Once you’ve worked to save some money, it’s time to make that money work for you.
First, you’ll want to identify the right kind of savings account, one that meets your needs and helps your money accrue interest. Financial recommendation engines like Fiona make the search easy by directly comparing all of your options for you.
In this article, we review the difference between a savings account and a cash management account to help you decide which matches best with your financial situation.
Looking for an easy way to get matched with a Savings Account? Try Fiona below!
Savings accounts bear interest and are intended to help account holders save money over time. Savings accounts typically operate on a “set it and forget it” policy. Basically, you earn higher gains the longer you leave the money untouched.
A cash management account combines some aspects of a high yield savings account with aspects of a checking account.
Both savings and cash management accounts offer reasonably high APYs, some from 1.5% to 2%. APY, annual percentage yield, represents the actual yield, or gain in value, resulting from interest payments compounding throughout the year.
Similar APYs mean your money will grow at similar rates.
There is one big difference between savings and cash management accounts: accessibility.
Fiona compares online savings accounts by APY rates so you can get matched with the best option to tuck your funds away.
Savings accounts are limited to six transactions per month, which restricts the number of withdrawals you can make. Given the account type was designed to save money, this limit makes sense.
However, if you’re looking to grow money on your savings while maintaining ready access to your cash flow, then a cash management account might be the better fit.
Cash management accounts usually offer checking account features such as the ability to use a debit card or make ATM withdrawals. While in the account, your money still makes interest, but unlike a savings account, a cash management account has greater flexibility of access, so you can get the cash you need when you need it.
Still unsure if a cash management account or more traditional savings account is right for you? Fiona can help. Explore your savings options and put your money to work today.