What Is a Ready Asset Account (RMA Account)?

A Ready Asset Account (RMA) is a financial management account, commonly associated with Merrill Lynch, designed to integrate various financial services into a single, comprehensive platform. This account aims to simplify financial management by combining traditional banking functions with investment capabilities. Its purpose is to offer a streamlined approach for individuals to manage their cash, investments, and daily financial transactions from one centralized location.

Core Components of a Ready Asset Account

A Ready Asset Account incorporates several distinct features, providing a broad range of financial functionalities. It includes robust investment capabilities, allowing account holders to engage in brokerage activities. This means individuals can buy and sell various securities, such as stocks, bonds, and mutual funds, directly through the account. Uninvested cash balances are typically swept automatically into a money market fund, aiming to earn income while maintaining liquidity.

Beyond its investment aspects, a Ready Asset Account also provides extensive banking features. Account holders often receive checking account privileges, enabling them to write checks for payments. A debit card is usually provided for convenient access to funds, facilitating purchases and ATM withdrawals. The account may also support direct deposit for incoming funds, such as paychecks, and offer bill payment services, centralizing routine financial transactions.

Some comprehensive financial management accounts may offer access to a margin line of credit. This feature allows individuals to borrow against the value of their eligible securities, providing additional liquidity or leverage for investments. All these diverse activities, from investment trades to banking transactions, are typically summarized in a single, consolidated statement, offering a clear overview of all financial movements within the account.

How a Ready Asset Account Differs

A Ready Asset Account distinguishes itself from other common financial accounts primarily through its integrated structure. Unlike traditional checking or savings accounts offered by banks, an RMA is not solely focused on deposits and basic transaction services. Traditional bank accounts generally lack the embedded investment capabilities central to an RMA, meaning they do not provide direct access to brokerage services for buying and selling securities.

Similarly, a Ready Asset Account differs significantly from a standard brokerage account. While a pure brokerage account is designed primarily for investment activities, it typically does not offer the comprehensive banking features found in an RMA. Standard brokerage accounts usually do not provide checking privileges, debit cards, or bill payment services, making them less suitable for day-to-day financial management. This combined functionality allows individuals to manage their liquid assets and investment portfolios cohesively, providing a more holistic financial management experience than either a standalone bank account or a standalone brokerage account can offer.

Considerations for Account Management

Managing a Ready Asset Account involves understanding how cash is handled, the associated fee structures, and the regulatory protections in place. Cash is generally managed through a sweep feature, where uninvested funds are automatically moved into a money market fund or a bank deposit program. This mechanism ensures idle cash earns some return while remaining readily accessible for investments or daily transactions.

Ready Asset Accounts can have various fees. These may include account maintenance fees, which could be an annual program fee based on assets held, potentially ranging from 0.45% to 0.85% for certain advisory programs. Transaction fees for services like wire transfers or account transfers might also apply, with charges ranging from approximately $25 to $75. Money market funds within the account may have administrative service fees or 12b-1 fees, typically ranging from 0.10% to 0.50% annually.

Account holders can manage their finances through online portals and mobile applications, allowing for transactions, statement viewing, and investment monitoring. Customer service representatives are also available for support. The investment components, such as securities, are generally protected by the Securities Investor Protection Corporation (SIPC). Cash balances swept into a bank deposit program may be eligible for Federal Deposit Insurance Corporation (FDIC) insurance, typically up to $250,000 per depositor per insured bank. Money market funds themselves are not FDIC-insured, though they seek to preserve capital.