How Millionaires Manage Their Wealth Across Different Accounts

Millionaires often manage their money through a variety of accounts to maximize both security and growth potential. Here’s how they typically distribute their funds:

1. Checking Accounts: While not the main store of their wealth, millionaires use checking accounts for daily transactions and immediate access to funds. They generally keep amounts under $250,000 in any single checking account to ensure FDIC coverage.
2. Savings and Money Market Accounts: For better interest rates while maintaining liquidity, millionaires may utilize high-yield savings accounts and money market accounts. These accounts offer higher interest than checking accounts and often come with check-writing privileges and ATM access.
3. Cash Management Accounts (CMAs): These accounts combine the features of checking and savings accounts but are typically offered by brokerage firms. CMAs often offer higher interest rates, and the funds may be swept into multiple banks for greater FDIC insurance coverage.
4. Investment Accounts: Millionaires invest in stocks, bonds, and mutual funds through brokerage accounts. These accounts don’t have contribution limits, unlike tax-advantaged retirement accounts, allowing for significant investment growth.
5. Retirement Accounts: Tax-advantaged spaces like 401(k)s and IRAs are crucial for long-term wealth building and retirement planning, offering tax relief that enhances compounding.
6. Alternative Investments: Diversifying beyond traditional stocks and bonds, many millionaires invest in real estate, commodities, and even art. These investments can provide both tangible assets and potential tax benefits.
7. Private Banking: Wealthy individuals often use private banking services offered by major financial institutions, which provide personalized wealth management and planning services along with perks like waived fees and exclusive investment opportunities.

Each millionaire’s strategy may vary based on their financial goals, risk tolerance, and personal preferences, but diversification and careful planning are consistent themes.