This variability is due to the types of investments that each cash sweep program utilizes (invests in), as well as the rate that they are willing to pay for your cash sweep balances. The interest or dividend you earn on cash sweep balances will typically vary with every firm’s cash sweep program. And although your cash “moves” around, it’s always accessible when you choose to invest in longer term investments.Ĭrediting rates vary. At the end of every month you’ll receive an interest or dividend payment. In a cash sweep, an investment firm figuratively sweeps clients’ uninvested cash balances into a (again figurative) dust pan and empties it into either FDIC-insured accounts held at one or a network of banks, or into one of several money market mutual fund offerings. This is one, be it rare, case when financial jargon works well. Here’s what you need to know about cash sweeps. That’s why it’s a good idea to know how your money is invested. That’s because your investment firm transfers that cash into investments that provide for daily liquidity. It’s what’s called a cash sweep program and most investment firms handle this aspect of their business a little differently. But do you know what happens to that idle cash in the meantime?įor starters, it may not exactly be idle.ĭepending on the investment vehicle used and the dollar amount invested, that cash earns interest and/or dividends every month. Whether you have $1,000 or $1 million invested, there’s a good chance you’ll hold some cash in your investment account(s) at some point, whether it’s proceeds from a sale, dividends or routine contributions. Educational Resources About Family & Work.Educational Resources About Everyday Money.Educational Resources About Financial Planning.Disability Insurance Calculator Money Parachute icon.Disability Insurance For Doctors and Dentists.
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