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Banking

The Best Prepaid Debit Cards

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

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Prepaid debit cards are flexible tools that can help you manage your financial life. If you don’t have a bank account but need to pay with a card, a prepaid debit card does the trick. Tend to overdraft your checking accounts? A prepaid debit card can help you avoid nasty overdraft fees.

The best part of prepaid debit cards is that you can use them anywhere the card issuer is accepted, whether that’s Visa, Discover, Mastercard or American Express. But which to choose? There are hundreds of options, many of which charge fees — there can be several — and have balance limits.

To help you avoid fees and select the best prepaid debit card for your needs, we weighed a range of key factors and found the top options for a range of different users. We identified the best prepaid cards for low fees, which can be especially helpful if you’re already tight on money. We also found prepaid debit cards with the lowest ATM withdrawal fees to ensure you can access your cash. It’s also important to be able to fund your prepaid card without it costing an arm and a leg, so we list the best prepaid cards for cash reloads and direct deposits. Finally, we looked at the best rewards prepaid debit cards.

The best low-fee prepaid debit cards

Prepaid debit cards are great options if you don’t qualify for traditional banking products, whether because of traditional banking fees or bad credit. Either way, we’ve found the best prepaid cards without monthly fees so that you can take advantage of their benefits. We ranked the following cards by looking for the lowest monthly and activation fees.

Bluebird by American Express — $0 monthly fee, $0 activation fee

Bluebird by American ExpressBluebird by American Express is our top low-fee pick thanks to its lack of monthly, annual and activation fees. The card is free to purchase online, but it costs $5 if you buy a Bluebird Account Set Up Kit at a Walmart store.

The Bluebird card is also a low-fee favorite for its free reloading options through direct deposit, debit cards and cash deposits at Walmart. If you want to deposit cash at another participating retail location, it can cost up to $3.95 per deposit. You can withdraw money for free from any MoneyPass ATM. All out-of-network ATM withdrawals will incur an American Express fee of $2.50, in addition to a possible surcharge from the ATM owner. It doesn’t charge fees for replacement cards, foreign exchange withdrawals or account inactivity.

You can use the Bluebird by American Express card anywhere American Express is accepted. Just keep in mind that American Express isn’t accepted by merchants everywhere. Bluebird Checks are also available ($19.95 per checkbook, plus taxes and shipping) to make purchases. You must have each check pre-authorized to prevent you from writing a check for more than you have in your Bluebird account.

Your Bluebird funds are Federal Deposit Insurance Corp.-insured through American Express National Bank.

Navy Federal Credit Union GO Prepaid Card — $0 monthly fee, $0 activation fee

Navy Federal Credit Union GO Prepaid Card With a promise of no hidden fees, the Navy Federal Credit Union GO Prepaid Card doesn’t charge you for opening and activating the card, or for making purchases. When you open a card, you must fund it with at least $20 initially with a Navy Federal debit card or credit card. Other payment forms are not accepted when first funding the account. You can use Navy Federal ATMs without facing a fee, but using out-of-network ATMs both domestically and internationally will incur a $1 charge from Navy Federal. Transactions made in foreign countries in U.S. dollars or foreign currency, both for purchases and at ATMs, will trigger a Visa International Service Assessment Fee of 1.0% of the transaction amount.

Navy Federal membership includes active-duty military members, veterans, retirees, select Department of Defense employees and immediate family members of eligible service members. You must be a member of the credit union who is 18 or older and listed as primary owner on a Navy Federal savings account to open a GO Prepaid Card.

MyVanilla Prepaid Card — $0 monthly fee, up to $3.95 activation fee

MyVanilla Prepaid Card You don’t have to worry about a monthly fee with a MyVanilla Prepaid Card. The card allows free direct deposit, bank transfers and MyVanilla card-to-card online transfers to fund your account. Adding funds through a Vanilla Reload network retailer can cost up to $3.95, depending on the merchant.

Using a MyVanilla Prepaid Card to withdraw cash isn’t always fee-free. Although the card’s website indicates surcharge-free MoneyPass ATM access, using any domestic ATM, including MoneyPass machines, will cost $1.95, according to customer service. International ATM withdrawals cost $4.95. To avoid setting your savings back, you’ll want to stick to using a MyVanilla card simply to make purchases.

MyVanilla Prepaid reloadable cards can be opened either as a Visa or Mastercard. There are only slight differences in retailers that accept one versus the other, so you can choose based on preference. You can open a MyVanilla Card online or at participating retailers, such as Family Dollar, Walmart and Walgreens. After purchasing the card at a store, you need to register it online to start using it.

Whether Visa or Mastercard, all MyVanilla Prepaid Cards are FDIC-insured through The Bancorp Bank.

The best prepaid debit cards for ATM withdrawals

While prepaid debit cards come with the convenience of debit and credit cards, it can still help to have cash on hand sometimes. To find the best prepaid debit cards for ATM withdrawals, we looked for those with the lowest fees for both in-network and out-of-network ATMs, while taking widespread ATM access into consideration.

Affinity Plus Federal Credit Union Visa® Reloadable Prepaid Card — $0 in-network and out-of-network ATM fees

Affinity Plus Federal Credit Union Visa® Reloadable Prepaid Card As you might expect, banks don’t often allow you to make ATM withdrawals at other banks for free. Affinity Plus Federal Credit Union does things a little differently with its Visa® Reloadable Prepaid Card: There are no fees for using both in-network and out-of-network ATMs. Also, there are no fees for account maintenance, purchases, cash deposits or inactivity.

The card costs $4.95, whether at an Affinity Plus branch or online. You can load any amount between $20 and $5,000.

Headquartered in St. Paul. Minn., Affinity Plus FCU serves the Minnesota community, with branches throughout the state. To become an Affinity Plus FCU member, you must work or volunteer at select organizations, attend or have graduated from select schools or live, work or worship in select Minnesota cities. You may also be eligible through relatives or roommates with which you live. You can also join by making a one-time $25 dues payment to the Affinity Plus Foundation.

Navy Federal Credit Union GO Prepaid Card — $0 in-network ATM fee, $1 out-of-network ATM fee

Navy Federal Credit Union GO Prepaid Card Already one of our best low-fee prepaid debit cards, the Navy Federal Credit Union GO Prepaid Card also offers one of the best out-of-network ATM fee deals — $1. Just keep in mind that the ATM owner may charge additional fees. The card also has no fees for monthly maintenance, card activation, ownership and purchases.

You’ll have to be a member of Navy Federal Credit Union who is at least 18 years old with a Social Security number and primary ownership of a Navy Federal savings account to be able to open a GO Prepaid Card. Membership is open — but not limited — to active-duty members of the military, veterans, select Department of Defense employees and immediate family members of eligible service members.

