Fidelity Cash Management Account Review (2024)

Reviews / Investing

6 min Read

Fidelity Cash Management Account Review (1) Written by Joel Anderson

Fidelity Cash Management Account Review (2) Edited by Emily Gadd

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

Fidelity Cash Management Account Review (3)

20 Years
Helping You Live Richer

Fidelity Cash Management Account Review (5)

Trusted by
Millions of Readers

Fidelity Cash Management Account Review (6)

Fidelity Bank

4.8

SCORE

GOBankingRates Best Banks 2023 scores and rankings are objectively determined by our research/editorial team. Our scoring formula weighs several factors that differ from category to category depending on what consumers want from varying products and banks.

  • APY

    4.0

  • Features and functionality

    5.0

  • Access to funds

    5.0

  • Fees

    5.0

How did we calculate this?

The Fidelity Cash Management Account can be a good, convenient option for Fidelity customers who need a parking place for their idle cash. While technically a brokerage account, the Fidelity Cash Management Account feels more like a checking account to most customers. As it is part of the Fidelity ecosystem, it makes it easy for customers to transfer money among accounts, including their primary brokerage account. But while the Fidelity Cash Management Account pays a good yield and provides a multitude of other beneficial services, it’s not perfect, and some customers may find it lacking in certain ways. Here’s a look at the pros and cons of the account, along with a review of who it’s best for and who may prefer other alternatives.

Although the Fidelity Cash Management Account has a few drawbacks, it’s a solid account with plenty to offer. Here’s a look at both sides of the coin:

Overall, the pros of the Fidelity Cash Management Account will outweigh the cons. This is particularly true when comparing the Fidelity CMA with a traditional checking account, which often pays no interest at all and may charge high fees for ATM withdrawals. However, those looking for the absolute maximum yield on their idle cash – or those who need a bank with a branch on every corner – may find better options elsewhere.

What Are the Features and Benefits?

The Fidelity Cash Management Account allows you to earn a relatively high APY on your idle cash while you are waiting to invest it in your brokerage account. But it also essentially acts like a full-featured checking account, with Bill Pay, a mobile app, a debit/ATM card, and integration with various payment apps. The account also comes with free standard checks if you prefer.

One thing to note is that there are two distinct options for where you can place your idle cash in the Fidelity Cash Management Account.

Deposit Sweep Program

The most-liquid, FDIC-insured offering is the aptly named FDIC-Insured Deposit Sweep Program. With this option, Fidelity deposits your cash at one or more program banks, each of which is FDIC insured, and you earn a blended yield that currently offers a 2.72% APY.

Government Money Market Fund

The second option is the Fidelity® Government Money Market Fund. This choice is an in-house money market mutual fund, meaning it doesn’t carry traditional FDIC insurance but is covered by the same SIPC insurance that applies to all brokerage accounts. The yield on this fund is a much higher 4.96%. However, you’ll have to transfer money out of the money market option before you can use it to access cash.

Make your money work for you

Get the latest news on investing, money, and more with our free newsletter.

By subscribing, you agree to our Terms of Use and Privacy Policy. Unsubscribe at any time.

Fidelity Cash Management Account Review (7)
Fidelity Cash Management Account Review (8)

Thanks!

You're now subscribed to our newsletter. Check your inbox for more details.

Fidelity Cash Management Account Review (9)

The main highlights of the Fidelity Cash Management Account are that it has no fees or minimums and that it reimburses an unlimited number of global ATM withdrawals. While you can find competitor banks that have no fees or minimums, it’s very hard to find institutions that also provide unlimited ATM fee rebates. In fact, while advertising “no-fee ATM withdrawals,” most banks only provide this service for their contracted network of ATM terminals. In other words, most charge fees for ATM withdrawals out of their own networks, and this may be in addition to terminal fees charged by the ATMs themselves. But the Fidelity CMA reimburses any and all of those fees, making it particularly helpful for global travelers or those who want the convenience of using any ATM they choose.

