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We recommend Betterment as the top choice for a cash management account with a robo-advisor.
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Robo-advisors handle investments and offer cash management accounts. These accounts earn interest on your not-invested money and offer typical bank services like ATM withdrawals and bill payments. Because robo-advisors use technology to cut costs, their cash management accounts usually have better interest rates and lower fees than major banks.
Cash management accounts vary in quality. The best ones should give you a high-interest rate, automatically move your money around, charge low or zero monthly fees, and offer easy banking and investing services. We’ve picked out the top robo-advisor cash management accounts to help you find the right one.
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
Account Minimum: Start investing with as little as $0 or a minimum of $10.
Fees: For investing plans with at least $20,000 or monthly deposits of $250, there’s an annual fee of 0.25%. If not, it’s $4 per month. Accounts over $100,000 get extra services for a 0.15% annual fee plus a 1% fee on cryptocurrency. This fee doesn’t apply to cash accounts. Accounts with $2 million or more get a 0.10% fee discount. Crypto accounts have a 1% monthly fee plus trading costs.
Why We Chose It
Betterment offers the top robo-advisor cash management account with a great interest rate, free checking, no monthly fees, and free ATM withdrawals worldwide.
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 amazing interest rate of 5.50% is available for new customers.
- Enjoy free ATM withdrawals worldwide.
- No need for a minimum balance or monthly fees.
Cons
- The checking account doesn’t earn any interest.
- Your robo-advisor account doesn’t automatically move uninvested cash.
Overview
Advance is a famous robo-advisor known for its great cash management accounts. It shows two options: a Cash Reserve account and a checking account. The Cash Reserve account has a high interest rate of 4.75%, and new clients get an even more affordable rate of 5.50% for three months. There are no fees or lower credit requirements; you only need $10 to start. With a checking account, you can withdraw cash on hand for free from any ATM and earn cash with a debit card.
Since Betterment is a tech company, it doesn’t have physical branches. To earn interest on uninvested cash, you need to move it manually to the Cash Reserve account.
Cash Reserve is available through Betterment LLC, not a bank. Transfers to program banks are done through your brokerage account at Betterment Securities. Betterment LLC doesn’t charge fees on your Cash Reserve 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: Most accounts have a 0.25% fee, and there are no fees for trading, withdrawals, minimums, or transfers.
Why We Chose It
Betterment provides the top robo-advisor cash management account with a great interest rate, free checking, no monthly fees, and free ATM withdrawals worldwide.
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
- Get a great 5.00% interest rate on all balances.
- Get early access to your paychecks through direct deposit.
- Withdraw cash for free from 19,000 ATMs.
Cons
- There is a $2.50 fee for using out-of-network ATMs.
- Few customer service choices are available.
- Rules for check-writing balances and deposits.
Overview
Wealthfront is a top robo-advisor offering an impressive cash management account with a 5.00% APY on all balances (5.50% when referring a friend). There are no monthly fees or minimum balance requirements.
Wealthfront offers a debit card for free withdrawals from 19,000 network ATMs, including Safeway, CVS, and Walgreens. Direct depositing your paycheck into Wealthfront can give you access to your money up to two days earlier than traditional banks.
However, Wealthfront has some drawbacks. It offers minimal phone customer service and prefers you to seek help through its website, app, or email. There’s also a $2.50 fee for out-of-network ATM withdrawals and any fees charged by the ATM owner.
Although you can write checks with Wealthfront, you must maintain an average balance of at least $2,500 across all your Wealthfront accounts and directly deposit at least $250 to be eligible.
BEST FOR TRADITIONAL BANKING SERVICES
Merrill Guided Investing
Account Minimum: $1,000, or $20,000 with an advisor
Fee: Each year, 0.45% of your managed assets is charged, split into monthly payments. With an advisor, the fee is 0.85%. Customers in Bank of America Preferred Rewards can get discounts.
Why We Chose It
Merrill Guided Investing provides a cash management account with standard banking features like writing checks, using ATMs, and paying bills 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
- Connects check writing and bill payment to your investment account.
- Use ATMs with Bank of America.
- Get $200 back each year for using out-of-network ATMs.
Cons
- Extremely low interest rate.
- $125 yearly charge.
- You need a big $250,000 balance in Merrill to skip the yearly fee.
Overview
For a more traditional banking experience with your cash management account, consider Merrill Guided Investing. You can write checks, pay bills, and withdraw cash from your investment account balance. Merrill’s cash management account works with Bank of America ATMs, where you can deposit checks and cash.
With Merrill, you’ll get up to $200 yearly for using out-of-network ATMs. You can phone Merrill experts or visit bank branches if you require assistance.
However, Merrill Guided Investing has some limitations. It offers a low-interest rate of 0.01% on balances up to $1 million and charges a $125 annual fee. You can avoid this fee by maintaining at least $250,000 across all your Merrill accounts. Additionally, the account only provides $250,000 of FDIC insurance, less than many robo-advisor cash management accounts offer.
BEST FOR EARNING A HIGHLY INTERESTED RATE
Titan Invest
Account Minimum: $500
Fees: Automated portfolios have a 0% fee, while active portfolios have fees ranging from 0.7% to 0.9%.
Why We Chose It
Titan Invest’s Smart Cash account continuously analyzes Treasury funds to find the best return on uninvested cash.
Pros & Cons
Pros
- Achieved an impressive 5.33% APY.
- Actively searches for Treasury funds to get you a higher return.
- Think about your taxes to improve your returns.
Cons
- Withdrawals typically take three to four business days to process.
- Only accepts electronic deposits and withdrawals.
