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Betterment is our pick for the best robo-advisor cash management account.
According to our research, Betterment is the best overall robo-advisor for cash management due to its high-interest rate, available no-fee checking, free withdrawals, and other key features. We researched 21 robo-advisor platforms and evaluated them on 59 criteria, including cash sweep functionality, interest earned, banking features, and more. We will cover the top robo-advisors for cash management so you can decide which platform is best for you.
Best Robo-Advisor Cash Management Accounts of 2024
- Best Overall: Betterment
- Best for Paycheck Direct Deposit: Wealthfront
- Best for Traditional Banking Services: Merrill Guided Investing
- Best for Earning a High-Interest Rate: Titan Invest
BEST OVERALL
Betterment
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Account Minimum: $0, $10 minimum to start investing
Fees: 0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 monthly in recurring account deposits. Otherwise, the fee is $4/month. An additional 0.15% (annual) fee on accounts with at least $100,000 in assets provides account holders unlimited access to certified financial planners and a 1% crypto fee. This additional fee applies to assets in the investment and cryptocurrency accounts, not cash accounts. For accounts with at least $2 million, there is a fee discount of 0.10%. Crypto accounts are charged a monthly fee of 1% plus trading expenses.
Why We Chose It
With a high – interest rate, available no-fee checking, no monthly fees, and free withdrawals from any ATM in the world, Betterment offers the best overall robo-advisor cash management account.
In addition to being the best overall robo-advisor for cash management, Betterment is Investopedia’s top choice for beginners, tax-loss harvesting, and crypto portfolio selection.
Pros & Cons
Pros
- An incredible interest rate of 5.50% for new customers
- Free withdrawals from any ATM in the world
- No minimum balance requirements or monthly fees
Cons
- No interest in the checking account
- No automatic sweep for uninvested cash in your robo-advisor account
Overview
Betterment is one of the most popular robo-advisors in the world and delivers a stellar cash management account. Betterment has two cash management accounts. Its Cash Reserve account pays a high – interest rate of 4.75%, with a 5.50% introductory annual percentage rate (APY) for new customers lasting the first three months. There’s no minimum balance requirement or monthly fee. You only need to deposit $10 to get started. Betterment also offers a checking account with free withdrawals from any ATM and a debit card that earns cash back.
As a tech-focused company, Betterment does not have physical branches. Its cash management accounts take some coordination, too. To earn interest, you must manually move your uninvested cash into the Cash Reserve account.
Cash Reserve is only available to clients of Betterment LLC, which is not a bank. Cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities. For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.
Checking accounts and the Betterment Visa Debit Card provided and issued by NBKC bank, Member FDIC. Checking is made available through Betterment Financial LLC. Neither Betterment Financial LLC nor any of its affiliates is a bank. Betterment Financial LLC reimburses ATM fees and the Visa® 1% foreign transaction fee worldwide, everywhere Visa is accepted.
BEST FOR PAYCHECK DIRECT DEPOSIT
Wealthfront
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Account Minimum: $500
Fees: 0.25% for most accounts, no trading commission or fees for withdrawals, minimums, or transfers
Why We Chose It
With a high interest rate, available no-fee checking, no monthly fees, and free withdrawals from any ATM in the world, Betterment offers the best overall robo-advisor cash management account.
In addition to being the best overall robo-advisor for cash management, Betterment is Investopedia’s top choice for beginners, as well as tax-loss harvesting and crypto portfolio selection.
Pros & Cons
Pros
- An incredible interest rate of 5.50% for new customers
- Free withdrawals from any ATM in the world
- No minimum balance requirements or monthly fees
Cons
- No interest in the checking account
- No automatic sweep for uninvested cash in your robo-advisor account
Overview
Betterment is one of the most popular robo-advisors in the world and delivers a stellar cash management account. Betterment has two cash management accounts. Its Cash Reserve account pays a high – interest rate of 4.75%, with a 5.50% introductory annual percentage rate (APY) for new customers lasting the first three months. There’s no minimum balance requirement or monthly fee. You only need to deposit $10 to get started. Betterment. “Cash Reserve.”
