For years, debit cards were only available for transaction accounts, but more recently different types of accounts have begun including debit cards, including savings and some home loan accounts. One of the more recent additions to this field is the share trader’s cash management account.

A cash management account (CMA) is a type of bank account that offers higher interest rates than a regular transaction account, as well as other features such as online access, cheque facilities, a debit card and BPAY.

The trading account also registers the profits or loss incurred when the financial product is later sold (or the short sell is covered). A CMA is designed for investors or self-managed super fund (SMSF) holders who want to manage large sums of money and have easy access to their funds.

One of the benefits of using a CMA is that it helps you earn more interest on your savings while you decide where you’re going to invest. You can also simplify tax time by having a single statement that shows all your income and expenses in one place. A CMA can also potentially reduce fees by allowing you to link your account to a share trading platform or a financial adviser.

On the flip side you might find that a CMA requires a minimum balance requirement, or charge extra fees if you balance drops below a threshold. If you’re an investor or hold a SMSF this type of account may be suitable for your needs.

How to access your funds

However, by law it’s not always easy for the trader to access the capital and profits within the trading account. International financial laws are designed to make money laundering difficult, and because the share market and other forms of trading have long been attractive dodges for the criminal sort, these laws limit the ways in which the trading account can be accessed. With some online international brokerages, money can only leave the trading account in the same way in which it arrived, meaning that if a credit card funded the account, profits can only be removed by transferring them to the same credit card.

But with electronic banking it’s possible to link the trading account with another bank account, which is then designated the cash management account. The most common type of account chosen for a cash management account is a high-yielding online savings account, which keeps the money working even when it’s not being actively invested. However, any account can be used for the purpose, and many of these cash management accounts include a debit card, providing the domestic share trader with quicker, easier access to his or her winnings and capital.

As well, domestic banks are increasingly offering online brokerage services to their clients, allowing them to invest or trade without entrusting their money to a strange and possibly fraudulent financial service. For the trader whose bank is now offering brokerage services, one of their existing accounts can in many cases be used as a cash management account, providing easy access to funds through internal banking transfers and their current debit cards.

Some banks now offering brokerage services have designed an account for use as a cash management account. For example, NAB Online Trading will accept any NAB account for cash management purposes. But their designated Cash Manager account was specifically designed to suit the flexibility required by traders and investors, including unlimited access via telephone, internet, branch, or ATM banking, no ATM fees, no monthly maintenance fee, and reasonable interest calculated daily and paid monthly. As implied by the ATM banking access, the NAB Cash Manager account includes an associated debit card, sealing the account’s flexibility in meeting both legal requirements and the trader’s needs.

Things to consider with a CMA

Before you open or transfer your CMA, you should compare the following:

• – Interest rate: This is the rate of return you earn on your balance. It may vary depending on the provider, balance, term or market conditions. Generally, CMAs offer higher interest rates than other savings products, such as term deposits, high interest savings accounts or bonds. However, some CMAs may have tiered or variable interest rates that change depending on your balance or the official cash rate.
• – Fees: These are the charges you pay for using the account. They may include account service fees, transaction fees, withdrawal fees or transfer fees. Some CMAs may waive some or all of these fees if you meet certain criteria, such as maintaining a minimum balance or making a minimum number of transactions per month.
• – Access: This is how you can deposit or withdraw money from your account. It may include online banking, mobile banking, phone banking, ATM access, cheque book access or branch access. Some CMAs may offer more access options than others, depending on the provider and the type of account.
• – Integration: This is how well your CMA works with other products or services offered by the same provider or a third party. It may include linking your CMA to your investment portfolio, superannuation fund or other bank accounts. Some CMAs may offer more integration options than others, depending on the provider and the type of account.

By comparing these factors, you’ll hopefully be able to find a CMA that suits your needs and preferences. You can also contact your bank or financial institution and ask about their CMA products and features.