UFCU ABILITY Card — $0 in-network ATM fee, $1 out-of-network ATM fee

UFCU ABILITY CardUniversity Federal Credit Union offers ABILITY Card holders access to over 300 UFCU Alliance ATMs. But if you find yourself using an out-of-network ATM, UFCU will charge only a $1 fee for each transaction. Still, while that’s the lowest fee you’ll find, try to stick to using in-network ATMs, especially since non-UFCU ATM owners may also charge fees. Avoiding an out-of-network ATM fee pileup can be helpful since there is already a $5 monthly fee to keep the card.

To open an ABILITY Card, you’ll need at least $25, although there’s no opening fee for UFCU members. There are no fees for reloading, but you’re limited to $1,000 in withdrawals and $2,000 in purchases per day.

You’ll need to be a member of the credit union to open an ABILITY Card. You can join UFCU if you’re employed by a company, enrolled in a school or belong to an association in the credit union’s field of membership. You can also join if an immediate family member is a member or if you join the University of Texas Longhorn Foundation.

UFCU has locations and ATMs across central Texas and Galveston County, and offers members access to hundreds of National Shared Branch Network locations as well.

The best prepaid debit cards for cash deposits

You shouldn’t have to pay to keep your cash safe in an account, but many prepaid cards charge a fee when you reload the card with cash. The best prepaid cards for cash deposits are those that not only offer the service for free, but also offer the ease and convenience of being able to reload at thousands of locations.

American Express Serve® Free Reloads Card — $0 cash deposits at select locations

American Express Serve® Free Reloads Card The American Express Serve® Free Reloads Card provides access to the largest network of locations to make free cash reloads on your card. It has over 45,000 locations, including retailers like CVS, Family Dollar, Rite Aid and Walmart. Direct deposits and bank transfers are also fee-free. The card also includes Early Direct Deposit, which allows you to get your paychecks deposited on the card up to two days early.

The card costs $0 to open online, but up to $3.95 at retail locations. There is a $6.95 monthly fee unless you are a Texas, New York or Vermont customer. Also be mindful when using ATMs, as you can get charged $0.75 each time you enter an invalid PIN, exceed your ATM withdrawal limits or you have insufficient funds.

Bluebird by American Express — $0 cash deposits at Walmart

Bluebird by American Express In addition to being our top low-fee prepaid debit card, the Bluebird by American Express card is also great for cash deposits. You can add cash to your Bluebird by American Express card for free at virtually any Walmart checkout register. Having a personalized card allows you to add between $1 and $1,999. You can also add cash at other participating locations, including CVS, Walgreens and 7-Eleven, although these merchants will charge a fee up to $3.95. Other free reload options are direct deposit and from a debit card. Master Account holders can also deposit money for free with 10-day Mobile Check Capture by Ingo Money.

You can open a Bluebird account for $5 at a Walmart store, online or on the Bluebird Mobile App through the App Store or Google Play. There is no Bluebird monthly, annual or activation fee. You can use your card to make purchases anywhere American Express is accepted. To withdraw cash from the card, you can do so for free at any MoneyPass ATM or for a fee at out-of-network ATMs or through Cash Pickup Powered by Ria.

The best prepaid debit cards for direct deposits

Debit card issuers often hold paycheck funds for a few days after an employer notifies them of a direct deposit. These best prepaid debit cards for direct deposits can bypass that waiting period and get you your paycheck up to two days earlier, without charging an extra fee for this handy service.

RushCard Prepaid Visa — $0 early direct deposits

RushCard Prepaid Visa Our first pick is the RushCard Prepaid Visa, which allows free and early direct deposits. RushCard puts direct deposit funds — including employer paychecks, government benefits and tax refunds — in your account as soon as they are notified of the deposit.

You can deposit cash without a RushCard fee at thousands of retail locations, including CVS, or through services like MoneyPak. While RushCard won’t charge you for these cash deposits, there may still be a third-party fee. There may also be fees for check deposits and cashing checks.

You can open a RushCard Prepaid Visa on one of two different plans. The Unlimited Plan allows for unlimited purchases and costs either $5.95 a month with direct deposit or $7.95 a month without direct deposit. But if you feel like you won’t use the card all that much, the Pay As You Go Plan might be a better option. There is no monthly fee; instead, you pay $1 per purchase. While it advertises no activation fee, there is a $3.95 or $9.95 fee when you first fund your card or change the design (the exact fee depends on the card design you choose).

The RushCard Prepaid Visa is issued by MetaBank, which is insured by the FDIC.

Green Dot Prepaid Card — $0 early direct deposits

Green Dot Prepaid Card Making direct deposits on your Green Dot Prepaid Card is the best way to load this card. Not only are they free, but you can get access to your paychecks up to two days earlier than usual, like with the RushCard. Cash reloads, on the other hand, can cost up to $5.95 in third-party fees.

The Green Dot Prepaid Card does charge a $7.95 monthly service fee. However, loading at least $1,000 on the card in a month will waive the service fee for the following month. Setting up direct deposits can be extra beneficial here since direct deposits, unlike cash reloads, are free.

You can buy and open a Green Dot Prepaid Card for up to $1.95 only at participating stores, either as a Mastercard or Visa.

Netspend Prepaid Card — $0 early direct deposits

Netspend Prepaid Card The Netspend Prepaid Card is another great option if you’re looking to get your paychecks direct deposited early. You can get paid up to two days faster when you set up free card reloads through direct deposit. Cash deposits cost $3.95 for each reload.

The Netspend Prepaid Card is available in three different plans. The Pay-As-You-Go-Plan charges a fee per transaction instead of a monthly fee, making this choice best for occasional use only. If you’ll need the card more often, consider the Monthly Plan, which charges a flat monthly fee, which can vary depending on the issuer. You can also upgrade to Netspend Premier, which cuts your monthly fee in half by enrolling in direct deposit and having at least $500 direct deposited into your account each month.

The card is issued by either Axos Bank, The Bancorp Bank, MetaBank or Republic Bank & Trust Co.; you can check the issuing bank on the back of your card.

The best rewards prepaid debit cards

Having a prepaid debit card doesn’t mean you don’t deserve rewards. The following cards offer the best rewards programs you’ll find among prepaid debit cards.

American Express Serve Cash Back — 1% cash back on purchases

American Express Serve Cash Back — 1% cash back on purchases The American Express Serve Cash Back prepaid card earns unlimited 1% cash back on all purchases rounded to the nearest dollar. Plus, the cashback rewards are added directly to your account after each purchase, so you don’t have to wait for the end of the month for rewards.

Your rewards can help offset the card’s $7.95 monthly fee (unless you live in Texas, New York or Vermont, where there is no fee). There is also an opening fee of up to $3.95 if you don’t open the card online and a cash reload fee of up to $3.95. There are no fees for direct deposit, bank account transfers, MoneyPass ATM withdrawals or sending/receiving money.

Netspend Prepaid Card — cashback rewards

Netspend Prepaid Card Already a great option for direct deposits, the Netspend Prepaid Card is also a solid rewards prepaid card. Through Netspend Payback Rewards, you can earn cash back on your purchases, with rewards customized according to your spending habits. You activate reward offers online in your Netspend account, then use your card at selected retailers to redeem the rewards.

