Cash Management Account
What Is a Cash Management Account?
A cash management account (CMA) is a financial account offered by brokerage firms or financial institutions that combines features of checking accounts, savings accounts, and investment accounts. These accounts allow users to manage cash balances while maintaining access to investment services.
Cash management accounts often include tools for payments, transfers, and interest earnings.
Why It Matters
Cash management accounts help individuals manage everyday finances while keeping funds connected to investment portfolios. They provide flexibility by allowing users to store cash, pay bills, and access investment opportunities within a single platform.
These accounts are particularly useful for investors who want integrated financial management.
How Cash Management Accounts Work
Cash management accounts may include features such as:
- debit cards for spending
- check-writing capabilities
- automated cash sweeps into interest-bearing accounts
- integration with brokerage accounts
- online and mobile banking access
Funds held in a CMA may be automatically transferred into money market funds or bank accounts to earn interest.
Cash Management Account vs Checking Account
- A cash management account integrates banking and investment services.
- A checking account is typically designed for everyday transactions only.
FAQs About Cash Management Accounts
Who offers cash management accounts?
Brokerage firms and financial institutions commonly offer these accounts.
Do cash management accounts earn interest?
Many accounts allow funds to earn interest through sweep programs.
Can customers pay bills using a CMA?
Many accounts include bill payment and debit card features.
Related Terms
