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Are you curious about how the Fidelity Cash Management Account works?
Do you want to find out more before you open an account and start using it?
Look no further. I opened an account and tried it out, so you don’t have to. In this post, we will review the Fidelity Cash Management Account to see if it’s worth it.
What is a cash management account?
A cash management account (CMA) is similar to a regular checking account.
They have all the functions that a regular checking account has, including bill pay, checks, debit cards, transfers, fee-free ATM networks, and direct deposit.
The difference between a cash management account and a checking account is that your money is usually held at a separate bank. Because the company offering the cash management account is technically not a bank, they have to use other banks to hold your funds and provide you with banking services.
On the upside, cash management accounts usually offer higher interest rates and don’t charge any fees. Your money is also FDIC insured through the partnered banks.
Introduction to Fidelity Cash Management Account
The Fidelity Cash Management Account is technically a brokerage account, but it’s meant to be used as a checking account.
It has all the functions you would expect a regular checking account to have, including direct deposit, a free debit card, bill pay, free checks, and wire transfers.
Fidelity partners with 26 other banks to provide you with FDIC insurance up to $1.25 million.
Here is the list of banks:
Fidelity partners with UMB Bank to handle all the transfers of funds. Because Fidelity is not a bank but a brokerage firm, they need an external bank to do this.
The cash management account charges no fees and has no minimum balance requirement. They also have free incoming and outgoing wire transfers, a feature that makes them stand out from other checking accounts.
One of the features that stood out to me the most is the unlimited ATM fee rebates.
You can go to any ATM in the world, and as long as they have a Visa, Plus, or Star logo on it, Fidelity will reimburse the ATM fee the same day the withdrawal posts to your account.
Keep reading, I’ll share with you my personal experience with this account.
Direct Deposit
The Fidelity Cash Management Account offers direct deposit for your paycheck.
In my experience, my direct deposits hit my account on Thursday at around noon, which is a full day before the actual payday.
If you ever choose to switch over to Fidelity’s CMA to receive your direct deposits, please note that your paycheck stub will say “UMB N.A” as the bank, and not “Fidelity.” As mentioned earlier, this is because Fidelity uses UMB Bank to process the funds.
Here is what a deposit email notification would look like:
Deposit notifications were always a bit slow. I would usually receive an email notification one day after the deposit is posted.
ATM Withdrawal (Personal Experience)
As I mentioned earlier, you can withdraw cash from any ATM in the world for free as long as it has a Visa, Plus, or Star logo on it – a huge perk for frequent travelers.
Let me share my experience withdrawing money with the Fidelity Cash Management Account Debit Card.
I withdrew money at an ATM in South Korea on October 8, 2022.
The email notifications for withdrawals are not like the deposits. They are much quicker – I got the email notification within 30 seconds of making the withdrawal. This is something I liked to see because if any fraudulent activities were to occur, I’d be notified immediately.
Here is what the email notification looked like:
The notification said, “bank teller,” but the transaction was posted to my account as “cash advance.”
From there, it took four days for the transaction to process and was finally posted on October 12. As you can see, I was reimbursed for the ATM fee on the same day.
The transaction may have taken longer to process due to the weekend.
Now, let’s talk about the exchange rate.
On the day I made the withdrawal, $1 USD equaled 1,411 Korean Won.
However, the exchange rate that I got was 1,402 Korean Won.
By doing some math, I can tell that I got 99.36% of the actual exchange rate which translates to a 0.64% “fee.” This could’ve been a fee charged by Visa, but I’m not entirely sure.
There is some debate as to whether Fidelity charges a foreign transaction fee on ATM withdrawals.
If we take a look at Fidelity’s website, we can see that they charge a 1% foreign transaction fee.
However, other sources claim that this fee only applies to debit purchases, and not ATM withdrawals.
Whatever the case is, according to my calculations, I was charged a 0.64% fee, which I think is pretty good. It’s not something that I plan on using very often, plus I don’t have to worry about any ATM fees.