In addition to direct deposit, you can fund the NetSpend Prepaid Card for free via account transfers between other Netspend accounts. Reloading with cash or Mobile Check Load on the app, however, will result in a fee. Accessing cash through an ATM will also cost $2.50.

The Netspend Prepaid Card charges a monthly fee on its Monthly Plan and Netspend Premier cards. The Pay-As-You-Go Plan allows you to do just that: pay per transaction, which should be occasional so as not to lose money to fees. Regardless of your plan, be careful of the $5.95 inactivity fee that is charged per month after 90 days without transactions. The card is issued by either Axos Bank, The Bancorp Bank, MetaBank or Republic Bank & Trust Co., which you can check on the back of your card.

Walmart MoneyCard by Green Dot — 3% cash back

Walmart MoneyCard by Green Dot The Walmart MoneyCard by Green Dot works best for loyal Walmart customers. You can earn 3% cash back at Walmart.com, 2% cash back at Murphy USA and Walmart fuel stations, and 1% cash back at Walmart stores. In total, you can earn up to $75 cash back each year. While you’re spending at Walmart, you can also get cash for free at participating Walmart MoneyCenters and customer service desks.

It costs $1 to open a Walmart MoneyCard at a participating Walmart store. There is also a $5 monthly fee unless you load $1,000 or more on the card each month. You can reload your card for free with direct deposit, Walmart check cashing and online bank transfers. You can even receive your direct deposits up to two days earlier, too, with ASAP Direct Deposit™. Reloading the card with cash, however, can cost up to $5.95, depending on the retailer.

What is a prepaid debit card?

If you’re not familiar at this point, a prepaid debit card works much like it sounds. You load money on the card, whether with cash, a check or direct deposit. Unlike a regular debit card, prepaid debit cards aren’t linked to a checking account. And although prepaid debit cards are offered by the main issuers of credit cards, prepaid debit cards aren’t like credit cards at all, where you borrow money and pay it back later. With a prepaid card, you’re spending the money in real time. Plus, you cannot spend more than you have on the card, preventing messy overdrafts and fees.

Why should you use a prepaid debit card?

  • You don’t have access to a bank account: According to the FDIC, about 8.4 million U.S. households were unbanked in 2017, meaning they did not have an account at an insured financial institution. Although many banks offer prepaid debit cards, you don’t have to have a checking or savings account to have a prepaid debit card. Prepaid debit cards allow you to deposit the cash or checks you do have and use the card to make purchases or pay your bills. This comes in handy for online payments or when stores have gone cashless.
  • Prepaid debit cards don’t require good credit: If you have bad marks on your credit history, it can be difficult qualifying for a credit card or opening a bank account. Prepaid debit cards come with little risk to the issuer, so they typically won’t check your credit report. That makes it a payment option even for folks who have bad credit. If that applies to you, use the prepaid debit card as a tool to improve your spending habits. The card may not boost your credit score, but you should still be responsible when using the card.
  • Prepaid debit cards can be cheaper than alternative money services: Without a debit or credit card or checks, there aren’t many ways to send money securely. Money orders are one option, although they come with their own set of fees that can pile up. Sending and receiving remittances, and even check cashing come with their own sets of fees charged per transaction. Prepaid cards serve the middle ground, offering convenient payment and low fees. You can find the best prepaid cards for low fees and ATM withdrawals above.
  • You want to lessen the risk of online payments: While technology has made our lives a lot easier to send and spend money, it has also made money easier to steal. One wrong click, and fraudsters could have your bank account numbers in no time. Using your prepaid debit card limits exposure to your bank account. Even if the prepaid card number is stolen, the thief can use only what’s on the card at that time rather than all your savings.

Are prepaid debit cards safe?

Generally, if you obtain a prepaid debit card, your money will be FDIC-insured through the issuing or partner bank. Additionally, thanks to a new rule from the Consumer Finance Protection Bureau (CFPB), there are more protections in place for prepaid debit cardholders. Through this rule, you can monitor your accounts online more easily and protect your money if a card is lost, stolen or incorrectly charged. The CFPB will also ensure you’re provided with honest and upfront information about card policies and fees so you can really find the best fit.

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Banking

List of Banks and Credit Unions Offering COVID-19 Relief

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Millions of Americans are struggling with changes to their work hours and incomes. In response, many banks and credit unions are offering relief packages, often waiving certain fees or granting expedited services. Although not listed below, community banks may offer an even stronger support system to those financially impacted.

We will continue to update this page regularly.

List of banks and credit unions offering relief to customers affected by COVID-19

Alliant Credit Union

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Alliant Credit Union does not currently have a COVID-related information page available on its website. However, according to an Alliant representative, the credit union is working with members on a case-by-case basis to remove deposit-related account fees.

Ally Bank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Online-only Ally Bank currently has an expansive COVID-19 relief plan, especially in comparison to other banks. The bank has outlined measures to help customers, employees and communities.

Until July 18, 2020, Ally Bank deposits customers can benefit from waived overdraft fees; free expedited checks and debit cards; and refunded excessive transaction fees on your savings or money market accounts.

Transfers and online payments remain uninterrupted. Plus, Ally Bank has made it faster to deposit checks of $50,000 or less online with Ally eCheck deposit. You can still use mobile deposit via the Ally Mobile app.

American Express

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

American Express has not released any specific COVID-19 relief plans to help its Personal Savings banking customers at this time.

Customers of the online-only bank can continue to access their accounts online. They can also call customer service at 1-800-446-6307 — just beware that wait times may be longer than usual.

Bank of America

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Bank of America’s COVID-19 response is to urge customers who are facing financial hardship to contact a representative to request refunds for fees on overdrafts, non-sufficient funds and monthly maintenance. Customers may also use the bank’s virtual assistant, Erica, to get answers to any questions, including those that are coronavirus-related.

Bank of America also encourages its customers to turn to mobile and online banking first, both of which allow you to check your account status, pay bills and deposit checks.

Bank of America financial centers remain open. The bank’s locations are open Monday through Friday, 10 a.m. to 4 p.m. local time, while Saturdays maintain regular hours, which vary from branch to branch. Branches that remain open undergo “enhanced, daily cleanings” and “other measures to limit the risk of exposure, based on guidelines from the Centers for Disease Control and Prevention (CDC).”

BBVA

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

In response to COVID-19 difficulties, BBVA banking customers can request waived and refunded ATM fees, penalty-free CD withdrawals (for CDs opened before March 1) and overdraft fee refunds. You can make these requests by calling 1-844-228-1872.

BBVA locations have transitioned to primarily drive-thru service only. Branches that do not have a drive-thru are open on a limited basis. ATMs remain open 24/7 and banking center lobbies are open by appointment, which you can schedule by calling your banker or banking center. BBVA Online Banking and the BBVA Mobile Banking App are also available to you 24/7.

BMO Harris

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Under its financial relief program, BMO Harris asks deposit account customers with questions about account fees to send them a message. Customers can expect a response within 10 business days.

