A cash management account (CMA) is a type of financial account that combines banking features, such as check writing, debit card, and interest-earning savings, with investment features, such as the ability to easily move money into your investing accounts. CMAs are typically offered by nonbank financial service providers, such as investment advisory firms or broker-dealers. They are designed to help customers keep large sums of money secure and easy to access, while also paying some interest. Some of the benefits of a CMA include:

• Simplified account ownership: A CMA can streamline your finances by allowing you to make transactions, earn high-yield interest, and sometimes use a credit line that’s attached to your investment securities all without having to transfer funds between different accounts.

• Alternative to checking and savings accounts: Cash management accounts often come with mobile check deposit, bill pay, money transfers, goal setting, overdraft programs, and more. They tend to pay higher interest than checking accounts, many of which earn no interest at all.

• Higher interest rates: CMAs can provide high interest rates and reasonable or no fees thanks to low overhead that comes from online-only services.

However, it is important to consider whether opening a cash management account is really necessary or right for you and your financial situation.