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Not sure where you're getting that from. My Fidelity cash management account sweeps any idle balance into a money-market fund. I don't have any first-hand exp

Not sure where you're getting that from. My Fidelity cash management account sweeps any idle balance into a money-market fund. I don't have any first-hand experience with Charles Schwab, but their website indicates that their checking accounts likewise accrue interest with no minimum balance. Of course, interest rates are currently so low that it's basically a moot point. And I hardly ever have let any idle cash sit around without sweeping it into a short-term bond fund, or something better than the money market default.

trimbo 7y ago
Schwab got rid of sweeps. Really makes Fidelity a lot more appealing if you keep a lot of cash in there.
- StevePerkins 7y ago
  I feel like I'm discussing climate change, where there are multiple perceptions of reality competing for attention. Other people in this thread report that Schwab pays interest on checking account balances. Schwab's website clearly states that their checking account accrues interest. There's a footnote link there, but the fine print simply says that the rate can change over time. https://www.schwab.com/public/schwab/banking_lending/checking_account https://www.schwab.com/public/schwab/banking_lending/checkin... Of course, just as I don't understand people using a traditional bank these days, I likewise don't understand letting a large cash balance sit in checking account. The best interest rate you're going to see these day is probably sub-1%. So why leave excess money sitting around in a checking account, when sweeping it into even a short-term U.S. bond fund would provide 2x-10x the return with no additional risk? (i.e. if U.S. Treasuries default, then money market accounts are probably screwed too anyway)
toomuchtodo 7y ago
Fidelity's Cash Management account is really designed for folks who are keeping up to $1.5MM in their cash account, with the funds swept between multiple banks to ensure the entire balance is FDIC insured. The interest rate is appalling, but it's appalling everywhere.

trimbo 7y ago

Schwab got rid of sweeps. Really makes Fidelity a lot more appealing if you keep a lot of cash in there.

StevePerkins 7y ago
I feel like I'm discussing climate change, where there are multiple perceptions of reality competing for attention. Other people in this thread report that Schwab pays interest on checking account balances. Schwab's website clearly states that their checking account accrues interest. There's a footnote link there, but the fine print simply says that the rate can change over time. https://www.schwab.com/public/schwab/banking_lending/checking_account https://www.schwab.com/public/schwab/banking_lending/checkin... Of course, just as I don't understand people using a traditional bank these days, I likewise don't understand letting a large cash balance sit in checking account. The best interest rate you're going to see these day is probably sub-1%. So why leave excess money sitting around in a checking account, when sweeping it into even a short-term U.S. bond fund would provide 2x-10x the return with no additional risk? (i.e. if U.S. Treasuries default, then money market accounts are probably screwed too anyway)

toomuchtodo 7y ago

Fidelity's Cash Management account is really designed for folks who are keeping up to $1.5MM in their cash account, with the funds swept between multiple banks to ensure the entire balance is FDIC insured. The interest rate is appalling, but it's appalling everywhere.