You can also call the bank’s Customer Contact Center at 1-888-340-2265, which operates seven days a week from 8 a.m. to 8 p.m. CST. If you need assistance with your credit card account — whether to report a lost or stolen debit card, activate a debit card or reset your BMO Digital Banking password — bankers are available 24/7.

All BMO branch lobbies are currently closed, while drive-up service remains available at most branches. Those located near the bank’s main Chicago branch at 111 West Monroe can visit the branch, open for limited access, Monday through Friday from 9:30 a.m. to 4 p.m. The branch is open exclusively to elderly and vulnerable customers between the hours of 9 a.m. and 9:30 a.m.

Capital One

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

In response to the coronavirus pandemic, Capital One is waiving its out-of-network ATM fee. It won’t reimburse you for a third-party surcharge, though.

If you are facing financial difficulties, you can contact Capital One and a representative can help to find a solution for you. Note that customer service wait times are likely longer than usual right now.

Capital One has temporarily closed select branches that do not have drive-thru tellers or protective glass at teller counters. Branches that do have those features will remain open via those outlets and are being disinfected per CDC guidelines. Tellers may still assist customers in the lobby in special circumstances. Capital One ATMs remain open 24/7. Capital One also strongly encourages its customers to use the Capital One mobile app or online banking to make payments, check balances and deposit checks.

Charles Schwab

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Charles Schwab has no specific measures in place to provide relief aid to its banking customers amid the coronavirus outbreak.

Schwab branches are temporarily closed and will remain so until local, state and federal government recommendations indicate it is safe to reopen. Still, you can contact a branch directly by phone to reach a representative. Schwab also encourages customers to go digital by completing tasks online or via its mobile app, which includes check-depositing capabilities.

Chase

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

In light of the pandemic, Chase Bank customers are encouraged to use the Chase Mobile app and online banking to complete their account-related tasks. Chase asks that those who need help because of COVID-19 reach out to a representative, though you may experience wait times that are longer than usual.

Several Chase branches are temporarily closed, while other branches’ hours and services have been adjusted. You can check the status of your branch on the Chase Mobile app or online. Chase branches and ATMs are being cleaned with EPA-approved disinfectants.

On a wider scale, JPMorgan Chase has pledged $50 million to nonprofit organizations to help support “healthcare, food and other humanitarian relief” efforts globally; community partners; and small businesses in the U.S., China and Europe.

Citibank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Citibank is waiving monthly service fees and early withdrawal penalties through May 31, 2020. Fees are also temporarily waived on safe deposit boxes and non-Citi ATM usage.

Citibank also asks that those affected by COVID-19 contact the bank for assistance, although wait times may be longer than usual. If you already work with a personal banker or financial advisor through Citibank, you can contact them directly during their regular business hours. You can also text “App” to 692-484 to avoid call wait times and Citi will direct you to its digital tools or automated response system or send you a link to message a representative in the Citi Mobile App.

Select Citibank branches are closed and those that are open are operating under temporarily limited hours and undergoing “daily cleaning procedures … on high-touch surfaces,” providing hand sanitizer and practicing CDC recommendations like social distancing. You can also access your accounts and funds via the Citi Mobile app, the Citibank website and Citi ATMs on a 24/7 basis.

Citizens Access

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Citizens Access encourages customers to contact its Customer Care team through a a secure message through your online account or by calling a representative at 1-888-201-6505, available Monday through Friday from 8 a.m. to 10 p.m.; Saturday from 9 a.m. to 3 p.m.; and Sunday from 10 a.m. to 3 p.m. EST. You can expect a secure message response within one to three days; wait times on the phone will also be longer.

As Citizens Access has no physical branches, you can always access your account online, both on desktop and your mobile browser. The bank does not have a mobile app.

Citizens Bank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Citizens Bank deposit account customers can expect overdraft fee waivers, service charge reversal and penalty-free early CD withdrawals, as part of the bank’s COVID-19 relief response. Customers with checking, savings and CD accounts can call customer service at 1-800-922-9999 Monday through Friday from 7:00 a.m. to 10:00 p.m. and Saturday and Sunday from 9:00 a.m. to 6:00 p.m. local time. If you want to open a new account over the phone, you can call 1-877-360-2472.

Citizens Bank branches remain open. Hours are reduced to Monday through Friday from 10 a.m. to 3 p.m. and on Saturday from 9 a.m. to 12 p.m. (unless the branch is typically closed). All drive-ups remain open, while branch lobbies are open by appointment only and limited to two customers at a time. Teller counters, also available by appointment only, now have plexiglass windows installed and serve one customer at a time “while adhering to social distancing protocols.” You can contact or check the status of a Citizens Bank branch here.

Digital Federal Credit Union (DCU)

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Digital Federal Credit Union offers an extensive financial relief program, which is available to its members in any financial rut, not just during this pandemic. Until further notice, DCU is offering unlimited ATM fee reimbursements and forgoing all overdraft and nonsufficient funds fees. Those who need to borrow money during this time may take out a personal loan from DCU, which won’t require payments for 60 days on loans opened after March 25, 2020.

All DCU branch lobbies are closed, though some branches remain open through their drive-up teller windows, which can help you with normal transactions. You can check your branch status here.

Otherwise, you can access your account 24/7 via online banking and the DCU mobile app. You can also send an email for non-urgent requests, which are typically answered in two business days, or you can call customer service, though it is currently experiencing extremely high call volumes that may result in much longer wait times.

Discover

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Discover has “support in place for qualified Discover customers who experience hardship” due to the coronavirus pandemic. Although it is unclear what qualifies customers to receive this support, a Discover representative adds that “Discover customers may receive assistance related to payments, fees and interest.”

Discover Online Banking customers can call 1-800-347-7000 (TTY/TDD 1-800-347-7454) any time to reach a Discover representative for assistance. You also can continue to access your accounts online or via the Discover mobile app.

Fifth and Third Bank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Fifth Third Bank deposit account customers can benefit from fee waivers for up to 90 days on a range of consumer products and services. Customers can also call 1-800-972-3030 from 8 a.m. to 6 p.m. EST Monday through Friday and 10 a.m. to 4 p.m. EST Saturday (closed on Sundays) for assistance.

All Fifth Third Bank branches are available via drive-thru service or by appointment only. You can use the bank’s branch and ATM locator to check your local branch’s status or find the nearest ATM. For most other services, like checking balances or ACH transfers, you can use the bank’s website or mobile app.

Goldman Sachs Bank USA

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Customers of Marcus by Goldman Sachs can make penalty-free withdrawals from regular CDs at this time, as a direct response to COVID-19. You can do so by calling 1-855-730-7283. Marcus contact centers are operating virtually, with temporary hours of 9 a.m. to 6 p.m. ET Monday through Friday and 9 a.m. to 6 p.m. ET on Saturday and Sunday.

You can still access your Marcus accounts online. Apple device users can also benefit from the Marcus mobile app.

