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Everything You Need to Know about Spousal IRAs

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

A spousal IRA is an investment strategy used by married couples to save for retirement. There is no separate type of individual retirement account called a “spousal IRA” — rather, it’s just a traditional IRA for a married person who isn’t earning an income. IRS rules allow spouses who aren’t earning income, for whatever reason, to still use the tax advantages of saving and investing money in an IRA to accumulate a nest egg for retirement.

What is a spousal IRA?

The IRS requires individuals to report annual income in order to fund an IRA — with the exception of a spouse who isn’t earning an income, but is married to someone who is. If both partners in the marriage file taxes jointly, the IRS lets each partner have their own IRA. Married couples who file taxes separately are not eligible for the spousal IRAs approach.

According to Janice M. Cackowski, a financial advisor with providence Wealth Partners in Ohio, the IRS looks at married couples who file jointly as one entity, and their combined income as one figure, so spousal IRAs allow them to put away twice as much.

“Spousal IRAs are terrific tools when one spouse is employed and the other is not,” said Cackowski. “It allows the spouse who is earning wages to deposit them an IRA for the benefit of the non-working spouse, essentially allowing each spouse to maximize their retirement savings.”

Basic spousal IRA rules

  • The tax filing status of the couple must be “married filing jointly”
  • The married couple does not co-own a spousal IRA — it is owned by and held in the name of the non-working spouse
  • Spousal IRA can be a Traditional IRA or a Roth IRA
  • There is no longer an age limit for making contributions to a Traditional IRA, so you may keep adding money after age 70 ½, as has always been the case with a Roth IRA

Like any other IRA, married people making use of a spousal IRA strategy contribute funds to their separate accounts and invest the funds in stocks, bonds, CDs and other assets. Interest accumulates over the years, and the account grows either tax-free or tax-deferred (more on this in a bit).

For example, if you contribute $6,000 a year to your IRA starting at age 30 until you retire at age 65, the sum would grow to more than $700,000, assuming a 6% annual rate of return. This figure doesn’t account for taxes (so it’s not entirely exact), but it does show how the power of compound interest can work in your favor over time.

What are your spousal IRAs options?

Your spousal IRA can be either a Traditional IRA or a Roth IRA. The rules and contribution limits for spousal IRAs are no different than conventional versions of either account. Remember, the difference between a Roth IRA and a Traditional IRA comes down to when you can reap the tax benefits of each option, and Traditional IRAs may provide tax deduction benefits.

  • Traditional IRA: Contributions to a Traditional IRA are made before you pay income tax. As such, you end up paying income taxes on all withdrawals — principal and interest earned — when you withdraw funds in retirement.
  • Roth IRA: Contributions to a Roth IRA are made after you pay income taxes. Since you’ve already paid taxes upfront, money you withdraw in retirement is tax free.

Which should you choose? In general, if you’re in a lower tax bracket now than you expect to be when you retire, then a Roth IRA may be more beneficial, as you may save money on taxes down the road. This decision is unique in each situation.

Spousal IRA contribution and income limits

For 2020, the annual contribution limits for both Traditional IRAs and Roth IRAs is $6,000, or $7,000 if you’re 50 or older. This is the core benefit of a spousal IRA: A married couple can potentially sock away a total of $12,000 into their IRAs.

There is no income threshold for contributing to a traditional IRA, while the limit for contributing to Roth IRAs is $206,000 for married couples filing jointly. Also, In addition, for both Roth IRAs and Traditional IRAs, the married couple must have taxable income that is equal to or greater than the total amount contributed to their IRAs.

Spousal IRA tax deductions

Couples can deduct their contributions to a Traditional IRA from their taxes, depending on two factors. The income tax deduction is reduced or eliminated entirely depending on the couple’s total income, or the earning spouse’s participation in an employer-sponsored retirement plan.

If the spouse who works is covered by their employer’s retirement plan, the Traditional IRA income tax deduction is phased out when the couple’s income falls between $104,000 and $124,000. Incomes above $124,000 get no tax deduction.

However, if the spouse does not participate in an employer-sponsored retirement plan, the deduction phases out at an income level of $196,000, and is eliminated after income hits $206,000. There are also tax credits available — the Saver’s Credit — for married couples filing jointly who earn less than $65,000 a year.

