Cash management accounts or CMAs are typically offered by nonbank financial providers as an alternative to traditional checking and savings accounts. It combines the services and features of those accounts under one product type. Cash management accounts were made popular by investment firms and brokerages who offered them to investors as the primary account portal to buy and sell investments.
The differences between a cash management account and a high yield checking account can get a bit blurry. But, cash management accounts do not have the limitations of traditional checking and savings accounts. They combine the liquidity of checking accounts with the high-interest rates of savings accounts. Cash management accounts tend to be online only with zero of minimal fees, offer higher yields, and the ability for unlimited transfers between accounts unlike traditional savings or money market accounts.
Financial services companies that offer cash management accounts are often not banks themselves, but partner with banks. The bank partnerships allow these companies offering cash management accounts to sweep your deposits into a participating bank. Doing so extends FDIC insurance on the deposits held in the cash management account.