KeyBank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Select KeyBank customers “may be eligible for immediate help,”which can include “waiving certain service charges on KeyBank checking and savings accounts.”

KeyBank has closed all branch lobbies and select branches altogether. Those that remain open are operating via their drive-thru services. If you need to meet with a banker for select services or to access your safe deposit box, you can schedule an appointment to do so. Of course, you can always access your accounts online and through KeyBank’s mobile app. You can also call KeyBank’s 24/7 customer service line at 1-800-539-2968, though be aware that there are currently longer hold times than usual.

The KeyBank Foundation has also made an initial $1 million commitment to “support vulnerable individuals, small businesses and neighborhoods.”

Navy Federal Credit Union

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

During this time, Navy Federal Credit Union members can withdraw from certificates before maturity without penalty; get free overnight shipping on cashier’s checks and debit cards; deposit up to $50,000 per day via mobile deposit; and withdraw up to $1,000 per day from non-Navy Federal ATMs (the $1,000 daily limit on Navy Federal ATMs remains).

Members can also take advantage of the credit union’s OOPS overdraft protection for all checking accounts, which offers no fee on overdraft transactions of less than $5 and caps overdraft charges at three per day. Members with OOPS can request a refund for the $20 overdraft fee charged and for non-sufficient fund (NSF) fees by sending a secure message through your account.

Several Navy Federal branches have temporarily closed, while others currently have reduced hours. You can check the status of your local branch here or on the Navy Federal Mobile app, where you can also find accessible ATMs.

PenFed Credit Union

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

PenFed Credit Union is not offering specific relief measures for its deposit account members in response to the COVID-19 crisis.

Select PenFed financial centers are temporarily closed, while others are operating on adjusted hours. Saturday drive-thru service at open financial centers only includes everyday financial transactions like cash withdrawals and loan payments.

PenFed encourages customers to contact their local branch for information about updated hours and services, which you can also check online on the bank’s locations page and COVID-19 information page. You also can access your accounts for several services online and on the PenFed mobile app.

PNC Bank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

PNC Bankcustomers who are experiencing financial hardship as a result of COVID-19 should call 1-888-762-2265, which is available 7 a.m. to 5 p.m. ET Monday through Friday and 8 a.m. to 5 p.m. ET on Saturday and Sunday. Virtual Wallet customers may call 1-800-352-2255, available during the same hours.

If you are eligible for assistance, a PNC representative will discuss your options with you, which include waiving or refunding fees on deposit accounts (and other products). Qualified customers can also take out an emergency hardship loan “at a low rate.” PNC did not make it clear how it determines eligibility for assistance, but it stressed that customers should call for help.

Select PNC branches are closed, while others remain open with limited hours and access, with some are operating via drive-up window only. You can use PNC’s branch locator to check the status of a branch and to find a branch that offers essential appointments, made available for safe deposit box access, loan closings or other banking services that you cannot make otherwise. PNC is also still widely accessible via online, mobile and voice banking.

State Employees’ Credit Union

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

State Employees’ Credit Uniondoes not have specific relief plans in place for its deposit account customers, although its loan customers can seek assistance in light of the coronavirus pandemic. Members can contact a representative through a secure message when logged into their account, by calling your local branch or by calling 24/7 Member Services at 888-732-8562 to “discuss how they can help.” Note that Member Services is experiencing high call volumes between 10 a.m. and 8 p.m. every day.

SECU branches have pivoted to drive-thru service only for most banking services. You can call to schedule an in-person appointment if you need to access a safe deposit box, submit tax return information or discuss loans. Otherwise, you can use the credit union’s website, mobile app, CashPoints ATMs, automated voice response service and 24/7 Member Services Support Center.

TD Bank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

TD Bank encourages customers affected by COVID-19 to call 1-888-751-9000 to see how the bank can support you as it says it “may be able to provide some financial relief.” Of course, wait times are uncharacteristically long at this time.

Assistance options offered by TD Bank will depend on your situation and request but may include fee refunds, early, penalty-free access to CDs and payment extensions. The bank’s customer assistance offers continue to evolve as well, according to a bank representative.

Most TD Bank branches are temporarily closed or operating via drive-thru only. At TD Bank drive-thrus, you can make deposits, withdrawals and payments; cash checks; get a bank check or money order; and make business deposits or coin orders. Branches with open lobbies are available by appointment only. TD Bank branch reduced hours are 9:30 a.m. to 4 p.m. Monday through Friday via drive-thru, 9:30 a.m. to 1 p.m. Saturdays unless normally closed and closed on Sundays (all times are local). You can check the status of branches by state on TD Bank’s COVID-19 updates page.

TD Bank ATMs are still accessible, as is its website and banking app.

TIAA Bank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

As part of the bank’s coronavirus relief response, TIAA Bank deposit account customers can benefit from waived fees for wire transfers, ATM transactions and insufficient funds through the month of May.TIAA has also increased debit and cash withdrawal limits.

TIAA Bank financial centers have all moved to drive-thru tellers only. Those that don’t have a drive-thru window will see clients through appointment only. You can set up an appointment by calling your local financial center.

You may also easily manage your TIAA Bank accounts online and through the TIAA mobile app. To speak with a representative, banking customers may call 1-888-882-3837 from 8 a.m. to 11 p.m. EST, although wait times are abnormally long.

Truist (formerly BB&T and SunTrust)

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Truist, the result of a recent merger between BB&T and SunTrust, does not offer any relief related to its deposit accounts.

For further assistance, Truist encourages heritage BB&T clients to call 1-800-226-5228 and heritage SunTrust clients to call 1-877-820-2103. Watch out for long wait times, however, which customers have reported on social media.

Local BB&T and SunTrust branch hours and services are temporarily moving to drive-thru teller services only, appointment-only in-person visits and select branch closures. Customers still have 24/7 access to ATMs as well as online, mobile and telephone banking.

Truist has also established a $25 million Truist Cares initiative, which will provide funding to the CDC Foundation and Johns Hopkins Medicine; local United Way organizations; and grants to Truist’s community partners.

U.S. Bank

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

U.S. Bank has suspended fees related to excessive withdrawals. Deposits customers who have been financially affected by COVID-19 should call the bank at 1-888-287-7817 for assistance.

U.S. Bank branch operations are temporarily reduced, and the bank encourages customers to use drive-up windows instead of going inside a branch. You can check your local branch’s hours and status online. Otherwise, you can still access your U.S. Bank accounts on the bank’s mobile app, by phone or on its website.

Wells Fargo

  • Waives ATM fees
  • Waives overdraft/NSF fees
  • Waives excessive transaction fees
  • Waives early CD withdrawal penalty

Wells Fargo has said it will offer fee waivers for customers who contact the company. On a larger scale, the Wells Fargo Foundation has pledged up to $6.25 million in donations “to support domestic and global response to the COVID-19 and to aid public health relief efforts.” This includes funding “at the local level,” as well as for the national CDC and the International Medical Corps.