Spousal IRA withdrawals

Because IRA funds are intended for use in retirement, withdrawing them before that time often comes with a penalty. For traditional IRAs, there’s a 10% penalty if you withdraw funds before age 59 ½, and you also must pay taxes on the money you withdraw. For Roth IRAs, you can withdraw the funds you contributed at any time penalty free, since you already paid taxes on them up front, but you’ll pay a 10% penalty on any earnings if you with withdraw them sooner than five years after the account was opened or before age 59 ½ (whichever is longer).

For both traditional and Roth IRAs, there are some exceptions to early withdrawal penalties for things including death, disabilities and a first-time home purchase.

Who should consider a spousal IRA?

Any family with a non-working spouse and disposal income for long-term savings that is looking to increase their retirement nest egg should consider a spousal IRA as a potential option.

According to Michelle Buonincontri, an Arizona-based certified financial planner and certified divorce financial analyst, spousal IRAs help protect the non-working spouse in the case their happily ever after doesn’t end quite so happily.

“Let’s face it, with 50% or more of first marriages ending in divorce, spousal IRAs are a great way to level the playing field by having retirement assets in the name of the spouse that does not have access to a retirement plan if a couple ever find themselves in a divorce situation,” she said.

Although retirement assets accumulated during the marriage are usually considered marital assets, Buonincontri suggested that “folks seem less emotional about letting the other spouse keep accounts titled in their own name and less tense during the marital settlement negotiation process.”

Spousal IRAs aren’t for all couples

This doesn’t mean contributing to a spousal IRA is right for every couple, however. While spousal IRAs are generally a positive investment, people need to take a hard look at their financial situation to make sure funds won’t be needed elsewhere.

Diane Pearson, a certified financial planner with Pearson Financial Planning in Pittsburgh, Penn., noted that a spousal IRA isn’t always the first move couples should make with disposable income.

She advised that couples should build their emergency fund and general savings before opting for a spousal IRA. Savers don’t want to set themselves up for additional taxes or early withdrawal tax penalties if they end up needing to pull funds out of an IRA to pay for near-term emergencies or a child’s education before age 59 1/2.

“Every situation is obviously different, but if an employer is offering the working spouse a match to a qualified retirement plan, and the individual instead decides to use their income to fund their non-working spouse’s IRA, they may be missing out on the employer’s matching contribution,” said Pearson.

How to open a spousal IRA

As we noted in the introduction, a spousal IRA is a strategy, not a distinct type of individual retirement account. Whether you choose to set up your spousal IRA as a Traditional IRA or a Roth IRA, you can do so through most banks, brokerage and wealth management firms, as well as robo-advisors.

For more help determining which might be best for your IRA needs, visit our list of the best IRA account providers, and the best robo-advisors.

How hands-on you want to be when it comes to managing your IRA will help you decide which route to go. While some providers will do all the work for you, you’ll pay for that help in the form of management fees, other brokers give you complete control over your portfolio and you save on fees.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Julie Ryan Evans
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Julie Ryan Evans is a writer at MagnifyMoney. You can email Julie here

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Betterment Review 2020

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

Robo-advisor Betterment uses exchange-traded funds (ETFs) and a high degree of automation to manage your portfolio. In addition, it’s possible to speak with financial professionals to receive more tailored advice on retirement and other financial goals.

Investors most likely to benefit from Betterment include beginning investors hoping for a low barrier to entry, as well as intermediate investors who are interested in keeping a portion of their portfolio in set-it-and-forget-it accounts. Investors interested in trading individual stocks or taking a more hands-on approach aren’t likely to benefit as much from Betterment.

Betterment
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The bottom line: Betterment is great for investors looking to get started with minimum fuss — and who aren’t interested in active trading.

  • Easy to get started
  • Set up different investing goals
  • Benefit from tax optimization

Who should consider Betterment

Betterment is for investors who would like an automated approach to investing. Anyone can benefit from Betterment, but it’s especially helpful for beginner investors hoping to start growing their wealth.

Because of the low barrier to entry — there are no account minimums and you can get started with a minimum deposit of $10 — it’s possible for almost anyone to begin investing.

