"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:IsCdndoE7_tVHy_YnZ2dnUVZ_tKjnZ2d[at]comcast.com...
- quote -

Oh, ye of too much faith :-). The bank is paying only 0.995% (APY) until
you get over $100K, at which point it pays a whopping 2.613%.
http://www.schwab.com/public/schwab/...p_feature.html

You can't use their MMFs as sweep accounts until your household balance
reaches $500K. (Technically, you can keep it in an interest-bearing account
at Schwab instead of in their bank, but it would earn the same paltry
interest as the bank.)
http://www.schwab.com/public/schwab/...erest_services

- quote -

I think you are talking about Schwab Investor MMF (SW2XX).

- quote -

If you hold this in a retirement account, the minimum additional investment
is $1 (per prospectus). In the list of accounts you gave below, the minimum
would thus not be an obstacle.

But even in a taxable account, there are workarounds. If you hold at least
$3,000 in the MMF (the minimum required is $2,500), then when a dividend
arrives, you could sell $500 from the MMF, and the next day, aggregate it
with the dividend and move it all to the MMF. A different type of
annoyance, to be sure.

- quote -

Mark Freeland
BnetOnewsX[at]sbcglobal.net

Mark Freeland wrote:

- quote -

Schwab's sweep is in the 1.5-2% range. Their fund with $2500 min is
4.74%. The issue is that when a stock's cash dividend hits the account,
you can't buy into the MM fund with less than a $500 new purchase.
This may seem trivial, costing maybe $10 lost interest a year, but with
multiple accounts, Joint, His IRA, Her IRA, His Roth, Her Roth, His
inherited IRA, Kid's UGMA, the annoyance adds up. I glance at each
account every month's end to see if any cash needs to be shifted.
JOE

"Tad Borek" <borekfm[at]pacbell.net> wrote in message
news:%9Prh.99$4H1.11[at]newssvr17.news.prodigy.net...
- quote -

A few years ago, I read a statement by Schwab acknowledging that the sweep
MMFs they provided for settlement accounts paid lower interest than other
MMFs (including their own). Schwab asserted that the sweep funds were there
for their customers' convenience, and not for long term investing. Since
then, Schwab has forced many of its customers into even lower-paying Schwab
bank accounts. (Though for the extremely risk-averse, one may take some
solace in the bank accounts being FDIC-insured.)

Other brokers do simlar things. At Fidelity, in a taxable account, the only
taxable choice (as opposed to a muni MMF) for a settlement account is
"Fidelity Cash" - a lower interest-bearing account (not a MMF). One has the
option of investing in Fidelity Cash Reserves, but that is treated like any
other investment, and cannot be used as the "core" account. As Andrew
Koenig points out, Vanguard is better here - Vanguard lets you use its best
yielding MMFs as settlement accounts.

Mark Freeland
BnetOnewsX[at]sbcglobal.net

"Tad Borek" <borekfm[at]pacbell.net> wrote in message
news:%9Prh.99$4H1.11[at]newssvr17.news.prodigy.net...

- quote -

Wow!

Vanguard's brokerage account requires you to designate a money-market
account for cash sweeps. Their MM accounts are currently paying about 5%.

P.Schuman wrote:
- quote -


It's even worse at many brokerage firms these days, an issue I've been
harping on for awhile. If you leave cash on hand it's by far a bigger
issue than commission rates. TD Ameritrade for example is awful - under
1% until your account is over a certain level (which is pretty high).

The WSJ did an article about this recently, it's become a major profit
center for several of the firms. The article was "How Wall Street
'Sweeps' the Cash - Investors' Idle Money Is a Brokerage-Firm Bonanza",
1/11/2007. The article claims that Merrill Lynch earned $2 billion
from this in 2006. Think of that! That's $2 billion in interest that
didn't land in their clients' accounts. Poof!

Look for "Net interest income" as a line item in quarterly reports for a
bank or broker. That's an indication of the rate difference between what
they're paying depositors and what they're earning on the dollars.

Or just look at your rate and vote with your feet!

-Tad

My wife's sister has a Chase checking + savings account.
<http://www.chase.com/ccp/index.jsp?p...vings/page/sav
ings_chasepremier
It's amazing that the interest rate is in the 2.5% range (for a small account)
with inflation at about the same rate !!
Therefore, including taxes paid on the interest earned,
the Chase savings account will actually COST money to retain....