Fidelity Cash Management Account Review: Seamless Money Management

It's like a checking account, but better.

By Joel Anderson April 23, 2020 Savings Accounts 101

These days, you can do more than ever without setting foot inside a brick-and-mortar bank: You can deposit checks through an app, get cash from an ATM, and transfer money with a few clicks. A Fidelity Cash Management Account takes those perks a step further by freeing you from the fees you often see with traditional checking accounts. For anyone who prefers online banking, a Fidelity Cash Management Account is worth a look.

Read on for more information about the Fidelity Cash Management Account.

Fidelity Cash Management Account Review
What Do I Need To Open a Fidelity Account?

Fidelity Cash Management Account Review

A Fidelity Cash Management Account is a brokerage account that has many of the features of a Fidelity checking account. It makes it easy to buy the things you need, pay your bills and transfer money between your Fidelity accounts. You can use any ATM in the United States, and your fees will be reimbursed. You can buy things using your Fidelity debit card. You can easily scan and deposit checks using Fidelity’s mobile app. You can even write checks from your Cash Management Account.

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In the event you already have a Fidelity brokerage account, you’ll be able to see all your transactions in one place. Alternatively, you can set up a new Fidelity brokerage account and easily invest your extra funds. You can also pay bills directly from your Fidelity Cash Management Account.

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FDIC Protection

Fidelity’s Cash Management Account comes with FDIC protection. The FDIC protects money that’s deposited in bank accounts, providing up to $250,000 of insurance per account. For example, if you have $1,000 deposited, the FDIC insures that $1,000. For an account with $251,000 deposited, it will insure $250,000 but not the remaining $1,000.

Although the Cash Management Account isn’t a bank account, Fidelity uses a process called a deposit sweep to ensure that you have FDIC protection for your Cash Management Account deposits totaling more than $250,000. A deposit sweep splits your funds into multiple program bank accounts, allowing you to have up to $1,250,000 in cash protected by FDIC insurance. Fidelity automatically moves your money, and you can access information on which banks are holding your funds when you log into your Cash Management Account.

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Although the deposit sweep process might sound complicated, Fidelity does all the work. You can easily view your account balance any time and enjoy the extra FDIC protection if you keep high amounts of cash available.

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What Is the Interest Rate on a Fidelity Cash Management Account?

Fidelity Cash Management Accounts have a variable interest rate. As of April 23, 2020, the interest rate is 0.01%. The rate could go up or down based on market conditions.

Opening Deposit

There is no minimum opening deposit or minimum balance that you need to maintain in your Fidelity Cash Management Account.

Restrictions

You must be at least 18 years old to open a Cash Management Account. You also have to provide a Social Security number or Taxpayer ID number. Non-U.S. citizens may provide a copy of a valid government ID.

Fees

There are no monthly or quarterly fees for a Fidelity Cash Management Account. You can use any ATM, and Fidelity will reimburse you for the fees.

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Who Is the Fidelity Cash Management Account Best For?

A Fidelity Cash Management Account is a great fit for anyone who doesn’t need a brick-and-mortar bank. It’s an especially good fit for people who maintain high balances in their checking accounts. It’s also a good choice for those who already have a Fidelity brokerage account for investing or those who are interested in opening one. You can seamlessly move money between accounts and invest when you want to.

Benefits

The interest rate is relatively low, but many checking accounts don’t pay interest at all. Additionally, you can have more than $250,000 in your Cash Management Account and still receive FDIC protection for all your funds. And the Cash Management Account makes it easy to keep all your finances in one place. Instead of using a bank for checking and savings and a brokerage for investing, you can do all your financial tasks through your brokerage accounts.

Drawbacks

A primary drawback of the Fidelity Cash Management Account is that you can only withdraw money via an ATM. Also, there are also only 39 investor centers, which means that you might be hard-pressed to find a close physical branch.

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What Do I Need To Open a Fidelity Account?

You will need to provide basic identifying information to Fidelity so it can confirm your identity. You will also need to make an initial deposit, although the amount is up to you. You can open an account online or submit a paper application.

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This article has been updated with additional reporting since its original publication.

Rates are subject to change. All other information on accounts is accurate as of March 17, 2020.

This content is not provided by Vio Bank. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Vio Bank.

About the Author

Joel Anderson

Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.