It’s also a great resource for intermediate investors looking to accomplish different goals with “buckets” of money. With Betterment, it’s possible to set varying levels of risk for different goals, with different asset allocations based on when you’re likely to need the money.

Finally, intermediate and advanced traders can use Betterment to build a long-term retirement portfolio, although there is no active trading. Betterment offers a place for assets to grow over longer periods at a pace that is likely to track the market as a whole.

Consider your goals and what you hope to accomplish with your investment portfolio. While Betterment can potentially be a good choice for anyone who keeps a portion of their portfolio in long-term assets, it’s not ideal for those who prefer to actively manage their portfolios or engage in active trading.

Betterment fees and features

Amount minimum to open account
  • $0
Management fees
  • 0.25% for Digital offering (no minimum account balance)
  • 0.40% for Premium offering ($100,000 minimum account balance)
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $0 full account transfer fee
  • $0 partial account transfer fee
  • $0 inactivity fee
Current promotions

Three months free for new customers who are referred by an existing Betterment account holder

Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • SEP IRA
  • Trust
Portfolio
  • 12 asset classes represented in ETF portfolio
Automatic rebalancing
Tax loss harvesting
Offers fractional shares
Ease of use
Mobile appiOS, Android
Customer supportPhone, Email

Betterment management fees

Betterment’s pricing starts with a 0.25% management fee for the basic Digital account. This pricing is in line with other robo-advisors like Wealthfront, which also charges 0.25%.

Balances above $100,000 earn Betterment’s Premium account status, featuring unlimited access to personalized advice for a management fee of 0.40%. This isn’t out of line with other robo-advisors: Wealthsimple charges 0.40% for account balances above $100,000. Wealthfront, however, maintains the 0.25% management fee, no matter the size of your account. Once your balance reaches $2 million, your fee drops to 0.15%.

In addition to regular management fees, it’s also important to note that you’ll pay expense ratios on the ETFs Betterment selects on your behalf. Betterment’s recommended portfolios feature expense ratios of 0.07% to 0.15%. According to Betterment, this is much lower than the industry average.

Finally, there are additional fees if you want access to specialized financial planning. If you have $100,000 or more invested with Betterment, you get access to these services as part of your annual management fee. However, if your balance is lower, you pay a flat fee for financial advice ranging between $199 and $299 per advisory session.

Betterment portfolio options and portfolio management

Betterment chooses an investment portfolio for you based on your goals and time horizon. The core portfolio includes stock and bond ETFs allocated in a way that helps you reach your goals. It’s also possible to tweak your asset allocation in your account.

In addition, Betterment offers different portfolio options based on specific goals and targets. Here are some of the additional choices available with Betterment:

  • Socially Responsible Investing (SRI): This portfolio focuses on reducing exposure to companies that have a negative social impact. The expense ratio is a little higher with these portfolios, around 0.14% to 0.22%, depending on the allocation within the portfolio.
  • BlackRock Target Income Portfolio: Aimed at retirees, this portfolio is designed to provide a regular income stream. The portfolio focuses on bond investments that offer dividends that can be used for income rather than focusing on principal and capital appreciation.
  • Goldman Sachs Smart Beta Portfolio: Rather than using basic asset allocation principles, this portfolio focuses on assets that possess four characteristics considered to drive performance — strong momentum, good value, low volatility and high quality. It’s possible to adjust this portfolio in 101 different ways.

With all portfolios, Betterment handles automatic rebalancing when your assets experience a certain amount of drift. For example, if market performance is resulting in an asset allocation that is too far outside the target for your portfolio, Betterment will sell and buy different assets to bring your portfolio back to its target.

Another way Betterment automatically manages your portfolio is by using tax optimization strategies. Different assets are assigned to your accounts based on their overall tax efficiency. Additionally, when certain assets lose value, Betterment will sell them automatically in an effort to offset capital gains in other areas. With the help of the Tax Loss Harvesting+ feature, rebalancing can occur daily.

Betterment financial planning features

If you want a big-picture view of your finances, Betterment’s account sync feature can be helpful. With this feature, you connect some or all of your outside accounts to Betterment, which lets you view all of your financial information in one place. The app then offers personalized recommendations for managing your money.