- No access to ATMs or checking account services.
Overview
Consider the Titan Invest Smart Cash account to earn the best return on your uninvested cash. This cash management account offers up to 5.33% APY, the highest rate among all the robo-advisors reviewed. Titan Invest uses a unique system to maximize your returns by checking different money markets and Treasury funds daily.
Titan Smart Cash also considers your tax situation to find Treasury funds that could give you tax breaks on your interest earnings. There’s no monthly fee for Titan Invest’s cash management account, and the quoted return rate already considers any potential expenses from the Treasury funds.
However, managing your money with Titan Invest does have some challenges. Withdrawing money takes three to four business days because Titan Invest needs to sell off the Treasury funds first. Titan Invest’s cash management account doesn’t have a debit card, ATM access, or other banking services. To withdraw money, you’ll first need to transfer it from Titan Invest to another bank account.
The Bottom Line
Robo-advisor cash management accounts offer high-interest rates and quality banking services. Choosing the right one depends on your goals. Betterment has the top cash management account for robo-advisors because of its high-interest rate, no monthly fees, and free worldwide ATM access. Wealthfront is also great and shares the same advantages as Betterment, but its ATM access isn’t as good because it charges fees for out-of-network withdrawals. However, Wealthfront excels in direct deposit, giving you access to your money two days earlier than traditional banks.
If you’re looking for traditional banking services with your robo-advisor, like check writing and in-person assistance, consider Merrill Guided Investing. Finally, while Titan Invest offers the best return with its daily scanning system for the best Treasury fund rates, withdrawals are slower and offer fewer 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 | Access to ATMs, a debit card for purchases, and the ability to write checks. | No | Yes, $2 million |
| Wealthfront Best for Paycheck Direct Deposit | None | 5.00% APY (5.50% when you refer a friend) | Access to ATMs for withdrawals, a debit card for purchases, getting paychecks early, and the ability to write checks. | Yes | Yes, $8 million ($16 million for joint accounts) |
| Titan InvestBest for Earning a High-Interest Rate | You can avoid the $125 annual fee by maintaining Merrill balances of over $250,000. | 0.01% | Ability to write checks, withdraw and deposit cash at ATMs, receive in-person assistance, and pay bills. | Yes | Yes, $250,000 |
| Titan Invest Best for Earning a High-Interest Rate | None | 5.33% | None | Yes | Yes, $5 million |
Guide to Choosing the Best Cash Management Account
When comparing cash management accounts, consider these factors to find the best option.
- Annual percentage rate (APY): The APY is the interest you earn on your cash management account balance. It can vary widely, from high returns to very low ones. Aim for the highest possible APY.
- FDIC insurance: If the robo-advisor leaves business, consider switching your cash management account. Some cash management accounts provide much more than traditional banks’ standard $250,000 coverage. This is important to remember if you have a large cash balance.
- Fees: Robo-advisors may have monthly fees for cash management accounts and additional charges for services like ATM withdrawals and check cashing. Try to minimize fees, especially with the abundance of affordable options.
- Account services: Consider what banking services you need from your cash management account. Some accounts only earn interest and allow electronic transfers between accounts. Others provide complete banking services, such as ATM access, check writing, bill pay, and direct deposit for paychecks.
- Investment services: Consider how well a company’s investment services and robo-advisor suit your needs. While you could have accounts with different companies, it’s easier to manage when they’re all in one place. Also, check if a company offers automatic sweeps, which automatically move your uninvested cash into the cash management account to earn interest.
- Customer service: Consider what type of customer service you require for your cash management account. Some robo-advisors offer basic support through email and a mobile app, while others provide phone and in-person assistance.
What Are Alternatives to Cash Management Accounts?
- High-yield savings accounts: Banks and credit unions offer high-yield savings accounts. The top ones pay interest rates similar to cash management accounts. A high-yield savings account from a bank is likely to offer more banking services and support than a cash management account. However, savings accounts may restrict the number of monthly withdrawals you can make.
- Money market accounts: Money market accounts are similar to bank deposit accounts and come with check-writing capabilities and an ATM card. The top money market accounts require higher balances than regular checking accounts but offer higher interest rates in return. A money market account might be better if you have a larger balance and need more checking account services. However, cash management accounts usually have lower fees, especially if you have a smaller balance.
- Certificates of deposit (CDs): A CD (Certificate of Deposit) locks your money for a specific time, offering a higher interest rate than regular bank accounts. If you withdraw early, you’ll lose some interest as a penalty. The top CD accounts Are a good choice if you can wait for your money and want a high-interest rate. However, a cash management account is better if you need withdrawal flexibility.
FAQs
1. What Is a Cash Management Account?
Ans: A cash management account offers typical banking services from companies that aren’t banks, like investment firms, brokers, or robo-advisors. These accounts earn interest on money that isn’t invested. They may also include features like ATM withdrawals, bill payments, check writing, and direct deposit. Non-bank companies advertise these accounts to bring in new customers.
2. Are Cash Management Accounts Taxable?
Ans: The interest you earn from a cash management account is taxable. Every year, the company that manages your account will send you a statement showing how much interest you earned, and you must report it as income to the government. The same tax rules that apply to earning interest from a bank account also apply to cash management accounts.
3. Can You Withdraw Money From a Cash Management Account?
Ans: Yes, you can take out money from a cash management account, but the steps vary depending on the robo-advisor you have. Some only allow electronic withdrawals, so transfer the funds to another bank account to get cash or pay bills. Other cash management accounts come with debit cards that you can use to buy things or withdraw money from ATMs.
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.