Betterment also offers a checking account with free withdrawals from any ATM and a debit card that earns cash back.
As a tech-focused company, Betterment does not have physical branches. Its cash management accounts take some coordination, too. To earn interest, you must manually move your uninvested money into the Cash Reserve account.
Cash Reserves are only available to clients of Betterment LLC, which is not a bank. Cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities. For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.
Checking accounts and the Betterment Visa Debit Card provided and issued by NBKC bank, Member FDIC. Checking is made available through Betterment Financial LLC. Neither Betterment Financial LLC nor any of its affiliates is a bank. Betterment Financial LLC reimburses ATM fees and the Visa® 1% foreign transaction fee worldwide, everywhere Visa is accepted.
BEST FOR PAYCHECK DIRECT DEPOSIT
Wealthfront
Account Minimum: $500
Fees: 0.25% for most accounts, no trading commission or fees for withdrawals, minimums, or transfers
Why We Chose It
If you’re in a hurry to get paid, Wealthfront’s cash management account gives you your paycheck up to two days early while paying a terrific rate on your savings.
In addition to being the best robo-advisor for paycheck direct deposit, Wealthfront is Investopedia’s pick for best overall robo-advisor and our top choice for goal planning, portfolio construction, and portfolio management.
Pros & Cons
Pros
- Excellent interest rate of 5.00% on all balances
- Offers early access to paychecks with direct deposit
- Free withdrawals from 19,000 ATMs
Cons
- Charges $2.50 out-of-network ATM fees
- Limited customer service options
- Balance and deposit requirements for writing checks
Overview
Wealthfront is another leading robo-advisor with an excellent cash management account. It pays an impressive 5.00% APY on all balances (5.50% when you refer a friend). Wealthfront doesn’t charge a monthly fee for its cash management account or require a minimum account balance.
Wealthfront includes a debit card that offers free withdrawals from 19,000 network ATMs, including Target, CVS, and Walgreens. Directly depositing your paycheck into Wealthfront gives you your money up to two days earlier versus a traditional bank.
As a robo-advisor, Wealthfront does have some weaknesses compared to cash management accounts at more traditional brokers. Wealthfront has minimal phone customer service support, preferring that you get help through its website, mobile app, or email. It also charges a $2.50 fee for out-of-network ATM withdrawals on top of whatever the ATM owner charges. It’s not ideal and can get costly if you don’t pay attention to where you withdraw your money.
While Wealthfront does allow you to write checks, you must have held an average balance of at least $2,500 with all your Wealthfront accounts and directly deposited at least $250 to be eligible.
BEST FOR TRADITIONAL BANKING SERVICES
Merrill Guided Investing
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Account Minimum: $1,000, or $20,000 with an advisor
Fee: Annually, 0.45% of assets are under management, and 0.85% are assessed monthly with an advisor. Discounts are available for Bank of America Preferred Rewards participants.
Why We Chose It
Merrill Guided Investing offers a cash management account with the most typical banking services. This includes check-writing, ATM access, and bill pay directly from your investment balance.
In addition to being the best robo-advisor for traditional banking services, Merrill Guided Investing is Investopedia’s best robo-advisor for education.
Pros & Cons
Pros
- Links check writing and bill pay to your investment account.
- ATM access through Bank of America
- $200 annual reimbursement for out-of-network ATM withdrawals
Cons
- Very low-interest rate
- $125 annual fee
- Requires a large $250,000 balance at Merrill to avoid the annual fee
Overview
If you’d like a more traditional banking experience from your cash management account, consider Merrill Guided Investing. Its cash management account allows you to write checks, pay bills, and make ATM withdrawals directly from your investment account balance. Merrill’s cash management account works with Bank of America ATMs, allowing you to deposit checks and cash.
Merrill’s cash management account refunds up to $200 a year for out-of-network ATM withdrawals. If you need help, you can speak with Merrill experts by phone or even in person at bank branches.
Merrill Guided Investing does have the limitations of a traditional brick-and-mortar bank. It pays a small interest rate of 0.01% on balances up to $1 million. The account also charges a $125 annual fee. You may be able to get the fee waived, but it requires meeting certain conditions. Finally, the Merrill Lynch cash management account only provides $250,000 of FDIC insurance. While this is standard for regular banks, it is low compared to what many robo-advisor cash management accounts offer.