Select Wells Fargo locations are temporarily closed, while the branches that remain open have temporarily reduced hours. You can check the status of a Wells Fargo branch here. If you need a service that can only be completed in a branch, you can make an appointment. Wells Fargo call centers still remain open, though they are experiencing higher-than-normal call volume and longer wait times.

You can also access your accounts online and on the Wells Fargo Mobile app, where you can deposit checks, move money and more. Wells Fargo also reminds customers that they can use contactless cards or digital wallets for payments.

Additional bank and federal advisories for customers

The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association (NCUA) have temporarily extended unlimited insurance. Thanks to the CARES Act, your bank and credit union deposits are wholly insured through Dec. 31, 2020. Typically, an individual is covered up to $250,000 per account type, with increased FDIC insurance for joint ownership or beneficiaries. This temporary extension means you don’t have to worry about losing any of your money in a checking, savings, CD or money market account in the event of a bank or credit union failure.

The Federal Reserve has temporarily amended Regulation D to allow for more than six withdrawals from savings accounts. One way that Regulation D differentiates savings accounts from checking accounts is by limiting savings accounts to six “convenient” transfers per month. This includes pre-authorized and automatic transfers; telephone transfers; and withdrawals and transfers made by check, debit card or a similar method. For now, you don’t have to worry about this limitation.

Less “convenient” transfers which are not included in that otherwise limited category are those made in person at the bank, by mail, at an ATM or over the phone when you receive the withdrawal via a check in the mail.

Typically, going over the “convenient” transfers limit would result in an excessive transaction fee charged by the bank. With the Fed’s latest change, your bank may also waive their excessive transaction fees as further COVID-19 relief.

Many institutions are warning customers about keeping their information and money safe from fraudsters. Unfortunately, scams and phishing attempts are cropping up to take advantage of this crisis. Be wary of phone calls, emails and texts from suspicious senders who ask for personal or account information, and avoid clicking on links in emails and texts. When in doubt, head to your institution’s official website to verify your bank’s contact information, or log into your account to access its secure messaging system.

Government relief and the Coronavirus Aid, Relief, and Economic Security (CARES) Act

American taxpayers and business owners may also get some relief from the U.S. government’s $2 trillion financial relief package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in late March.
Find out how you can benefit from the relief package below.

One-time stimulus checks

Taxpayers’ long-awaited direct payments, or recovery rebates, will be determined by their most recent tax return. For many, this will be your 2019 tax return, since we have yet to file taxes for 2020. If you have not yet filed your 2019 tax return, the government will turn to your 2018 return instead.

How much you’ll get: For individuals, the plan will provide one-time direct payments of $1,200 ($2,400 for joint returns) to those with an annual income of $75,000 or less. Payments will decrease incrementally for those who made more than $75,000 and will stop altogether for individuals who earned more than $99,000. Individuals will also receive an additional $500 per child. You can use our stimulus check calculator to determine your payment amount.

What to do to get your stimulus check: For most taxpayers, there’s no need to sign up. All you need is a valid Social Security number to receive these relief rebates. Depending on what you requested on your tax return, the IRS will send the payment either via direct deposit or a paper check.

  • If you receive Social Security retirement, Social Security Disability Insurance or Railroad Retirement benefits, the IRS will use the information on your 1099 Social Security forms (Form SSA-1099 or Form RRB-1099) to determine your payments. Individuals who qualify with these forms will only receive additional payments for dependents at this time if they registered their dependents via the IRS’ Non-Filers: Enter Payment Info tool by April 22, 2020. Otherwise, the additional $500 payment per eligible dependent will be paid in association with your tax filing for tax year 2020.
  • Other eligible U.S. citizens or permanent residents may use the IRS’ Non-Filers: Enter Payment Info tool. You can use this tool to submit your most recent banking information to the IRS for faster payment. You are eligible to use this tool if you had a gross income of $12,200 or less ($24,400 for married couples) for 2019 and were not required to file, nor planned to file, a federal income tax return for 2019. You will have to submit your current mailing address, an email address and valid Social Security number, in addition to other personal and identifying information.
  • Supplemental Security Income (SSI) recipients and veterans who receive veterans disability compensation, pension or survivor benefits from the Department of Veterans Affairs, and who did not file a tax return for either 2018 or 2019, may also use the Non-Filers: Enter Payment Info tool, as these groups are not yet automatically eligible for economic impact payments.

When the stimulus checks will arrive: The IRS began sending out payments the week of April 13, 2020. You can expect your payment to come sooner if you have direct deposit set up on your tax return or submitted your bank account information via the Non-Filers: Enter Payment Info tool.

You can track your payment with the IRS Get My Payment tool. This tool indicates the status of your payment, including the date your payment is scheduled to be direct deposited or mailed. Get My Payment will also provide eligible individuals a chance to submit their bank account information for direct deposit. If your check has already been scheduled for delivery, this feature will not work, so it’s best to take advantage of it as soon as possible

Fastest ways to get your stimulus check: The fastest way to get your stimulus check is via direct deposit to your bank account from the IRS. If your address or bank account information has changed since 2018, file your 2019 tax return as soon as possible, if you haven’t already.

Taxpayers with prepaid accounts can also receive the government COVID-19 stimulus checks, thanks to the Consumer Financial Protection Bureau (CFPB) relaxing rules around the Electronic Fund Transfer Act (EFTA), which typically prohibits individuals from opening new accounts to receive government benefits. So if you have a prepaid account, you may want to provide the IRS with your account information via the Non-Filers: Enter Payment Info tool as soon as possible so you can receive your stimulus payment faster.

What to know about taxes and stimulus checks: These recovery rebates are considered advanced tax credits for 2020 and should not be taxed for most. Since the payment amounts are determined based on your previous tax returns, however, the payments could be subject to adjustment if you earned more or less this year compared to prior years.

For example, if you received too large of a rebate proportionate to your most recent income, you could end up owing back the excess. However, it is so far expected that taxpayers will not have to return or pay tax on any portion of these rebates, regardless of income changes. If you receive a payment that is too low, you also may be able to receive a tax credit from your 2020 taxes to make up the difference.

Expanded unemployment benefits

For starters, individuals who have found themselves unable to work as a result of COVID-19, including those who are sick, quarantined or taking care of family members, will be able to collect unemployment, extending those benefits beyond those who were fired or laid off.

The CARES Act has also included self-employed individuals under this provision, meaning freelancers, gig workers and contractors may also collect unemployment during this time. Also included are people seeking part-time work; workers whose unemployment benefits have run out already; clergy and employees of religious organizations; and individuals whose work history would not typically be sufficient.

The stimulus bill will also add $600 on top of existing unemployment benefits (currently averaging about $300 a week) for four months and extend unemployment insurance by 13 weeks. The bill will also ensure that workers maintain their full salaries if they lose their job due to the coronavirus pandemic.

This additional funding will come from the federal government rather than from states and employers, who typically fund unemployment benefits. Unemployment benefits are still taxable under current law, which the stimulus bill does not account for. So if you are able, you may want to elect for tax withholding now, so you don’t get hit with a big bill at tax time.