Additional Fidelity Products and Services

When it comes to providing financial services, it’s tough to top Fidelity. While originally known primarily for its line of outperforming, no-load mutual funds, the firm now offers a full line of comprehensive financial products and services, including the following:

  • 529 college savings plan
  • Alternative investments
  • Annuities
  • Insurance
  • Exchange-traded funds (ETFs)
  • Mutual funds
  • Domestic and international equities
  • Fixed income and CDs
  • New issues
  • Syndicate offerings
  • Individual and small business retirement offerings
  • Health savings account (HSA)
  • Cash management tools
  • Lending
  • Wealth management
  • Personal trust services
  • Corporate executive services
  • Fidelity Charitable Giving Account
  • Fidelity Go robo-advisory services

In short, Fidelity is likely to have a solution for your financial services needs, typically for a low cost as well.

Alternatives to Fidelity

Two of Fidelity’s biggest competitors in the cash management world include Betterment and Wealthfront, who were among the original innovators in the space. Here’s a quick overview of the differences between the accounts.

Betterment

Betterment, which was one of the original “robo-advisors,” has expanded its line of products and services over the years and now offers a wealth management account. Known as the Cash Reserve account, Betterment’s offering pays a much higher yield than the Fidelity CMA, currently offering a 5% APY. This account also has no fees or minimums, $2 million in FDIC insurance and no limit on withdrawals.

Wealthfront

Wealthfront was another pioneer in the field of robo-advisory services, and like Betterment, it too offers a cash management account that pays a 5% APY. This cash management account, simply dubbed the Cash Account, has no account fees or minimum balance requirements, offers unlimited transfers and same-day withdrawals, and carries up to $8 million in FDIC insurance.

The Bottom Line

The Fidelity Cash Management Account is an excellent option for Fidelity customers to maintain their cash balances while waiting to invest additional money into their brokerage accounts. However, even as a standalone account, it offers some amazing features and benefits that make it a standout in the space. From its lack of fees to its payment versatility to its relatively high APY options and unlimited ATM fee rebates, the Fidelity CMA offers far more than the average checking account and is worthy of consideration by nearly everyone.

FAQ

  • What is the current interest rate on a Fidelity Cash Management Account?
    • The standard, FDIC-insured account option in the Fidelity CMA currently pays a 2.72% APY. This can be boosted to a 4.96% APY if you choose the Fidelity® Government Money Market Fund.
  • Can I withdraw money from a Fidelity Cash Management Account?
    • Yes, you can withdraw money from the Fidelity Cash Management Account at any time, just like a regular checking account. The debit/ATM card that comes with the account allows access to any ATM terminal in the world and reimburses an unlimited number of ATM fees that you may be charged.

John Csiszar contributed to the reporting of this article.

The Fidelity Cash Management Account was reviewed based on material provided on Fidelity’s own website. Competitor information was also drawn from the sites of the financial institutions themselves. All information was accurate as of July 22, 2024.

Is this your bank?

Thank You For Signing Up!

Get ready to receive top financial tips from the experts at GOBankingRates.

Take Advantage of our Best Offer(s)

Fidelity Cash Management Account Review (2024)

FAQs

What is the point of a Fidelity cash management account? ›

The Fidelity® Cash Management Account is intended to complement, not replace, your existing brokerage account. It lets you separate your spending activity from your investment activity.

What is the interest rate on a Fidelity cash management account? ›

Fidelity Cash Management Account
FDIC-Insured Deposit Sweep Balances3Interest rateAPY
$0.00 - $99,999.992.69%2.72%
$100,000.00 - AND ABOVE2.69%2.72%

Can you withdraw from Fidelity cash management account? ›

To initiate an online cash withdrawal, simply log in to your Fidelity account and go to the 'Transfer' tab. From there, select 'Withdraw Money' and choose the amount and account for the funds to be deposited into. Confirm the transaction, and you're all set!