BEST FOR EARNING A HIGH-INTEREST RATE
Titan Invest
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Account Minimum: $500
Fees: 0% for automated portfolios, 0.7% to 0.9% for active portfolios
Why We Chose It
Titan Invest’s Smart Cash account actively scans Treasury funds to find you the highest return on your uninvested cash.
Pros & Cons
Pros
- Earns an amazing 5.29% APY
- Actively scans for Treasury funds to net you a better return.
- Consider your tax situation for better returns.
Cons
- Withdrawals take three to four business days.
- Only allows electronic deposits and withdrawals.
- No ATM access or checking account services
Overview
Consider the Titan Invest Smart Cash account if you’re trying to earn the best return possible on your uninvested cash. This cash management account pays up to 5.29% APY, the highest rate for existing account holders of all the robo-advisors in this review. Titan Invest uses a unique system to earn a higher return. It scans different money market funds and Treasury funds daily to find the best spot for your money.
Titan Smart Cash also considers your tax situation to find Treasury funds that could net you tax breaks on your interest earnings. Titan Invest does not charge a monthly fee for its cash management account. The rate it quotes for your return is already adjusted for any potential expenses from the Treasury funds.
Titan Invest’s system does have some challenges for managing your money. It takes three to four business days to get your money from a withdrawal, as Titan Invest must sell off the Treasury funds first. Titan Invest’s cash management account does not include a debit card, ATM access, or other banking services. To withdraw money, you’ll need to transfer it from Titan Invest to another bank account first.
The Bottom Line
Robo-advisor cash management accounts can earn high interest rates and provide quality banking services. The right fit depends on your overall goals. Betterment has the best overall cash management account for robo-advisors, thanks to its high interest rate, no monthly fees, and free ATM access worldwide. Wealthfront is also excellent with the same advantages as Betterment, although its ATM access is not quite as good as it charges fees on out-of-network withdrawals. Wealthfront does a better job with direct deposit, giving you your money two days earlier than a regular bank.
If you want regular banking services with your robo-advisor, like check writing, in-person service, and ATM access to deposit cash, consider Merrill Guided Investing. Finally, while Titan Invest offers the best return thanks to its unique daily scanning system for the best Treasury fund rates, this comes with slower withdrawals and few banking services.
Compare the Best Robo-Advisor Cash Management Accounts
| Company | Monthly Fee | Interest Earned | Available Banking Services | Automatic Sweeps | FDIC Insurance |
|---|---|---|---|---|---|
| Betterment Best Overall | None | 4.75% APY, 5.50% as a sign-up bonus | ATM withdrawals, debit card for purchases, check writing | No | Yes, $2 million |
| Wealthfront Best for Paycheck Direct Deposit | 0.25% | 5.00% APY (5.50% when you refer a friend) | ATM withdrawals, debit card for purchases, early access to paychecks, check writing | Yes | Yes, $8 million ($16 million for joint accounts) |
| Merrill Guided Investing Best for Traditional Banking Services | Best for Earning a High-Interest Rate | 0.01% | Check writing, ATM withdrawals and cash deposits, in-person service, and bill pay. | Yes | Yes, $250,000 |
| Titan Invest Best for Earning a High-Interest Rate | None | 5.29% | None | Yes | Yes, $5 million |
Guide to Choosing the Best Cash Management Account
As you compare different cash management accounts, these factors can help you determine the right fit.
- Annual percentage rate (APY): The APY is the interest earned on your cash management account balance. It can range from generous returns to practically nothing, so your APY should be as high as possible.
- FDIC insurance: FDIC insurance replaces your cash management account balance if the robo-advisor goes bankrupt. Some cash management accounts offer far more coverage than the standard $250,000 traditional banks provide. Keep this in mind if you have an especially large cash balance.
- Fees: Robo-advisors can charge monthly fees for cash management accounts, ATM withdrawals, check cashing, and other services. Aim to keep fees low, especially since many low-cost options are available.