How to file for unemployment: Unemployment insurance is done by state, so you will file for unemployment in the state where you last worked. If you worked in multiple states, you can apply in any one of those states. You can check your state’s benefits and eligibility requirements here.

The fastest and safest way to apply for unemployment at this time is via your state’s unemployment website or over the phone. However, given that millions of Americans have recently found themselves unemployed, you may face unusually long wait times when contacting unemployment offices. Perhaps visit your state’s website during off hours.

When you file for unemployment, you’ll have to provide your personal information, including your name, contact information, Social Security number and bank account information, if you have one, for direct deposits. You will also have to provide information about your last place of employment, including your past employer’s name and contact information, the last date you worked, the reason you’re not working anymore and your previous earnings.

Some states may require you to “certify for benefits” on a weekly or bi-weekly basis, which requires you to prove your continued eligibility for unemployment benefits. This often includes showing that you are willing and able to work and that you are actively looking for employment. Some states may waive this requirement during this time.

Eased penalties around retirement account withdrawals

The bill also allows those affected by COVID-19 to withdraw up to $100,000 from qualified retirement accounts, including your 401(k) and IRAs, without facing the 10% early withdrawal penalty that typically applies when you make withdrawals when you are under the age of 59 ½. You will still have to pay income taxes on your withdrawals, though these taxes will now be due over the course of three years instead of immediately. Additionally, the bill waives required minimum distributions (RMDs) for select retirement plans for this year.

Qualified individuals include those who are diagnosed with COVID-19 or have a spouse or dependent who has been diagnosed with COVID-19, as well as those who have been laid off, quarantined, furloughed or faced reduced hours due to the pandemic. This applies through Dec. 31, 2020.

Even though the bill allows it, withdrawing from your retirement accounts before you’ve actually hit retirement is generally not the best plan — especially if you’re already close to retiring. By doing so, you run the high risk of hurting the nest egg that you’ve worked hard to build for retirement. Still, this may be the only source of money available to many right now.

Small business relief

The stimulus plan includes $425 billion for the Federal Reserve to leverage for emergency loans to distressed companies and $75 billion for industry-specific loans. Despite previous claims from President Trump that he alone would choose which businesses received aid, this lending system will fall under oversight by an inspector general and a congressionally-appointed panel.

The spending package also provides $350 billion that will go toward lending programs for small businesses, but only those that keep their payrolls steady through the crisis. There is also a reward for small businesses that keep their workers in the form of federally-guaranteed loans that will be forgiven if the employer continues to pay its workers throughout this time of crisis.

Additionally, the plan allocates $130 billion for hospitals and $150 billion for state and local governments.

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Banking

What Is a Cash Management Account?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Actions have consequences. Staying up too late will turn you into a zombie at work the next morning, eating ice cream for breakfast will force you to buy new jeans — and placing your money in a conventional checking or savings account could yield a piddling amount of interest.

The internet hasn’t found a way to circumvent the biological necessities of sleep and a healthy diet — yet — but it can empower banks and financial institutions to offer accounts with APYs climbing well above 2.00% in some cases, all while providing the ease-of-access and convenience of a checking account. In the evolving world of online banking, these are usually called cash management accounts, and you need to know more about them.

You may have read about cash management accounts. They go by a variety of names: hybrid checking, hybrid accounts, cash management vehicles. Like many consumer financial products, readers may be a bit unclear about how these accounts actually work — and to start, note that they are very different than the “cash management accounts” offered by certain online stock brokerages.

“We’re trying not to think like traditional bankers, with the usual boundaries of how an account should be used,” said David Hijirida, CEO of Simple, which offers its own cash management account. “What we’ve found is that most customers use our accounts in a way that combines both checking and savings behaviors.”

Let’s get to the heart of the matter by defining what these new accounts are and whether they’re right for you and your money.

What is a cash management account?

Whatever the name, a cash management account combines the high interest rates of a savings account or certificate of deposit with the accessibility of a checking account.

With some of the accounts reviewed below — like Aspiration’s Spend and Save and Simple’s Checking and Protected Goals Accounts — the product actually consists of a checking account (which typically earns little to no interest) linked with a savings account (which earns a pretty decent APY) and features instantaneous, unlimited transactions between the two. Others — like Radius’ Hybrid Checking — comprise a single checking account earning a high APY, minus all the usual requirements typical of a traditional high-yield checking account.

While cash management accounts consisting of both a checking and savings account earn some of the highest APYs, you need to watch out that you don’t keep the majority of your funds in the checking or spending portion — where it earns minimal interest. Because transferring funds between the checking and saving portions happens instantly and doesn’t come with any limits, this is an easy mistake to avoid.

The boundary between “cash management account” and “high-yield checking” account can be hazy, but they share the following characteristics that place them in the “cash management” category.

  • Zero fees: One of the more attractive facets of cash management accounts is that most have no monthly maintenance fees (or only charge a small amount). This helps differentiate them from high-yield checking accounts, many of which require users to meet multiple specific requirements each month or pay maintenance fees in order to earn the high APY.
  • A higher APY than your typical checking account: According to DepositAccounts.com (like MagnifyMoney, it too is owned by LendingTree), the average APY a checking account earns is 0.147%. Traditionally that’s been seen as the trade off depositors make with banks in order to have easy, everyday access to their funds. The cash management accounts we review here represent true hybrid accounts that combine the liquidity of checking accounts with the high interest rates of savings accounts. All of them offer a much higher APY than the average checking account and, in many cases, higher than the interest earned in many savings accounts.
  • They’re online accounts, mostly: The institutions offering cash management accounts mostly exist as ones and zeros on the web. Some of these companies, like Aspiration, aren’t even banks themselves, but have partnered with traditional banks to provide customers with their services.

How do cash management accounts earn so much interest?

While the particulars vary from account to account, the principal underlying cash management account combines a traditional checking and savings account in one instrument — you deposit money with a bank or institution, where it earns interest. The financial institution then takes a cut of that interest in order to make money, and passes the rest on to you (which is reflected in the interest that particular account earns).

Because banks prefer customers to deposit as much money as possible for an extended period, they usually give accounts and products that limit customers’ ability to withdraw their cash higher interest rates in order to incentivize depositors into using those products.

Average Checking Account APYAverage Savings Account APYAverage 1 Year CD
APY
Average 5 Year CD
APY
0.147%0.214%0.734%1.237%

As you can see from the chart above — this data comes from DepositAccounts.com — the more liquid your account, the less interest it earns for you. Checking accounts, which provide almost unlimited access to your money, earn the lowest APY on average. Certificates of deposit with a five-year term, which usually come with a steep financial penalty if you withdraw the money before the term is up, provide the highest interest, on average.

So how do the companies offering cash management accounts bypass this norm to offer customers high interest rates on accounts with little to no restrictions on withdrawals? A big part of the answer is their low overhead, thanks to their online-only operations.