Debit Card
The Fidelity Cash Management Account comes with a free debit card. Fidelity partners with PNC Bank to issue the debit card.
It took me about three weeks to get my debit card mailed to me because I live overseas. The first card was lost in the mail, so I called Fidelity, and they express-mailed me another one which arrived within one week.
From there, I activated my card online. You can choose to either activate it online or through the mobile app.
The card functions just like any other debit card.
You can request a replacement, change your pin, lock your card, set travel notices, review transactions, and close your debit card all from the Fidelity website and mobile app.
Fidelity Cash Management Account Pros
This account is great for frequent travelers. You won’t have to worry about not having enough cash because you get unlimited reimbursements from any ATM in the world.
The CMA provides up to $1.25 million in FDIC insurance because your money is held at multiple banks. That’s five times more than the average checking account.
You also get a free debit card, free checks, free incoming and outgoing wires, and instant email notifications for withdrawals.
Fidelity Cash Management Account Cons
One thing I didn’t like is how the balance history would change for every deposit and withdrawal. Because it’s technically a brokerage account, money deposited and withdrawn is included in the overall balance history.
Every time my paycheck hit the line would go up, and when I paid off my credit card the line would go down.
You can see how money deposited and withdrawn causes the balance history to fluctuate at the red arrow.
It’s no big deal if it doesn’t bother you, but I like to see how my investments are doing by referencing the balance history line, and I didn’t like how transactions in my cash management account affected it.
Another thing I didn’t like is how everything looks like a brokerage account, and not like a checking account. The Fidelity website shows funds in the account as “holdings.” Also, monthly statements are reported like a regular brokerage account.
Fidelity does separate the cash management account statement from your other accounts. So if you have a cash management account, you would get two monthly statements: one for the cash management account, and another for the rest of your brokerage accounts.
Another thing: depending on how you look at it, having your money at multiple banks could be a con. Some people prefer their money to be held at a single bank. If that’s you, I wouldn’t recommend this account. Also, you will have to call PNC Bank if you encounter any issues with your debit card, because they are the ones that issue the debit card.
As of today, Fidelity does not offer mobile app push notifications for debit card transactions. They only offer the email notifications I mentioned earlier. But this shouldn’t be a problem if you can download your email app to your phone.
The last con I want to mention is there is no way to deposit cash. For those people who frequently have to deal with cash, I recommend keeping an account open with a brick-and-mortar bank. You can use your brick-and-mortar bank to deposit the cash, then transfer it over to your Fidelity Cash Management Account.
What is the daily limit on the Fidelity debit card?
The following are daily limits on the Fidelity Cash Management debit card.
The $520 ATM withdrawal limit does seem a bit low if you suddenly need to withdraw a large amount of cash. You can also consider transferring money to an external brick-and-mortar bank and withdrawing the cash from there. Transferring money does take a day or two, so that’s another thing to consider.
| ATM | $520 |
| Purchases | $10,000 |
| Teller Advance | $2,500 |
| Cash Transfers | $2,500 |
Interest Rate
All funds in the Fidelity Cash Management Account are automatically swept into an FDIC-insured money market fund.
As of the publishing of this post, the fund has an APY of 1.58%.
Not the highest on the market, especially in a time like now when the FED has continuously hiked interest rates. Other online saving accounts provide a higher APY if that’s what you’re looking for.
What’s the difference between a cash management account and a brokerage account?
The Fidelity Cash Management account is technically a brokerage account that’s meant to be used as a checking account.
Therefore, it has additional features that a brokerage account wouldn’t have such as bill pay, a debit card, and checks.
Can you invest with a cash management account?
Yes. Since it’s a brokerage account, you can use it to invest in securities.
Conclusion
The Fidelity Cash Management Account is overall a great product. I was able to withdraw money in a foreign country and receive direct deposits without any issue whatsoever.
Although, I do prefer to have my checking account with a bank, separate from my investments.
However, if you’re looking for a one-stop shop, this account could be great for you. Fidelity also offers a credit card, which means you can have all your finances with Fidelity.
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