Benefits of Cash Management Account: Unlocking Financial Efficiency and Flexibility
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Cash management account (CMA) offers many benefits that can help both investors and savers to grow their wealth. Comparing CMA to other form of investment, it is a low risk, high reward investment options perfect for you who are risk adverse.
So what are the few main benefits that CMA actually offers, let’s take a look.
KEY TAKEAWAYS
- Cash Management Account (CMA) is an all-in-one account for you to save, grow and invest your idle cash.
- CMA is a form of low risk investment where your principle is generally save and the interest rate are generally stable.
- Opening a Cash Management Account offers let you grow your idle cash while enjoying competitive interest rate that rival Fix-Deposit, T-bills and Government-Bonds.
Benefits of Cash Management Accounts
Cash management accounts (CMAs) combine the features and benefits of savings, checking, and investment accounts, giving you a versatile financial tool. They are especially beneficial when you want to centralize your finances while still earning competitive interest rates.
1. Enhanced Liquidity and Flexibility
Your cash management account allows you to access funds with ease, like a checking account, while still providing the opportunity to invest.
With features such as check writing, debit card access, and direct deposit, a CMA offers a level of liquidity akin to traditional bank accounts paired with the flexibility to swiftly move between investments.
2. Optimized Interest Earnings
Enjoy higher earning potential through accounts that offer high-yield interest rates.
Unlike traditional savings accounts, CMAs often yield more competitive Annual Percentage Yields (APY), ensuring your idle cash works harder for you.
Savings Accounts | Cash Management Accounts |
---|---|
Average APY of less than 3% | High-Yield APY of up to 7% |
Limited transactions allowed for earing interest | Unlimited transfers while earing high interest |
3. Consolidated Financial Management
By integrating the functionality of checking and savings accounts with the ability to invest, a CMA simplifies your financial landscape.
You can manage all your transactions, savings, and investments under a single umbrella, eliminating the need to juggle multiple accounts.
4. Improved Online and Mobile Banking
With the latest online and mobile banking tools, overseeing your CMA on the go has never been easier.
These platforms provide a seamless interface so you can check balances, transfer funds, and pay bills with a click or a tap, wherever you are.
5. Security and Peace of Mind
Invest with confidence knowing your funds are often protected. Similar to traditional banking systems, many cash management accounts offer security measures and insurance (subject to regulatory limits), giving you peace of mind that your money is safe.
6. Reduction in Fees and Charges
CMAs are well-known for their lower fees. You may benefit from:
- No monthly maintenance fees
- No minimum balance requirements
- No foreign transaction fees
- No transaction fees to your brokerage account
- No withdrawal fees and limit
Getting yourself a CMA is a cost-effective way to manage and grow your money.
7. Banking with No Minimum Balance
You’re free from the restraints of maintaining a minimum balance threshold, a feature that optimizes your financial autonomy.
This potentially paves the way for improved cash flow management, making a CMA attractive for its financial flexibility.
Choosing The Best Cash Management Account
When scouting for a cash management account (CMA), you’re likely looking for one that allows your money to grow, offers flexibility, and aligns with your personal financial needs. To make an informed decision, here are critical factors to consider:
- Interest Rates: Seek accounts with competitive interest rates to maximize your earnings. Remember, interest rates can fluctuate based on market conditions, so opt for providers offering favorable rates after accounting for any fees.
- Fees: It’s essential to understand the fee structure of any potential account. Some CMAs offer zero monthly fees, making them an attractive option. Look for accounts without monthly fees and minimal fund management charges to ensure your returns aren’t significantly impacted.
- Minimum Balance Requirements: An advantage of many CMAs is the low or sometimes nonexistent minimum balance requirement, providing flexibility and accessibility. This means you can start earning interest without a significant upfront investment.
- Liquidity: Always consider how quickly and easily you can access your funds. Accounts that offer high liquidity with no lock-in periods or withdrawal limits ensure that your cash is available whenever you need it.