Is cash management account safe? ›

FDIC protection: For consumers with large balances, cash management accounts make it easy to keep money safe by offering FDIC insurance on balances of up to $1 million or more, after the funds arrive at a program bank.

Can you deposit cash into a Fidelity cash management account? ›

Depositing cash into a Fidelity account provides a secure and convenient way to manage your financial assets, ensuring financial stability and paving the path towards financial success.

Is it safe to keep cash in Fidelity account? ›

The Securities Investor Protection Corporation (SIPC) is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt and assets are missing. The SIPC will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account.

Can I buy stocks in my Fidelity cash management account? ›

FBS accounts allow you to invest in mutual funds, exchange-traded funds (“ETFs”), stocks, bonds, college savings plans and insurance products, among others.

What is the daily limit for Fidelity cash management? ›

The maximum amount per day is $100,000 for withdrawals, and $250,000 for deposits. If you need to deposit more than $250,000 per day, or withdraw more than $100,000 per day, you can call Customer Service at 800 544-6666 to hear your options for the daily limit for electronic funds transfer (EFT).

What is the difference between a brokerage and cash management account? ›

Are brokerage accounts and cash management accounts the same? No. Brokerage accounts are used to buy and sell securities. Cash management accounts act more like traditional bank savings and checking accounts, but are provided by brokerage and other non-bank financial institutions.

Is Fidelity cash management FDIC insured? ›

Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Does Fidelity cash management account have minimum balance? ›

Manage your cash and investments together by using any of the following features, at no cost, with no minimum balances: ATM/debit card—ATM withdrawal fees reimbursed. Deposits eligible for FDIC insurance. Cash Manager (alerts & self-funded overdraft protection)

Can I do direct deposit with Fidelity cash management account? ›

Direct and automatic deposits

You can set up two types of deposits for your Fidelity accounts: direct deposit of a paycheck or government check to a Fidelity account, or automatic deposits from a bank account or Fidelity Cash management account to specific investments.

What are the disadvantages of cash management accounts? ›

Drawbacks of cash management accounts

Minimum balance requirements: Some cash management accounts may have high minimum balance requirements or charge maintenance fees. No branches: You won't have access to a branch network with in-person support.

What is the risk of a cash management fund? ›

Key takeaways. The cash management funds mainly invest in short-term money market instruments and are a wealth management product with relatively lower risk. The features of the cash management funds mainly include relatively lower risk, higher liquidity, lower threshold, etc.

Is a cash management account a high-yield savings account? ›

With cash management accounts, you can earn an APY as high as 5%, significantly higher than the average APY for savings accounts. But the stock market may be a better choice for those saving for long-term goals like retirement. Over the long term, the stock market has historically delivered annual returns of about 10%.

What is the purpose of a cash management account? ›

Simplified account ownership. A CMA can streamline your finances by allowing you to make transactions, earn high-yield interest and sometimes use a credit line that's attached to your investment securities all without having to transfer funds between different accounts. Above-average interest rates.

What is the difference between a brokerage account and a cash management account? ›

While a brokerage account is for trading securities, and comes with the risks associated with investing in securities, a cash management account (CMA) is similar to a traditional checking or savings account. There's almost no risk of losing money, and your deposits can earn interest.

Top Articles
Latest Posts
Recommended Articles
Article information

Author: Annamae Dooley

Last Updated:

Views: 5555

Rating: 4.4 / 5 (45 voted)

Reviews: 84% of readers found this page helpful

Author information

Name: Annamae Dooley

Birthday: 2001-07-26

Address: 9687 Tambra Meadow, Bradleyhaven, TN 53219

Phone: +9316045904039

Job: Future Coordinator

Hobby: Archery, Couponing, Poi, Kite flying, Knitting, Rappelling, Baseball

Introduction: My name is Annamae Dooley, I am a witty, quaint, lovely, clever, rich, sparkling, powerful person who loves writing and wants to share my knowledge and understanding with you.