the optimal account, thus ensuring that as much money can remain insured as possible. 

Cash Management Account vs. Checking Account

So, what are the major differences between cash management and checking accounts?

At a glance, both options have pronounced parallels, including access to a check and debit card, online banking and mobile account management, ATM access, and so on. With that being said, the three primary differences are: 

  1. CMAs yield a much higher interest, on par with (if not higher than) a savings account, and offer little to no fees for their services.
  2. CMAs don’t have brick-and-mortar locations so there is no in-person customer support. 
  3. CMAs make it possible to perform banking and investing from the same place.

Benefits of a Cash Management Account   

What makes cash management accounts an upgrade over conventional bank accounts? Although every CMA differs, common benefits might include: 

Convenient banking

A CMA modernizes financial savings by centralizing banking and investing services. Instead of fracturing across various apps and branches, customers can manage their finances and receive professional cash management service all from a central hub. Enhanced connectivity allows CMA account holders to move money quickly should an investment opportunity arise. 

Improved cash management

The ability to monitor your finances from a singular location saves time and affords account CMA holders greater control and oversight over their money. In some cases, individuals may be able to link to external bank accounts to further improve financial flexibility and accountability.     

Low fees, high interest

The national average interest rate on a checking account and savings account is .03% and .06%, respectively.Although rates vary, a CMA typically provides members a higher rate at a lower than average account fee, with some organizations omitting fees entirely. 

Popular banking services

CMAs typically provide many of the same services one might find at a traditional bank, including: 

  • Access to zero-fee ATM networks
  • Access to third-party payment sites
  • Direct deposit
  • Online bill pay

Heightened financial security

As mentioned, each partner bank location provides FDIC protection of $250,000. So, larger accounts would have coverage surpassing normal limits in case of a banking failure. 

Digital bank management

CMAs eschew brick-and-mortar locations for the modern convenience of mobile and online account management, making them ideal for a customer that doesn’t want to constantly make in-person trips to the nearest branch. 

Considerations for a Finding a Cash Management Account 

With several options available, how do you determine which cash management account is best for your financial situation? As you weigh the various different structures, be sure to consider the following factors:  

  • APY – What is the account’s stated annual percentage yield? This figure will impact how much you can earn on your money. Remember to factor in how rates may change or how balance limits will impact them.   
  • Minimum balance requirement – Many CMAs require that the account holder eclipses a minimum balance threshold to open an account and earn interest.   
  • FDIC Insurance – Confirm how much FDIC insurance the account provides. And if you have more than $250,000, verify whether that money is distributed to multiple partner locations. 
  • Customer Services – With no in-person services, CMA holders must ensure that the organization providing the CMA offers its members comprehensive—round-the-clock—online support.
  • Services – What are the additional services the CMA provides? Does it include investment services? Access to a strategic fund initiative? 
  • Mission – Does the CMA provider have a shared mission that goes beyond finance and investment? The ability to grow your wealth and contribute to a philanthropic cause (in tandem) might further your commitment to the CMA. 

An Eco-Friendly Cash Management Account 

Currently, the world’s top banks provide more than three-quarters of a $1 trillion in financing to the fossil fuel industry each year.  

That begs the question, do you really want to support an institution that bankrolls coal, oil, and gas production? Wouldn’t you prefer to partner with a venture that helps grow your finances and restore the earth in the same process? 

That’s what Aspiration was created for—to let individuals put their money where their values are. We’re not a bank, we’re a sustainable bank alternative with a cash management account program, which guarantees that your eco friendly debit card purchases will ever be used to fund the oil or coal industries.  

Put simply, it’s an account that was built for the planet. But how does our CMA work? Features include but are not limited to: 

  • Sustainable spending – Zero dollars go to fossil fuel industries. There’s no dirty spending. Customers can spend, save, and invest with a clear conscience. Additionally, with each purchase you make, you can opt to plant a climate change fighting tree. 
  • A customer’s first ethos – Aspiration believes in putting the customer first. That means you only need to pay what you think is fair—even if that number is zero. Instead of working for the wealthiest people, we want to bring the top financial solutions to as many individuals as possible.  
  • Amazing rewards – Aspiration members that spend $1,000 a month can earn up to 3% APY (for Aspiration Basic) and 5% APY (for Aspiration Plus). Also, earn cashback on Conscience Coalition purchases, up to 3%–5% (Aspiration Basic) and 10% (Aspiration Plus).
  • Security you can trust – We provide advanced security features to ensure your money stays safe. In addition to $2.5 million in FDIC insurance per depositor, we protect our members with multi-factor authentication, 256-bit encryption, and ID theft/protection alerts. 
  • ATM Access – The Spend & Save CMA provides members with access to more than 55,000 free in-network ATMs. 
  • Neutralize your car’s carbon – Aspiration Plus members will have their carbon footprint offset for every gallon of gas they purchase. So far, we’ve helped offset 1,127, 444, 112 miles. That’s 36,548 metric tons of CO2
  • Investing – Worried about where banks invest their money? We partner with the Redwood Fund—an index that invests in companies that champion sustainable environmental, workplace, and governance methodologies. 

Your Spend and Save Aspiration CMA

Cash management accounts are a bold take on a bygone financial system. They empower customers to secure, spend, save, invest and grow their savings in a sustainable fashion. 

With a program like Aspiration’s Spend and Save CMA, account holders can align their money with causes they believe in—making the world a better place, one purchase at a time.  

Are you ready to join us in our mission to plant 125 million trees by 2030? Leave your bank and come save the planet. 


FDIC. National Rates and Rate Caps. 

Reuters. World’s top banks pumped $742 bln into fossil fuels in 2021 – report. 

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