You have the option to speak with Betterment financial professionals about planning for specific goals and life milestones. Account holders above the $100,000 balance requirement get unlimited access to personalized advice and help by phone and email as part of the management fee.

If you don’t meet this threshold, you can pay for advice packages tailored to the goals you’re working on. Here are some of the Betterment advice packages available for a flat fee:

  • Getting Started: A 45-minute phone call with a certified financial planner (CFP) who can provide step-by-step help setting up a Betterment account that helps you maximize a variety of goals. Price: $199.
  • Financial Checkup: Get a review of your investment portfolio and how it fits into your financial situation in a 60-minute call with a Certified Financial Planner. Price: $299.
  • College Planning: Aimed at families who want help getting set up for college costs and using higher education plans. It consists of a 60-minute phone call that can help you review your choices and decide what’s best for you. Price: $299.
  • Marriage Planning: Planning to tie the knot soon? Get help as you navigate goals, priorities and merging finances in a 60-minute phone call. Price: $299.
  • Retirement Planning: Set up a 60-minute holistic review of your portfolio, current situation and more that can help you make better decisions for your retirement. Price: $299.

The Betterment Advisor Network can also help you get your own dedicated financial advisor who can help you with almost any financial need. Betterment will help match you with a professional who is likely to fit your goals and priorities.

Betterment Everyday Cash Reserve Account

Betterment offers Federal Deposit Insurance Corporation (FDIC)-insured banking options. While the checking account isn’t universally available yet, it is possible to use Everyday Cash Reserve to earn up to 1.78% APY. Additionally, there are no limits on withdrawals and no minimum balance. You also don’t have to worry about paying fees on your balance. The money in your Everyday Cash Reserve account is actually held at partner banks — it’s possible to opt out of a specific partner bank, if you wish.

In addition to providing a high-yield savings option, you can also decide to use the Two-Way Sweep feature. With this feature, Betterment automatically analyzes a connected account each day and will move excess cash from your connected account and into your savings account. If you need the money back in your main account, Betterment will sweep it from your Everyday Cash Reserve account without the need to take further action on your part.

Strengths of Betterment

Betterment is always adding new goals and features. Here are some of the most helpful features it currently offers:

  • Tax optimization: Betterment uses tax loss harvesting to help offset taxes on your gains. The company also uses its Tax-Coordinated Portfolio to give you the maximum tax benefit. Certain assets are assigned to your IRA, while others are kept in your taxable accounts.
  • Betterment Everyday: Betterment now offers FDIC-insured checking and savings accounts. While the checking product is still in the roll-out stages, it’s possible to earn up to 1.78% APY with Everyday Cash Reserve.
  • Set up different goals: One of Betterment’s most useful features is the ability to set up different goals. It’s possible to have a traditional IRA and a rollover IRA, as well as open a Roth IRA. It’s also possible to open taxable accounts for a variety of other goals. Set different asset mixes for each type of account and adjust what you add simply and easily.
  • Chance to talk to a human: Betterment offers customer service by phone in addition to email. However, you can also speak with a financial professional with packages starting at $199, depending on what you’re looking for. It’s also possible to be matched with an advisor if you meet the requirements for access to the Betterment Advisor Network.
  • Portfolio projection tools: Set goals with the help of Betterment’s projection tools and track your progress toward reaching your objectives. Betterment offers insight into whether you’re on track with your goals as well as graphs to help you visualize the potential of your portfolio.

Drawbacks of Betterment

While Betterment is a great choice for many investors, it’s not for everyone. There are some drawbacks, and no Betterment review would be complete without mentioning them.

  • No active trading: If you’re interested in choosing your own investments and actively trading, you won’t be able to do that with Betterment. While you can do a little more self-directed investing with a Premium account, the reality is that you’re mostly limited to choosing your prefered asset mix rather than picking individual investments.
  • Lack of 529 and education savings accounts (ESAs): There are no custodial accounts with Betterment, and you can’t set up a 529 or ESA to save for your child’s education. A similar robo-investing company that does offer a 529 is Wealthfront.

Is Betterment safe?

