Best futures broker for sweep/interest for 50k-100k deposits

T

trademonist

As the title suggests, I'm looking for the best futures broker that offers the highest interest paid to clients for settled cash in the 50k-100k range. I realize that's a tiny deposit amount and that we are in another ZIRP period, but even so, ideas?

I'm also (less) open to other strategies like holding half the deposit in SHV and only liquidating that position if it becomes necessary. But I'd much rather just earn sweep interest. I don't like having to monitor the situation. The more times I look at the account or the market, the less I tend to earn.

I did a bunch of research on this last night but found it difficult to get a clear and current answer. I wish all futures brokers were rated in a clear table on this one data point, with platform and trade fees next to it, so I could determine the best one for me.

TDA has worked well for many years for my very simple trading needs (1-2 max ES contract position/swing trader) but pays zilch and keeps the interest for themselves. I want some of it, and ideally lower commissions, no platform fee (I don't need a platform), with a wish list item of direct access.

All the brokers I found who offer lower commissions, no platform fee, and direct access and low fees (e.g. Generic and the like) appear to pay near zero or zero interest.

Any ideas? Am I asking for too much?

Mark

P.S. I'm new here. Please be nice.
 
Your choices for automatic sweeps into an interest bearing FDIC insured account are very limited. IB, eTrade, TD, and Schwab are the only ones that come to mind, but you would need to investigate the exact sweep requirements, if sweep is (still) offered.

The other option, which is more work for you, and perhaps more commish and/or fees for the FCM, is to purchase T-Bills with your funds as they become unencumbered. Almost all FCMs allow T-Bills to be used for account funding, usually with a 5% haircut, which means 95% value.

Personally, I don't know why interest on idle cash is even a thing with small accounts like yours, 50-100K is small. By the time you factor in the limits on choice of firm, the payable interest rate which is minimal everywhere, the fact idle cash will fluctuate down when you are trading and up only IF your trades are profitable, along with potential tax consequences of interest income, its just not worth it in the current environment IMO. Better to focus on products offered, specific trading policies, customer service availability, and of course additional costs like platforms and data, as well as an acceptable (based on the products and type of trading you do) commission and fee structure. Costs of course, can easily negate any interest earned.
 
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tiddlywinks said:
Your choices for automatic sweeps into an interest bearing FDIC insured account are very limited. IB, eTrade, TD, and Schwab are the only ones that come to mind, but you would need to investigate the exact sweep requirements, if sweep is (still) offered.

The other option, which is more work for you, and perhaps more commish and/or fees for the FCM, is to purchase T-Bills with your funds as they become unencumbered. Almost all FCMs allow T-Bills to be used for account funding, usually with a 5% haircut, which means 95% value.

Personally, I don't know why interest on idle cash is even a thing with small accounts like yours, 50-100K is small. By the time you factor in the limits on choice of firm, the payable interest rate which is minimal everywhere, the fact idle cash will fluctuate down when you are trading and up only IF your trades are profitable, along with potential tax consequences of interest income, its just not worth it in the current environment IMO. Better to focus on products offered, specific trading policies, customer service availability, and of course additional costs like platforms and data, as well as an acceptable (based on the products and type of trading you do) commission and fee structure. Costs of course, can easily negate any interest earned.
More...

Hi there,

Thanks for the t-bill idea. I wasn't aware of that. But like buying/selling SHV, it requires more monitoring. More monitoring means less profit for my particular strategy and psychology.

Wile the amounts are low, I want all idle cash earning as much as it can. My reasons are what they are, but they are valid to me. Every dollar left on the table matters to me. They add up over the years and decades. I did check IB (zero), TDA is effectively zero, and I do have a schwab account for use of their platinum debit (no forex fees and free atm worldwide), but I think they were 0.6% last I checked, probably less now. I was hoping someone already compared them or maybe there was a table or review somewhere that focused on this.

On a personal note, I have the last four consecutive years of totally self directed net positive futures trading experience (currently up 15% YTD, best year 2018 was +37%), plus two years of net negative experience (my first two; I learned a great deal by diving in and chasing platform-related smoke and mirrors). As a position trader, I don't care that much about commissions, although the lower the better. And I care very little about platforms other than they are always up and have a mobile app. I vaguely prefer direct access. I just need a place to easily and infrequently via mobile app/web place 1 (or rarely add a second ES) contract market order. That being the case, interest on idle cash outweighs other needs. Lower maintenance margin might help if I can't get decent sweep interest and I'm forced to use SHV or actual t-bills.

My bank gives me 1.5%, and I'd like to earn that much or as much as possible on idle brokerage cash while sleeping easy knowing I have all that worst-case padding for my position trade.

Cheers.
 
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zoned_post_meridiem said:
IB does offer interest on idle cash, but at a declining scale <$100k: https://www.interactivebrokers.com/en/index.php?f=46385
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Their calculator said 0 when I entered 50k and 100k. It also showed examples saying "commodity" settled cash earned 0 always, which I assumed included ES trading accounts, but didn't investigate further because even equity settled cash was coming up as 0, and it seemed to be as good as it gets. Some old pages on their site seemed to suggest they once paid up to 1.5%.

Cheers.
 
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