As fintech companies challenge traditional banks, the incumbents are finding products to compete with the trendier startups.
Morgan Stanley launched a cash management account on Thursday that is aimed at helping its wealth management clients manage their money without needing to use a bank.
Called the CashPlus account, it’s a brokerage account designed to be an alternative to banking, executives said in a press release. The account is aimed at the company’s current wealth management customers, and gives them “personalized service and advice, exceptional value, enhanced protection and a digital-first experience,” said Paul Halpern, head of deposits and banking services at Morgan Stanley Private Banking Group.
What is a cash management account?
Cash management accounts are not bank accounts but are offered by nonbank financial institutions. They include various services, such as checking and savings, investment accounts and often have high interest rates.
It’s essentially one place for clients to combine their assets. It also gives wealth advisors an easy overview of their client’s cash flow.
Morgan Stanley doesn’t have a high interest rate like other similar accounts, but it does offer other features including unlimited ATM fee rebates, a debit card with no foreign transaction fees and no cash advance fees.
There are two different accounts offered by Morgan Stanley, the Premier CashPlus, which requires $2,500 in monthly deposits or $25,000 in average daily balances, and the Platinum version, which requires $5,000 in monthly deposits and $25,00 in average daily balances.
Account holders will have access to credit and identity protection monitoring through Experian. They will also have access to their account online, where they can set up alerts for account activity, transfer money via Zelle or deposit checks.
Benefit of having a cash management account
Cash management accounts are often opened because of the high interest rate offered. While Morgan Stanley doesn’t offer the same perks as other accounts, it does offer other benefits that clients might find beneficial.
Having a cash management account can streamline your finances and simplify account ownership and a great alternative to traditional accounts at a bank. They are often FDIC insurance through a third-party bank and offer the same features of a bank account, plus much more.
Still, you won’t have access to an in-person bank teller, and some banks can offer better interest rates, so make sure you research all your options.
Some of the more popular cash management accounts on the market include from fintech companies like Betterment, Wealthfront and SoFi. They have no monthly fees and interest rates of over 1.5% and little if no cash account minimum.
If you’re a current Morgan Stanley brokerage customer, the CashPlus account is probably worth looking into. But if you just want to earn higher interest on your money, it’s best to look at other options.