Anytime you invest, there is a chance you could lose money. Poor market conditions can always lead to a loss. However, Betterment’s use of modern portfolio theory in its asset allocation helps reduce your exposure to risk. Additionally, Betterment carries Securities Investor Protection Corporation (SIPC) insurance, protecting each of your Betterment accounts up to $500,000 in the event of a failure by the company. (Note that market losses aren’t covered by SIPC insurance.)

In addition to making sure an investment company is SIPC-insured, you also can use the Financial Industry Regulatory Authority’s BrokerCheck to find out about disclosures and actions, and search the Consumer Financial Protection Bureau’s Consumer Complaint Database. The Better Business Bureau is also a good source of information.

Final thoughts

Betterment is a great choice for beginner investors looking to get their feet wet and for long-term investors hoping to grow a retirement portfolio. For investors with more than $100,000, it can also be a decent place to keep your money if you’re looking for basic advice.

However, for active traders and those who want a little more control over their assets, Betterment might not be the best choice. Instead, it could make more sense to use platforms like E-Trade or Robinhood if you want to get involved with active trading. Stockpile is also a good choice for investors who want to buy individual stocks using fractional shares.

Overall, though, Betterment is a great choice for building wealth for the long term, including setting accounts for specific goals and using tools that help you see if you’re on track to meet your objectives.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Miranda Marquit
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Miranda Marquit is a writer at MagnifyMoney. You can email Miranda here

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Fidelity Cash Management Account Review 2020

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.

Fidelity’s cash management account gives its customers a convenient place to keep cash balances with the firm, rather than moving them back and forth between external bank accounts. Like some of the other cash management products offered by brokerages, it’s not necessarily a perfect replacement for your conventional checking account. However, customers can benefit from Fidelity’s generous unlimited ATM fee reimbursement program, even if the APY isn’t the highest available.

Fidelity Cash Management Account Pros

Fidelity Cash Management Account Cons

  • Unlimited ATM fee reimbursements
  • No monthly fees
  • No minimum balance requirement
  • FDIC insurance up to the legal limit
  • Uncompetitive APY
  • Few branch office locations

This review will take a closer look at how Fidelity’s Cash Management Account stacks up in comparison to offerings from traditional banks and other fintech competitors, to help you determine if it’s a good fit for your savings needs.

Fidelity Cash Management Account features

Fidelity markets its cash management account is marketed as a convenient way to enjoy checking-account-like features with FDIC insurance, without corresponding bank fees.

While the account is designed as a home for your idle cash when its not invested in other Fidelity products, the firm has gone the extra mile by adding ease of use and a generous ATM fee reimbursement program, which no doubt helps encourage many investors to keep their extra cash with Fidelity.

You can deposit funds to your Fidelity Cash Management Account in a number of ways. The fastest option is to transfer money from one of your existing Fidelity accounts. If you have a paper check, you can use the Fidelity app to make a remote deposit, just as you could with many online savings accounts. The account accepts direct deposits, and you can also make a one-time transfer at any time from your linked external bank account, or mail a check to Fidelity directly.

Since Fidelity is a brokerage firm, not a bank, it holds its customers’ funds at accounts with partner banks, which also provide FDIC insurance. Fidelity automatically transfers your deposits to these partner banks in increments not exceeding $245,000 to ensure that your deposit at each bank doesn’t exceed the $250,000 FDIC insurance per account. The partner banks offer a combined $1.25 million in FDIC insurance.

Fidelity Cash Management Account vs. online savings accounts

Here’s how Fidelity’s Cash Management Account compares to some of the highest-earning online savings accounts from our best online savings accounts review:

Financial Institution

APY

Minimum balance to earn APY

Fidelity

0.82%

$0.01

Vio Bank

1.95%

$100

Customers Bank

1.95%

$25,000

Barclays Bank

1.70%

$0.01

Goldman Sachs Bank USA

1.70%

$0.01

Ally Bank

1.60%

$0.01

In terms of APY, Fidelity’s cash management account doesn’t stack up to the best online savings banks. Vio Bank and Customers Bank both offer APYs in the neighborhood of 2%, far above Fidelity’s 0.82%.

