Brex Cash Review 2021: Cash Management Account

Brex Cash offers a fee-free, tech-first alternative to the traditional business bank account.

Randa KrissFebruary 13, 2021
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Brex Cash is a cash management account that allows you to store your funds as uninvested cash with the program bank, or invest them in a money market fund to earn yield. With no fees and unlimited digital transactions, Brex Cash offers a tech-first alternative to the traditional business bank account.

The Brex Cash account includes access to the rewards-earning Brex credit card, built-in expense management tools and the Brex mobile app. Brex Cash, however, is not available to all entity types and lacks core features associated with business banking, such as the ability to withdraw and deposit cash at an ATM.

Brex Cash is best for small-business owners who:

  • Want a free cash management account with unlimited transactions.

  • Prefer to manage the entirety of their finances online.

  • Want some control over where their funds are stored and invested.

  • Don’t need to withdraw or deposit cash using an ATM or branch location.

  • Have organized their businesses as non-individual liability companies (C-corps, S-corps, LLCs).

Pros & cons

Pros

  • No monthly fees, no minimum opening deposit and no minimum balance requirements.

  • Unlimited fee-free transactions.

  • Offers two options on where your funds are stored with the option to invest in a money market fund to earn yield.

  • Get instant payouts on e-commerce sales.

  • Includes rewards-earning Brex credit card.

Cons

  • Not available to unincorporated businesses (such as sole proprietorships and general partnerships).

  • Low yield on money market fund.

  • Not a business bank account, lacking traditional banking features such as debit card and ATM access.

Brex Cash at a glance

Monthly fee:

$0

Minimum opening deposit requirement:

$0

APY:

  • Uninvested cash: no yield.

  • Cash invested in money market funds: 0.03% seven-day yield rate (as of this writing).

Transactions:

Unlimited

Bonus:

Earn 20,000 points when you link payroll to Brex Cash, and 10,000 points when you spend $3,000 in three months on your Brex card.

Brex Cash

at Brex

How Brex Cash works

Brex Cash is a cash management account provided by Brex Treasury LLC, an affiliated Securities and Exchange Commission-registered broker-dealer and member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corp. Unlike traditional business bank accounts, with a Brex Cash account, you have two options for storing your funds.

By default, your funds are stored, uninvested, in Brex’s program bank, LendingClub Bank with insurance from the Federal Deposit Insurance Corp. up to $250,000. The second option is to invest your funds in a money market fund, the Dreyfus Government Cash Management Fund. These funds will earn the current seven-day yield with waiver rate — 0.03% as of this writing — and receive SIPC insurance up to $500,000.

Brex gives you the ability to allocate your funds between these two options, with no restrictions on how much you can allocate to either. You can choose to allocate your funds as a percentage split (e.g., 50% univested, 50% in the money market fund) or capping a dollar amount (e.g., $100,000 invested in the money market fund at all times and any additional funds will automatically be allocated to an FDIC-insured account).

To open a Brex Cash account, you create an online account and fill out an application on the Brex website. Only incorporated businesses — C-corps, S-corps, LLCs, LLPs — registered in the U.S. are eligible to apply for a Brex Cash account.

You’ll need to provide basic information about yourself, your business and any additional owners with 25% or more ownership in the business in order to complete the Brex Cash application. You’ll also need to provide a photo ID, as well as an employer identification number for your business.

After you submit your application, you can check the status by logging into the Brex dashboard. Brex typically reviews applications within five to seven business days and will reach out to you directly if it requires additional information.

Once your application is approved, you’ll receive an activation email to set up your account. To do this you’ll need to make your first deposit from an external financial source, like another bank account, by initiating a wire or ACH transfer.

You’ll also be issued a virtual Brex Mastercard and have the ability to opt in to receive a physical card. You can ship your Brex card anywhere in the U.S., and it should arrive within five to seven business days.

After your first deposit is complete, you’ll be able to start using your Brex Cash account to manage your finances by customizing user permissions, setting up payments, downloading the mobile app, integrating with other business tools and more.

You can also change your fund allocations at any time through the Brex dashboard.

Where Brex Cash stands out

No fees: Brex Cash has no monthly fees, no minimum opening deposit requirement and no monthly balance requirements. In addition, this account has no transaction fees, which includes domestic and international ACH payments, sending and receiving checks, incoming and outgoing domestic wires and incoming and outgoing international wires (although the recipient’s bank may charge a fee upon receipt of international wires).

More control over your funds: Unlike a typical business checking account, Brex Cash is designed to give you more control over your finances, offering the option to allocate funds to an FDIC-insured account or invest them in a money market fund to earn yield, or to split your funds between the two.

Instant payouts for e-commerce: Amazon sellers who sign up for Brex Cash can use instant payouts, allowing them to receive payment for their sales within seconds instead of having to wait the traditional 14 days to get paid. To qualify for instant payouts, Amazon sellers must have one month of operating history and at least $500 in monthly net sales volume. Brex offers a maximum cash deposit amount eligible for instant payouts based on your selling performance.

Brex card: The Brex Cash account includes access to the Brex credit card, which has no fees, no personal guarantee, and is paid automatically daily, although you have the option to apply for monthly statements. The Brex Mastercard earns rewards points in tiered categories:

  • 8x points on rideshare, including Uber, Lyft, taxi, and scooter.

  • 5x points on flights and hotels booked through Brex Travel.

  • 4x points on restaurants and dining.

  • 3x points on eligible Apple products like Mac and iPhone, via the Brex portal.

  • 1.5x points on ads through Facebook, Google, Amazon, Microsoft, and more.

  • 1x points on everything else with no cap on how much you can earn.

You can redeem these points for cash back, gift cards and travel.

Built-in expense management tools: With Brex Cash, you receive built-in expense management tools that allow you to set up transaction approval flows, schedule recurring payments and customize user roles. You can automatically match receipts, create monthly credit limits and send automatic reminders for missing transactions.

In addition, you can use the Brex mobile app to deposit checks, check your balance, approve or deny transactions, upload receipts and use your cards. You can also integrate your Brex Cash account with business tools such as QuickBooks, Xero, NetSuite, Expensify, Concur and Pilot to streamline your accounting processes.

Where Brex Cash falls short

Not available to unincorporated small businesses: The Brex Cash account is only available to incorporated businesses. In other words, sole proprietorships and general partnerships are not eligible to apply. Although seemingly minor, this actually excludes a large portion of small businesses in the U.S.

According to the SBA, sole proprietorships and partnerships make up 86.4% and 7.4% of non-employer businesses, respectively. In addition, these entity types make up 14.1% and 11.8% of small-employer businesses.

Low yield on money market fund: If you choose to use a Brex Cash account to invest your cash in the  Dreyfus Government Cash Management Fund, you’ll currently earn the 0.03% seven-day yield rate. Although this rate is subject to change, there are business checking account competitors that offer higher rates. The free BlueVine business checking account, for example, currently offers an APY of 1% on all balances up to $100,000.

Additionally, if you'd prefer to keep some funds in a less-accessible account, high-yield business savings accounts can also offer higher yields than the Brex Cash account — and they often offer no fees and online-opening capabilities, too.

No ATM access: You can use your Brex card to make purchases and your card is paid automatically on a daily basis, similar to a business debit card. Unlike a business debit card, however, you cannot use your Brex card to make cash withdrawals or deposits at an ATM.

Similarly, unlike most traditional business bank accounts, Brex does not offer a network of ATMs where you can make physical check deposits, check your balance or make account transfers, and Brex offers no in-person branches.

Compare Brex Cash alternatives

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