Quick Look Into CMAs in Singapore
Cash Management Account Broker | Est. Returns (p.a.) | Min. Deposit | Fees | Withdrawal Limit | Liquidity | Funding |
---|---|---|---|---|---|---|
Moomoo Cash Plus (SGD) | 3.0-4.5%*` | $0.01 | No Fees | Unlimited | High, No Lock-in | Cash |
Moomoo Cash Plus (USD) | 4.0-5.8%*` | $0.01 | No Fees | Unlimited | High, No Lock-in | Cash |
Moneybull By Webull (SGD) | 3.0-4.5%*` | $1 | No Fees | Unlimited | High, No Lock-in | Cash |
Moneybull By Webull (USD) | 3.8-5.4%*` | $1 | No Fees | Unlimited | High, No Lock-in | Cash |
Endowus Cash Smart Secure | 3.5% to 3.8%* | $1,000 | Fund Fees: 0.15% Management Fees: 0.05% | Unlimited | High, No Lock-in | SRS and Cash |
Endowus Cash Smart Enhanced | 4.1% to 4.4%* | $1,000 | Fund Fees: 0.27% Management Fees: 0.05% | Unlimited | High, No Lock-in | SRS and Cash |
Endowus Cash Smart Ultra | 4.6% to 4.9%* | $1,000 | Fund Fees: 0.29% Management Fees: 0.05% | Unlimited | High, No Lock-in | SRS and Cash |
StashAway Simple | 3.4%* | $1 | Fund Fees: 0.15% Management Fees: 0.15% | Unlimited | High, No Lock-in | SRS and Cash |
StashAway Simple Plus | 4.6% to 5%* | $1 | Fund Fees: 0.19% Management Fees: 0.20% | Unlimited | High, No Lock-in | SRS and Cash |
Syfe Cash+ | 3.5%* | $1 | Fund Fees: 0.15%^ Management Fees: 0.00% | Unlimited | High, No Lock-in | Cash |
*Projected returns after all fees & interest rate is subjected to change.
^Fees after trailer fees rebate.
`Management fee is charged by the fund company which are included in the NAV calculation.
Note: Data are consolidated, checked for accuracy and ensure outmost reliability by the Author through hours of research into each of the low-risk investment options, the author aims to provide the most accurate data by following strictly according to our editorial guidelines but always do your own due diligence before investing.
When selecting the right CMA in Singapore, prioritize one that have minimal fees, maximum interest earning, no withdrawal limit for high liquidity and licensed by MAS.
Strike a balance when choosing a cash management account that offer stable returns and one that fit into your overall financial strategy.
Personally, I sign-up to Moomoo for my Cash Management Account, a brokerage dealer regulated by Monetary Authority of Singapore (MAS). Here are some of the top CMA in Singapore you may want to consider.
5.32%
p.a. (Approx.)
$1,330
Est. earning over 1 year at $25,000
- $1 Min.
- No Lock-in
- No Redemption Fee
- No Subscription Fee
5.30%
p.a. (Approx.)
$1,325
Est. earning over 1 year at $25,000
- $1 Min.
- No Lock-in
- No Redemption Fee
- No Subscription Fee
Note: The information is accurate at the time of writing.
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Disclaimer: All views expressed in the article are independent opinion of the author, based on my own trading and investing experience. Neither the companies mentioned or its affiliates shall be liable for the content of the information provided. The information was accurate to the best knowledge of the author. This advertisement has not been reviewed by the Monetary Authority of Singapore. * T&C Applies
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Antony C. is a dividend investor with over 15+ years of investing experience. He’s also the book author of “Start Small, Dream Big“, certified PMP® holder and founder of IncomeBuddies.com (IB). At IB, he share his personal journey and expertise on growing passive income through dividend investing and building online business. Antony has been featured in global news outlet including Yahoo Finance, Nasdaq and Non Fiction Author Association (NFAA).