As its name implies, a central assets account is a type of account which you set up with a single financial institution that centralizes all your assets. With a central assets account, you can manage many different financial services within one combined account, including checking, savings, ATM and debit cards, lines of credit, money market accounts, and even a credit card account. If you open this account with a brokerage service, your central assets account will also include your brokerage account and help you manage your investments in a centralized way.
In terms of brokerage accounts, a central asset account provides full service options regarding stocks, bonds, mutual funds, and any other type of investments. The key advantage of a central assets account is that it provides a single source for managing all aspects of your finances. It’s a “one stop shopping” approach to asset management, which allows you to deal with one institution for all your financial planning needs. A central assets account also allows you to transfer funds easily between your accounts, so you can quickly move funds where and when they are needed. Consolidated statements also help you categorize financial transactions, and can be handy at tax time.
Some central assets accounts also include a “sweep” feature, you can set to periodically sweep unallocated funds over a set balance into an interest-generating account such as a money market account. This automatic transfer feature helps you to make sure your money is earning the best interest rate possible and keeps your assets working for you.
There are a variety of fees associated with central assets accounts, but typically the rate for these fees are set to somewhere between $50 and $150 per year. There is also a relatively high minimum balance requirement, generally between $5000 and $25000, to open a central assets account. However, if you compare the services offered with what you might pay to maintain your accounts separately, you may find that a central assets account is the best brokerage account option for you.