List of Brokers paying Interest on Uninvested Cash

D

David Donner

Maybe we can make a list of current brokers & what percent interest, if anything, each broker pays on uninvested cash balances in retail accounts.

Like:
Broker1 - 0%
Broker2 - 2%
Broker3 - 0.5%
 
Lightspeed today only pays about 25 bps, but we do allow the purchase of T-Bills or a Money market fund. Many of my clients prefer the Money market fund VUSXX-Vanguard Treasury Money Market Fund - https://investor.vanguard.com/investment-products/mutual-funds/profile/vusxx. We do not provide a sweep. It requires and request to buy and sell it but it is marginable at 99% and paid 2.86% last month.
 
Fidelity ... 3.31%
TDA ... 0.3%
Schwab ... 0.4%
***TDA/Schwab cash can be placed in SNSXX (U.S. treasuries) which pays 2.9% but there's a 24 hour hold to withdraw the funds for use.
 
BKR88 said:
Fidelity ... 3.31%
TDA ... 0.3%
Schwab ... 0.4%
***TDA/Schwab cash can be placed in SNSXX (U.S. treasuries) which pays 2.9% but there's a 24 hour hold to withdraw the funds for use.
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Yep. Bulk of my money is in my Fidelity account. I keep very little in my traditional bank "savings" account these days.
 
I was asked if there are other ways to earn a return on excess cash besides the Money Market Funds that might earn more and still have limited risk. Lightspeed also offers access to T-bills that are margined in an equity account at 90% and in a futures account at 95%. We charge a fee to buy and sell them and they can vary in value with the market conditions, but for larger accounts that do not push their margin, they earn more and still provide excess to day trade or add overnight long or short positions. You do need to be aware of borrowing money with overnight long stock or calls or your equity dropping below the value of all your securities. Then you would be borrowing money at much higher rates than T-bill or Money market funds.
 
What is the total fee to buy and sell tbills with your firm, let's say 1mln notional?

Robert Morse said:
I was asked if there are other ways to earn a return on excess cash besides the Money Market Funds that might earn more and still have limited risk. Lightspeed also offers access to T-bills that are margined in an equity account at 90% and in a futures account at 95%. We charge a fee to buy and sell them and they can vary in value with the market conditions, but for larger accounts that do not push their margin, they earn more and still provide excess to day trade or add overnight long or short positions. You do need to be aware of borrowing money with overnight long stock or calls or your equity dropping below the value of all your securities. Then you would be borrowing money at much higher rates than T-bill or Money market funds.
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Uninvested cash in a brokerage account is an oxymoron. Cash parked in the trading account is to wait and trade opportunities, liquidity access is the cost, both for you and the broker.

For short term cash you don't expect to use, buy 4, 8, 13 weeks TBills fee free. Yesterday 4 week Ts investment rate is 4.038%.
 
mervyn said:
Uninvested cash in a brokerage account is an oxymoron. Cash parked in the trading account is to wait and trade opportunities, liquidity access is the cost, both for you and the broker.

For short term cash you don't expect to use, buy 4, 8, 13 weeks TBills fee free. Yesterday 4 week Ts investment rate is 4.038%.
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The yield has dropped a bit. From what I see in IB, some are paying 3.93%. That's just a little bit higher than what IB is paying on idle cash balance after the first $10K on PRO accounts.
https://www.interactivebrokers.com/en/accounts/fees/pricing-interest-rates.php

I agree when you are actively trading you won't have much cash idling by so I actually find it easier just to let it sit there and earn the IB interest, no commissions. LOL
 
IBKR is 3.33% (currently) above $10k. They offer US-T secondary market and I bought some t-bills expiring Jan 5th at a 3.72% yield today. Commission seems reasonable. I think for all my orders, I only paid $5 in commissions. I think you pretty much have to sit on the ask in order to get filled. It might not be immediate, but you should get filled at the ask eventually.

T-bills that are margined in an equity account at 90%
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That's seems high for t-bills. IB only reduces buying power by 1% for t-bills instead of cash.
 
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