Megabanks like Chase employ thousands and maintain a sprawling network of physical locations, while an online-only institution like Aspiration, offering the Spend and Save cash management account, might have only a few dozen employees on its payroll.

“Because we’re online-only, it helps us pass on those kinds of savings to our customers,” said Andrei Cherny, CEO of Aspiration.

Where does my money go when I deposit it into a cash management account?

Since many of the institutions offering cash management accounts lack the extensive infrastructure of traditional banks, you may be wondering where your money is actually deposited with these accounts.

The answer is that they partner with a bank (or a series of banks) to manage your funds. At the end of the business day, the money in your cash management account is swept into one of these participating bank’s accounts, where it enjoys the normal protections provided by FDIC accounts.

This information should all be disclosed to you when you open a cash management account, and if it’s not you should hesitate before placing a large amount of money in the account.

“As with anything, read the fine print,” said Jonathan Chapman, CFP at WJ Interests based in Sugar Land, Texas. “Look under the hood to see what banks they partner with to ensure they are working with quality institutions.”

Customers should also keep an eye on the individual FDIC-insured accounts where your money is swept at the end of the day. Make sure none of the balances exceed the insurance’s limit ($250,000) — otherwise, the portion of your balance that’s greater than $250,000 is at risk of being uninsured.

The potential pitfalls of cash management accounts

The high interest rates offered by these accounts make them attractive to customers who want their money to grow at a decent rate while still remaining accessible, but they’re not for everyone. Because most of these hybrid accounts are offered by online-only banks or institutions, customers have to feel comfortable banking with a company that may lack decades of history — especially if they’re already accustomed to doing business with another bank.

“As an advisor, my most difficult work is to get people to follow through on my recommendations,” said Jayson Owens, CFP at Bright Road Wealth Management based out of Anchorage, Alaska. “To accomplish this, I rarely recommend changes to a primary checking account. The cost in time typically outweighs the benefit of the change.”

Another related concern customers may have about these cash management accounts is if the companies offering them will stick around for the long haul. “Clients may not lose money but the company may get acquired or shuts down which would cause unnecessary hardship,” said
Deva Panambur, CFA and CFP at Sarsi, a wealth management company based in West New York, N.J.

While you’re not going to be able to waltz into the CEO’s office and demand a look at his five-year plan, you should take into account your gut reaction to how a company offering a cash management account presents itself and whether it has a viable shot at longevity.

The best cash management accounts

Account nameAPY earnedMinimum balanceMonthly Maintenance Fee
Simple Account1.40%$0.01$0
Betterment Cash Reserve and Checking0.40%$0$0
Wealthfront Cash Account*0.35% APY on the entire balance$1$0
SoFi Money0.20% APY on the entire balance$1$0
Radius Rewards Checking Account0.15% APY on balances of $100,000 and greater; 0.10% APY on balances between $2,500 and $99,999.99$100,000 to earn the highest APY; $2,500 to earn 0.10% APY$0
Aspiration Spend and Save1.00% APY on the entire balance$1,000 monthly deposit to earn 1.00% APY or $10,000 Save account balance
$0

*These cash management accounts currently don’t have a way for you to spend money directly from the account (such as a debit card or check) and require you to transfer money from the cash account to a third-party account before spending.

Simple Account

Simple was created out of frustration with the banking industry. According to the founders, they were confounded by the complexities of certain bank accounts; their solution was to offer a no fee bank account that earns interest and helps you budget your money “in one simple app.”

What makes this bank account stand apart from other online checking accounts? Well, for starters, it’s a checking account that doesn’t have any fees, not even if you use an international ATM (however, a fee may still be charged by the ATM owner). With this cash management account, you can earn 1.40% APY on all balances in your Protected Goals account, which is basically a savings account that lives within your larger Simple account, where you can instantly transfer money in and out of as many times as you want without any penalty.

SEE DETAILS Secured

on Simple’s secure website

Betterment Cash Reserve and Checking

Betterment intends for its Cash Reserve and Checking accounts to work in tandem, and offers an APY of  0.40% on funds in the Cash Reserve account.

Because money in the Cash Reserve account is held by several program banks, customers enjoy FDIC protection up to $1 million. There’s no limit to the amount of times you can transfer money in and out of your Cash Reserve account (unlike a traditional savings account at a bank) but it does take 1-2 business days to for Betterment to process these transfers.

SEE DETAILS Secured

on Betterment’s secure website

FDIC Insured

Wealthfront Cash Account

This robo-advisor offers savers a cash management account that earns 0.35% APY and doesn’t require you to open an investment account. Because Wealthfront sweeps the money you deposit in the cash account into several partner bank accounts, your money is FDIC insured up to $1 million, a selling point for those wanting large balances to receive the maximum protection. Currently Wealthfront doesn’t offer a debit card to allow you to directly spend the money with a merchant (though the company promises its working on it), but you can transfer funds from the cash account to a third-party account or an internal Wealthfront investment account free of charge.

SEE DETAILS Secured

on Wealthfront’s secure website

FDIC Insured

SoFi Money

Though it’s probably better known for its mortgages and student loans, this online-only investment firm has staked a claim in consumer banking by offering its Money account, which offers a generous APY.

SoFi doesn’t require depositors to maintain a minimum balance in this account in order to earn that high interest rate, one of the few accounts in the market that doesn’t place a barrier between the customer and the high APY. Account holders also get additional goodies like free paper checks upon request and unlimited reimbursement of ATM fees.

SEE DETAILS Secured

on SoFi’s secure website

Radius Rewards Checking Account

Radius Bank is a community bank headquartered in Boston. The Radius Rewards Checking account is free, as long as you open the account with the required deposit of $100.

Because the Rewards account offers a much-higher than average interest rate for a checking account without saddling the customer with a laundry list of requirements — like a number of debit transactions required each month — Radius’s account joins the list of best cash management accounts.

SEE DETAILS Secured

on Radius Bank’s secure website

Member FDIC

Aspiration Spend and Save Account

Aspiration aims to transform personal banking from a chore customers tolerate to an act of social responsibility — at least according to their marketing campaign, which heavily emphasizes the fact that customers only pay whatever they wish in fees, with 10 percent of that money going to charity. But even depositors who don’t buy into Aspiration’s brand ethos will likely find themselves intrigued by the company’s Spend and Save account, which promises a 1.00% APY on what is effectively a checking account.

Similar to Simple, Aspiration has packaged together a savings account and a checking account into a single consumer product allowing users to move their money between both portions instantly and as many times as they wish. Users should be careful not to leave the majority of their funds in the checking portion, which owns zero APY. Instead most of the money should live in the savings account, where it earns the 1.00% APY the company advertises so prominently.

You can move your money between both parts of the Spend and Save account instantly, so having most of it in the savings portion shouldn’t slow you down during a shopping spree; however, it’s important to note in case you get careless and leave a big chunk of change in the spending portion, where it earns no interest.

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on Aspiration’s secure website

 

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