That said, Fidelity’s generous unlimited ATM fee reimbursement program is better than most of its online savings competitors. Marcus by Goldman Sachs®, for example, doesn’t even offer ATM access at all, let alone have any fee reimbursement policy.

Fidelity Cash Management Account vs. robo-advisor cash management accounts

Many robo-advisor firms have also launched their own cash management accounts to help them compete with both conventional brokerages and online banks. The features and benefits can vary widely from firm to firm, but overall they tend to provide a combination of checking and savings account functionality. This includes high APYs, free ATM access, remote check deposit and FDIC insurance via partner banks.

Account name

APY

Fidelity Cash Management Account

0.82%

Wealthfront Cash Account

1.78%

Betterment Everyday Cash Reserve

1.83%

SoFi Money

1.60%

Fidelity Cash Management Account vs. Wealthfront Cash Account

The comparison of cash management accounts from Fidelity and Wealthfront comes down to ease of access versus a high interest rate. Fidelity offers a debit card and unlimited ATM fee rebates, making for a highly accessible account. Wealthfront doesn’t offer any ATM access, period. However, the Wealthfront Cash Account’s current APY is much higher than Fidelity’s APY. (Wealthfront has claimed that it does intend to offer ATM access at some future date.)

Beyond these important distinctions, Fidelity and Wealthfront share similar features. For both firms, balances in are held in accounts at multiple partner banks, which provide FDIC insurance — Fidelity’s partner banks provide a total of up to $1.25 million in FDIC coverage, while Wealthfront’s partner banks provide up to $1 million in FDIC insurance. Neither firm charges monthly fees, and both offer unlimited withdrawal and deposits.

However, Fidelity offers mobile check deposit and direct deposit funding options, while Wealthfront still only accepts deposits via ACH bank transfer, wire transfer or account transfer.

Fidelity Cash Management Account vs. Betterment Everyday Cash Reserve

The Betterment Everyday Cash Reserve pays 1.83% APY and allows unlimited withdrawals and deposits. Betterment holds your cash at accounts with multiple partner banks, which provide up to $1 million in FDIC coverage.

Unlike the Fidelity Cash Management Account, withdrawals from the Everyday Cash Reserve account are via ACH bank transfer only. Both deposits and withdrawals are generally completed within one or two business days, depending on when in the day they are set.

Betterment has been promising to launch checking features that would expand the utility of its cash management account with ATM access and related features, however it remains unclear when this component will arrive. Until that time, the Fidelity Cash Management Account remains a much more liquid option.

Fidelity Cash Management Account vs. SoFi Money

SoFi offers a full-fledged line of savings, lending and investment products. SoFi Money offers features of both checking and savings accounts in one high-yielding account, including paper checks, bill pay and ATM access.

Like the Fidelity Cash Management Account, SoFi Money offers unlimited ATM fee rebates. It’s competitive APY isn’t the best available from competing robo-advisors or online savings accounts, but it’s still higher than the APY offered by Fidelity.

Similar to Fidelity, Wealthfront and other cash management accounts, SoFi Money holds its customer’s deposits with partner banks, in multiple FDIC-insured accounts. SoFi’s six partner banks offer customers up to $1.5 million in FDIC insurance. SoFi Money charges no monthly or transaction fees.

Who should get a Fidelity Cash Management Account?

The target market for the Fidelity Cash Management Account is existing Fidelity customers. The convenience of having your money swept into FDIC-insured bank accounts, with easy access to your investment account has real value. So does the ATM access, which isn’t always found with cash management accounts from competing brokers.

However, Fidelity’s ATM reimbursement policy makes the account of added interest to anyone looking for a place to store cash in a readily accessible, interest-bearing account seeking to avoid ATM fees.

An important thing to note is that although Fidelity’s Cash Management Account APY is much higher than that paid by large, traditional banks, it pales in comparison to those paid by other cash management accounts and online savings accounts.

The bottom line is that the Fidelity Cash Management Account can be a good option for existing Fidelity customers, and it’s a definite step up from the rates paid by traditional banks. However, those seeking the highest APYs may prefer alternatives.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

John Csiszar
John Csiszar |

John Csiszar is a writer at MagnifyMoney. You can email John here