- Account services: What banking services do you want from your cash management account? Some only earn interest and allow electronic withdrawals/deposits between accounts. Others offer a full range of banking services, including ATM access, check writing, bill pay, and direct deposit for paychecks.
- Investment services: You should also consider how a company’s investment services and robo-advisor match your needs. While you could open your robo-advisor and cash management accounts at different companies, having them in the same place is more convenient. You should also see if a company offers automatic sweeps, which automatically move your uninvested cash into the cash management account to earn interest.
- Customer service: What do you need for customer service with your cash management account? Many robo-advisors offer bare-bones support through email and a mobile app. Others provide phone and in-person support.
What Are Alternatives to Cash Management Accounts?
- High-yield savings accounts: High-yield savings accounts come from banks and credit unions. The best high-yield savings accounts pay interest rates as high as cash management accounts. Since they come from an actual bank, a high-yield savings account would likely provide more banking services and support. However, savings accounts can limit how often you can make certain monthly withdrawals.
- Certificates of deposit (CDs): A CD locks up your money for months or years. In exchange, it pays a higher interest rate than other bank deposit accounts. But if you try to withdraw early, you forfeit interest as a penalty. The best CD accounts could be an option if you don’t need immediate access to your cash and want the highest possible interest rate. A cash management account is better for flexible withdrawals.
FAQs
1. What Is a Cash Management Account?
Ans: A cash management account provides traditional banking services from a non-bank organization, like an investment firm, a broker, or a robo-advisor. Cash management accounts earn interest on uninvested cash. They may also provide ATM withdrawals, bill pay, check writing, and direct deposit. Non-bank organizations promote these accounts to attract new customers.
2. Are Cash Management Accounts Taxable?
Ans: Yes, interest earnings from a cash management account are taxable. Each year, the company managing your cash management account will send you a statement showing your interest earnings, which you must report as income to the government. The same tax rules apply to earning interest from a bank account.
3. Can You Withdraw Money From a Cash Management Account?
Ans: You can withdraw money from a cash management account, though the process depends on which robo-advisor you use. Some limit you to electronic withdrawals. You must transfer the funds to another bank account to make cash withdrawals or pay bills. Other cash management accounts include debit cards, which you can use to make purchases or withdraw cash using an ATM.
How We Picked the Best Robo-Advisors for Cash Management
Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. We used our 2023 consumer survey to guide the research and weightings for our 2024 robo-advisor awards. To collect the data, we sent a digital survey with 64 questions to each of the 21 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Jan. 8 to Feb. 9, 2024.
We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:
- Account Services – 10.00%
- Account Setup – 5.00%
- Customer Service – 5.00%
- Fees – 15.00%
- Goal Planning – 21.00%
- Portfolio Contents – 17.00%
- Portfolio Management – 17.00%
- Security & Education – 5.00%
- User Experience – 5.00%
Additionally, during our 2023 research, many of the companies we reviewed granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.
Investopedia has provided you with an unbiased and thorough review of the top robo-advisors through this all-encompassing data collection and review process.
Read more about how we research and review robo-advisors.
Separately, our research team surveyed 205 U.S. adults aged 18 to 72 who are current clients of one of 18 robo-advisors. While the information collected did not influence the development of our rating model, it was instrumental in gathering the valuable insights published in Investopedia’s 2023 Robo-Advisor Consumer Survey.
Participants in our 2023 Robo-Advisor Survey opted for an online, self-administered questionnaire from a market research vendor. Data collection occurred between Aug. 30 and Sept. 15, 2023, with 11 video interviews conducted with volunteer respondents from Sept. 7 to Sept. 17, 2023. Multiple quality checks, including screeners, attention gauges, comprehension evaluations, and logic metrics, were used to ensure only the highest quality responses were included.
The above material and content should not be considered a recommendation. Investing in digital assets is highly speculative and volatile and only suitable for investors who can bear the risk of potential loss and experience sharp drawdowns. Digital assets are not legal tender or backed by the U.S. government. They are not subject to FDIC insurance or SIPC protections.
Dotdash Meredith receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client who applies for a Wealthfront Automated Investing Account through our links. This incentive results in a material conflict of interest. Dotdash Meredith is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.
