Originally Posted by youbet
That's strange they would tell you that Patrick. They have both sweep MM funds and traded MM funds. The traded funds pay a tad more but, as you said, must be bought and sold and have minimum amount qualifiers.
The Schwab web site is more difficult to strain information out of concerning their cash investment offerings than, for example, the Vanguard site. But go dig in, the info is there.
Youbet, I sent Schwab an email and got the following reply. Apparently I don't qualify for the sweep because I don't have $500K in the account.
"I can definitely understand your confusion. When Schwab opened Schwab
Bank this last year, a lot of accounts with money markets were
consolidated to the Schwab Bank Interest bearing account. This was due to the
higher cost of managing active money market funds. At this time,
accounts with a household balance over $500,000 qualify for the Schwab Money
Market Fund and other sweep money funds. Those under $500,000 will
have as their default money market the Schwab Bank Interest.
Please bear in mind that you have options for your uninvested cash in
your account. Schwab offers the non-sweep Schwab Investor Money Fund
(SW2XX) which you must actively buy and sell in your account. The
minimum investment is $2,500. This money fund is currently yielding 4.67%.
If the Schwab Investor Money Fund falls below $2,500, there is a $5 fee
per month. Another non-sweep money fund that you may consider is the
Schwab Value Advantage (SWVXX). This money fund requires a minimum
initial investment of $25,000 ($15,000 for retirement and custodial
accounts). This money fund is currently yielding 4.96%. If the Schwab Value
Advantage falls below $20,000 ($15,000 for retirement and custodial
accounts), there will be a $5.00 fee. To buy either of these money funds,
click on the "trade" Tab after you have logged into your account on the
Schwab Web site and then the "Mutual Funds" link just below."