When you deposit money in a brokerage account and don't invest it right away, the broker "sweeps" it somewhere. Where it goes decides how much interest you earn, and the difference between brokers is large. Some pay close to high-yield savings rates. Others pay almost nothing unless you move the cash yourself.
Rates change with the Fed and with promotions, so this guide focuses on how each broker's sweep works and how to check the rate you're actually getting.
How a cash sweep works
There are two main kinds:
- Bank sweep programs. Your cash is moved to one or more partner banks. It's usually FDIC-insured up to the limit at each bank, but the broker sets the rate, and it's often low.
- Money market fund sweeps. Your cash sits in a money market fund. These usually pay closer to market rates. They aren't FDIC-insured, but the account is covered by SIPC, and money market funds hold short-term, high-quality debt.
How the big brokers handle it
| Broker | Where idle cash goes by default | What to check |
|---|---|---|
| Fidelity | A money market fund as the core position in most accounts | Which fund is your core position |
| Vanguard | A money market settlement fund | The settlement fund's current yield |
| Schwab | Bank sweep to Schwab's banks | The sweep rate for your balance tier; you can buy a money market fund instead |
| E*TRADE | Bank sweep | Sweep rate vs its separate premium savings or money market options |
| Robinhood | Bank sweep, with a higher rate for Gold members | Whether the rate needs a Gold subscription |
| Moomoo | Opt-in cash sweep, often with a new-account rate booster | How long the promotional rate lasts |
| Webull | Opt-in cash management program | Whether you've enrolled |
Moomoo's cash sweep often includes a boosted rate for new funded accounts. It's temporary, so check how long it lasts and what it drops to. Check Moomoo's current rate.
How to check the rate you're getting
- Log in and find your cash or "core position" balance.
- Look for the sweep program name or money market fund ticker next to it.
- Search the broker's site for that program's current rate, or the fund's 7-day yield.
- Compare it with a high-yield savings account or Treasury bills.
How to earn more on idle cash
- Buy a money market fund yourself if your broker's default is a low bank sweep. It trades like a mutual fund and can usually be sold the next business day.
- Keep your emergency fund elsewhere. Cash you might need quickly usually belongs in a high-yield savings account, not a brokerage account.
- Watch promotional end dates. A boosted rate that drops after a few months can end up lower than a plain money market fund.
FAQ
Is a brokerage cash sweep FDIC-insured?
Bank sweep programs usually are, up to the FDIC limit at each partner bank. Money market fund sweeps are not FDIC-insured but are covered by SIPC as part of your brokerage account.
Why is my brokerage cash earning so little?
Many brokers sweep idle cash into a bank program that pays a low rate. You can often earn more by buying a money market fund in the same account.
Which brokers pay the most on cash?
It changes with rates and promotions. Brokers that default to a money market fund, like Fidelity and Vanguard, tend to pay closer to market rates than low-rate bank sweeps. Check each broker's current rate before you move money.
