Cash Management Accounts

What is and how does a cash management account work?

A cash management account is basically a savings account, however some financial institutions refer to them as investment accounts.

Having an account such as this, means it is a lot easier for you to access your money whenever you need it. Many of these accounts come with online trading platforms to save you time when managing your investments.

InfoChoice compares over 30 Cash Management savings accounts:

How a cash management account help you?

These accounts tend to offer higher interest rates in comparison to standard savings accounts. Oftentimes, these accounts have high balances, which means the amount you earn in interest could be quite substantial.

• Unlike other savings accounts, cash management accounts allow you to access funds at ATMs and allow you to pay bills via BPAY.
• Another great benefit of a Cash Management account is that all related transactions appear on a single statement. This could be very useful when it comes to tax time.
• Keep in mind that cash management accounts usually have requirements such as a minimum account opening balance. This can be anywhere from $5000-$10,000.
• Some accounts have a minimum monthly deposit requirement, whilst others don’t.
• Always compare the relevant minimum deposit amounts before locking in to any particular account.

What criteria do I need to meet in order to be eligible for a Cash Management account?

As with most accounts you need to be over 18 years of age top open a Cash Management account. However, some institutions will allow you to be eligible from 16 years of age. You will need to be an Australian resident in order to apply.

Can I apply for a Cash Management fund online?

Yes you can. When applying for any account you will always be asked to verify your identification, age and residency status.

What should I look for when comparing cash management accounts?

By comparing the following features you will be able to make an informed decision as to which account is best for you:

1. Interest rate

Check out what interest rate is being offered. Some institutions have the same interest rate no matter how much you deposit. Others, have a tiered system depending on the amount you put in.

2. Access to funds

If you would like to be able to access your funds whenever you need them, look for funds that allow access and payments via ATMs, EFTPOS, Internet banking, phone banking, cheque books, branch banking, and even BPAY.

3. Fees and charges

Cash management accounts usually don’t charge monthly management fees. Online and phone transactions are usually free. However, it’s up to the financial institution as to whether or not they charge transaction fees, or use cheques and staff assisted transactions.