1/22/2024 0 Comments Cash balance vs cash sweep![]() They represent an alternative to money market funds or certificates of deposits, but they usually pay much lower returns. Brokerage firms "sweep" clients' uninvested cash into accounts at internal and outside banks that hold the deposits. Two experts whose firms work with wealth management companies on their cash management programs shared the notable figure for industry-wide holdings in sweep accounts with Financial Planning. But the language of your post suggests choosing a radioactive waste fire over a dumpster fire, which is just specifically ill informed when there are non-burning options available.Very few wealth management firms are willing to engage with questions about their cash sweep programs, even though they represent about $1 trillion in client holdings across the industry. congrats you just caught up with the sub in June of 2021. If you're upset that the banks/brokers are pulling shenanigans. Those treasuries are basically hot garbage now for two different reasons: they aren't cash so if you have too many of them then you risk liquidity issues and they become less valuable as the Fed raises interest rates. Because they bought treasuries, they didn't have the assets on hand that they said they did. Second, and I think this is important here, SIVB went out and bought the treasuries. If you are trading on an app, or you are trading with a broker, then you are not dealing with a fiduciary. Unless they meet very specific definitions of a fiduciary they are not in any way obligated to do with your money what you want them to do with your money. In a very isolated sense you are correct, until you aren't.įirst off, once you hand them your money, they can do whatever they want with it. Seems to be a key difference between Schwab and Fidelity too as Fidelity holds cash positions in their SPAXX MMF's. Still have no idea when it occurred, but its been a thing for much longer than I realized. If it was just me I'd think I was being a crazy conspiracy theorist, but my dad has been a loyal customer for over 30 years and they even put him in the bank sweep account.ĮDIT: Seems that this change was made more than 2 years ago. This seems to have been the case for months and I cannot say when this happened, but I do know my dad has a large cash position after selling out of TSLA a few months ago and from the time he sold in january to now, he has only been accruing the Bank Sweep interest rate and not the MMF rate. IMO this means that Schwab is pocketing the difference and unless you specifically ask for your money to be moved into an MMF are being ripped off for over 4% APR even according to their own disclosure. This is crazy as a bank sweep account only pays 0.45% interest rate instead of the 4.8% currently being paid out on MMF's. According to Schwab's own disclosure which you can find hereĬash not invested is generally held in a money market fund.Īfter 10 minutes of searching and what felt like an intentionally obscured feature (speculation), I was able to find through my statement that my cash was being held in a Bank Sweep account and not a MMF. I decided to log into my Schwab account to check out my cash position and the interest rate accrued from being held in a MMF (Money Market Fund). The most effective route to BUY, HODL and OWN GameStop SharesĬould broker diversification be the catalyst? Or is it just a good idea?ĭiscord Daily Thread DRS Guide AMAs DD Library Hide CS PostsĪs the title states, Schwab is pulling some pretty shady stuff right now. The GME Masters' Guide: A DD Campaign for Apes Levels 1-20 Looking to catch up on the GME Saga? Start here!Įverything Superstonk Knows About Naked Shorting - A Definitive Guide Visit /r/VeryGMErryHolidays for info on Superstonks annual Toys for Tots charity event! New here? Start with these: The Superstonk Library aka gme.fyi Comment !apeprove! anywhere on the sub to be added to the list of pending approvals.Approved Users will bypass these karma and age restrictions entirely.Not enough karma? Post your DRS Proof /r/GMEOrphans.*total post and comment karma only, excludes award karma | Marketplace Creator| Submission requirements: Community Posts Wiki || Rules || Automod Info Post Flairs A place for theoretical discussions about GameStop Stock ($GME).
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