6 Best Investment Accounts for Handling Uninvested Cash

• Account Minimum: $0, $10 minimum to start investing
• Fees: 0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 per month in recurring account deposits ($4/month for smaller balances); optional 0.15% (annual) fee on accounts with at least $100,000 in assets in investment and cryptocurrency accounts unlocks premium with unlimited access to certified financial planners (for accounts with at least $2 million, there is a fee discount of 0.10%)

If you’d like help with your portfolio, Betterment is a robo-advisor that takes care of the investment decisions for you. You simply pick a type of portfolio strategy, then Betterment’s robo-advisor will build a portfolio of stocks, bonds, and other assets to meet these goals. In exchange, it charges a flat fee: $4 per month or 0.25% of accounts worth at least $20,000. This is considerably less than the 1% or more per year charged by a human advisor.

To go with its robo-advisor, Betterment offers a high-yield cash account called Cash Reserve. The Cash Reserve account earns a very high annual percentage yield (APY) of 5.00% APY on all balances, as of December 2023. There’s no minimum balance required to earn interest and the rate applies to all accounts, and your balance receives FDIC insurance up to $2 million.

Once you’re ready to invest, you can then transfer the cash to your Betterment portfolios. Alternatively, Betterment offers a no-fee checking account. You could transfer cash to this account to spend on a debit card or make ATM withdrawals. However, it doesn’t earn interest like the Cash Reserve account.

• Account Minimum: $0
• Fees: $0 commissions for equities/ETFs available on IBKR’s TWS Lite, or low costs scaled by volume for active traders that want access to advanced functionality such as order routing; $0.65 per contract for options on TWS Light; $0.65 base rate for TWS Pro users, with scaled rates based on volume; $0.85 per contract for futures

Interactive Brokers is one of the best options for serious traders and investors. Its platform offers a wide range of investment technology, advanced research, and access to over 150 markets. Interactive Brokers offers commission-free trading for stocks and ETFs through its IBKR Lite program. It does charge low commissions for its more advanced IBKR Pro platform in exchange for more trading capabilities and better order execution.

Interactive Brokers offers a program for uninvested cash that should be highly appealing for serious investors. As of December 2023, it pays an interest rate of 3.83% for IBKR Lite accounts and 4.83% for IBKR Pro accounts on balances above $10,000. As rates change over time, IBKR Lite accounts earn one percentage point less than IBKR Pro. You don’t need to opt in to earn interest. However, you can join an additional sweep program to get more FDIC insurance on your cash balance: $2.5 million of coverage on top of the normal SIPC coverage of $250,000.

The drawback with Interactive Brokers is you need a large account balance to earn its best rate. If your total brokerage account balance is over $100,000, you earn interest on all your uninvested cash. However, if your account value is less than $100,000, Interactive Brokers will not pay interest on your first $10,000 of uninvested cash. On an $11,000 cash balance, only $1,000 would earn interest.

• Account Minimum: $500 for the robo-advisor, $1 for stocks
• Fees: 0.25% for most accounts; no trading commission or fees for withdrawals, minimums, or transfers

Wealthfront is another highly rated robo-advisor. Its platform can automatically build you a portfolio using funds with US stocks, foreign stocks, bonds, and real estate. You start by answering a few questions about your investment goals, and the robo-advisor goes to work to build you a suitable portfolio. You can also make zero-commission trades in stocks with Wealthfront.

As of December 2023, Wealthfront’s Cash Account pays a highly competitive APY of 5.00% (5.50% when you refer a friend). The high interest rate applies to all your uninvested cash. There is no minimum or maximum balance. You just deposit cash and earn interest until you’re ready to invest. Your cash receives up to $8 million in FDIC insurance (and $16 million for joint accounts) thanks to the banks Wealthfront works with.

There are no account fees or restrictions for the Cash Account. You can transfer money in and out as often as you want. You also receive a debit card to make purchases.

• Account Minimum: $100,000 for wealth management, $0 for individual investment accounts
• Fees: 0.89% to 0.49% for accounts over $1 million

Empower combines the technology and convenience of a robo-advisor with the support of traditional financial advisors. Its platform offers ongoing portfolio allocation recommendations, rebalancing, tax optimization, and unlimited access to speak with a human advisor. To use this service, though, you need an account balance of at least $100,000. If you invest on your own, Empower’s investment accounts do not have an initial balance requirement.

Empower’s Personal Cash account also does not have a minimum account balance requirement. As of December 2023, the account earns a high APY of 4.70%, and there are no balance requirements or fees to earn this interest rate. However, you do need to transfer your cash out of any Empower investment account into the cash account to earn interest; it doesn’t happen automatically.

Empower offers aggregate FDIC insurance up to $5 million on your balance. While you can transfer money out of the cash account as often as you want, Empower does set a daily withdrawal limit of $100,000. To help manage your money, you can access Empower’s free financial planning tools like its budget planner and net-worth calculator.

• Account Minimum: $0
• Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trades

Fidelity is one of the largest investment brokers in the world thanks to its commitment to low-cost investing. It does not require a minimum account balance, charges no fees or commissions on stock and ETF trades, and has low administrative fees. Its platform is user-friendly for beginners, yet offers plenty of screeners, portfolio analysis tools, and other features for serious investors. For this reason, it ranked as the best overall broker in our review of Best Online Brokers and Trading Platforms.

Fidelity’s program for uninvested cash is also simple and competitive, offering 4.99% on uninvested cash through a sweep into money market funds. Fidelity's cash management program operates more like a bank account, offering bill pay, an ATM card, and mobile check deposit. The cash management program earns an APY of 2.72%, as of December 2023. If you have both types of Fidelity accounts, you can transfer cash back and forth.

• Account Minimum: $0
• Fees: $0 commissions for stock, ETF, options, and cryptocurrency trading (small markup is priced in)

When it first hit the scene, Robinhood made a big splash in the investment world. Robinhood’s app made investing incredibly easy—some might say even too easy. Robinhood’s trading app offers zero-commission trades for stocks, ETFs, options, and cryptocurrencies. Its investment research tools are a little limited compared to major desktop platforms, but are enough for casual investors.

Robinhood does have a competitive program for uninvested cash, but there’s a catch. You must have a Robinhood Gold account to qualify for its highly advertised rate. Robinhood Gold offers premium features like Morningstar research, a larger limit for instant deposits, and lower rates for margin investing at a cost of $5 per month.

If you pay for Robinhood Gold, you earn 5.0% on all your uninvested cash. However, if you just have a free Robinhood account, you only earn 1.5%. Whether the $5 monthly fee is worth it depends on the size of your cash balance and whether you want the other Gold benefits. To use Robinhood’s program, you must opt in to use cash sweep on the app. This makes you eligible to earn interest and increases the FDIC coverage of your cash balance to $2.25 million. There’s no minimum or maximum balance requirement to earn interest.