Schwab is taking me for a ride!

SammyJ said:
But who sweeps your cash automatically nightly from your brokerage like interactive Brokers ? It pays near the highest stand alone money mkts out their .Schwab you have to manually move . Does fidelity automatically sweep nightly to high yield accounts ?
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Fidelity does (maybe not nightly...It seems they all do a couple days float, which is fine). I will have to call Schwab and look at the other options including the two goverment bond funds. Just hate to see them rise and fall vs locked in...

Thanks people...This is one of the best uses of these forums.
 
Careful when you consider bond etfs. A lot of them also expose you to longer treasury duration and many even invest in bank corporate bonds, they swing widely relative to tbills and some even expose you to credit risk. Read the prospectus and investment brief to understand their holdings.

Cabin111 said:
Fidelity does (maybe not nightly...It seems they all do a couple days float, which is fine). I will have to call Schwab and look at the other options including the two goverment bond funds. Just hate to see them rise and fall vs locked in...

Thanks people...This is one of the best uses of these forums.
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Looks like the minimum is 5k for T bIlls

Cabin111 said:
First disclosure...I own 100 share of Schwab. I have been praising their name on the boards here, for basic individual investors (not day traders).

So I am sitting with just over $9,000. in our sweep trust account, (into Schwab Bank)...Earning less that .005. Sick I know...

I look on their website (and called the 800 number) concerning buying a 3-9 month US Treasure....Simple basic thing.

The minimum they offer is $50,000. I do not like the choices they give for CDs...Some no name bank (that Schwab gets a kickback for investing with). In these troubled times, I want safety with some income.

I look at a Goldman Sacks Banks CD with a decent yield (at Schwab). The CD doesn't start earning interest till about May 5!! Schwab is using the float for a long time before they even start the clock!!!

I know my Fidelity sweep accounts earns over 4%, so I don't even think about holding and waiting to reinvest.

At Schwab, what my wife and I have done with our Roth IRAs, is if we have one or two grand, we will just buy a cheap CD and gain the extra income. It is not reported for tax purposes...So no big whoop.

But for right now, I feel stuck between a rock and a hard place...

PS Yeah, I know I can do TIPS (which I may do)...
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Clubber Lang said:
SVWXX yields 4.67%

and those “no name” banks are all FDIC so who cares that they aren’t JPM.
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Took a night to sleep on what you said...

My mind works different that most people...I was ADHD as a kid. Most albums (from 60's or 70's), I can tell you what the next line of the song will be...Good at Jeopardy type person. I remember someone (smart person) mentioning about 20 years ago, that FDIC has not really been tested. I believe that...What happened to Silicon Valley Bank (and others), was just a small battle. I believe a big war is coming where FDIC will be really tested. A bank goes under, they may pay 50% now, 25% in one year, and the last 25% in the second year. AGAIN, IT HAS NOT BEEN FULLY TESTED!!!

2008 my wife and I walked our savings and checking accounts (cashiers check, with the safety deposit box) to Wells Fargo. I didn't care what Wells Fargo paid...I just didn't want to test my old bank (it did go under).

Just my belief and thoughts...
 
Finishing off the thread. I called Schwab about the two Schwab bond/money market funds. They said they could not sweep into them...They must be bought.

But then I looked at their website (with a Schwab rep on the phone), and the minimums changed on their US Treasuries!! This happened over night...Down to $1,000. per unit. I didn't even want to bother with the middle of the bid/ask (since they were so thin). Just bought my $9,000. treasure, that matures on Oct 31, 2023.

The other big concern is when other US Treasuries I own (or covered calls get called away), I will be sitting there with maybe $50,000. earning 1/2 of one percent, unless I make a manual move. You have to be on top of their sweeps (or trade) at all times!!!

I don't like that...
 
Cabin111 said:
First disclosure...I own 100 share of Schwab. I have been praising their name on the boards here, for basic individual investors (not day traders).

So I am sitting with just over $9,000. in our sweep trust account, (into Schwab Bank)...Earning less that .005. Sick I know...

I look on their website (and called the 800 number) concerning buying a 3-9 month US Treasure....Simple basic thing.

The minimum they offer is $50,000. I do not like the choices they give for CDs...Some no name bank (that Schwab gets a kickback for investing with). In these troubled times, I want safety with some income.

I look at a Goldman Sacks Banks CD with a decent yield (at Schwab). The CD doesn't start earning interest till about May 5!! Schwab is using the float for a long time before they even start the clock!!!

I know my Fidelity sweep accounts earns over 4%, so I don't even think about holding and waiting to reinvest.

At Schwab, what my wife and I have done with our Roth IRAs, is if we have one or two grand, we will just buy a cheap CD and gain the extra income. It is not reported for tax purposes...So no big whoop.

But for right now, I feel stuck between a rock and a hard place...

PS Yeah, I know I can do TIPS (which I may do)...
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I'm not following - just buy SNOXX and get 4.56%. Why does it have to be swept? You just want it to be automatic, is that the only issue?

Money Market Funds | Charles Schwab
 
M.W. said:
SNOXX primarily holds repos with an average maturity of 1-7 days, exposing investors to a certain degree of credit risk. Not much but non zero, different from t-bills.
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There's not a fund on the list that you'd call better? I mean than having to buy bills every day.
 
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