Cash Management at Schwab

[youbet]

I loathe the TD Ameritrade sweep account. Yes, I can sell a money market, and then put in a trade, but I can't have limit orders on equities waiting for market drops, like I can over at Vanguard earning 4.5%. I am not thrilled with Vanguard's customer service.

I have been with TD (soon to be Schwab) a long time because of customer service, but will probably switch away from Schwab next year because of this.

Actually you can have limit orders on equities waiting for market drops without cash to cover. I have some open right now. If the limit order hits, sell the MMF the same day to avoid creating a margin loan.

Yeah, it's a pita (And I've arm wrestled with my rep at Schwab many times over it) but you can do it. When they first implemented the system, MMF rates were high and I bitched. Then when MMF rates were near zero, it didn't matter all that much. Now MMF rates are back up and I'm bitchin' again! But you geneally work around it.

 

[dmpi]

Adding to the confusion is I'm not sure exactly what time the Schwab day officially flips over. I think it's 12:00 midnight eastern time which is 9:00 PM pacific time but I'm not positive. Maybe someone here knows.

 

[target2019]

If I leave 10,000 in a low-interest sweep account for dry powder (or paying bills from checking) I lose the opportunity of earning $450 in interest over a year (4.5% SWVXX rate).

I don't mind looking twice a month and making decisions. I understand that there are better automatic options at Vanguard and Fidelity. In our Vanguard accounts we are automatically re-investing, so don't need the sweep there at all.

 

[youbet]

Adding to the confusion is I'm not sure exactly what time the Schwab day officially flips over. I think it's 12:00 midnight eastern time which is 9:00 PM pacific time but I'm not positive. Maybe someone here knows.

It depends for what purpose. For entering a sell order for your MMF to cover a purchase, it would be 4:30 PM Eastern, the standard US trading day.

 

[dmpi]

It depends for what purpose. For entering a sell order for your MMF to cover a purchase, it would be 4:30 PM Eastern, the standard US trading day.

I'm taking about the T+1 or T+2 timeline for trade settlement. Do I actually have to wait for 24 hours or does the clock flip over at a certain time?

 

[Texas Proud]

I know that this thread has a work around... but I am still miffed at Schwab having so low of a sweep account...



To me it is a 'gotcha' thing so they can make more money... it would be very easy to have the money swept to the higher interest account... heck, it should have a number of funds to choose from if someone wanted a gvmt fund etc...


Since I do not trade that much I will learn to live with it... but it will require me to remember to go in and move dividends whenever I get them...


BTW, I just noticed that my account has avg cost on sale of mutual funds!!! And to get it changed I have to fill out a PAPER form and send it in... REALLY?


And it also does not allow me to choose the shares I want to sell, it has LIFO, FIFO biggest loss etc., but not specific lot? what the heck?

 

[PaunchyPirate]

I know that this thread has a work around... but I am still miffed at Schwab having so low of a sweep account...



To me it is a 'gotcha' thing so they can make more money... it would be very easy to have the money swept to the higher interest account... heck, it should have a number of funds to choose from if someone wanted a gvmt fund etc...


Since I do not trade that much I will learn to live with it... but it will require me to remember to go in and move dividends whenever I get them...


BTW, I just noticed that my account has avg cost on sale of mutual funds!!! And to get it changed I have to fill out a PAPER form and send it in... REALLY?


And it also does not allow me to choose the shares I want to sell, it has LIFO, FIFO biggest loss etc., but not specific lot? what the heck?

Perhaps you’d be happier if you moved your account elsewhere.

On Friday, I submitted the form to change my mutual fund cost basis selection to Specific Identification and to use the Tax Lot Optimization method. I believe it will take a few days to be processed. This should then match the way stocks and ETFs are set up.

I’m hoping that will let me sell specific lots of a mutual fund that I select. I say this because for stocks (which are set up this way), I can can click on a link that pops up my lots and allows me to pick the ones I want to sell. This is done from the order entry screen. I’m hoping once the settings are changed, I will have the same capability for my mutual funds. Time will tell.

 

[youbet]

I’m hoping that will let me sell specific lots of a mutual fund that I select. I say this because for stocks (which are set up this way), I can can click on a link that pops up my lots and allows me to pick the ones I want to sell. This is done from the order entry screen. I’m hoping once the settings are changed, I will have the same capability for my mutual funds. Time will tell.

Is it correct that once you sell some shares of a MF using average cost basis, you are no longer allowed to go back to identifying individual lots. Or, can you mix it up as you go along?

 

[PaunchyPirate]

Is it correct that once you sell some shares of a MF using average cost basis, you are no longer allowed to go back to identifying individual lots. Or, can you mix it up as you go along?

I’m no expert, but I believe that once you sell at average cost, this sets the average cost value for all shares you own at that point. Those are locked at that cost because they contributed to the average you just decided to use.

If you then buy new shares of the same holding, those can be sold with a different basis method such as specific ID.

 

[youbet]

^^^^^^

Thanks! I also managed to find some info myself (excellent work for a geezer!). From Schwab:

For mutual funds, you can also use a method called "average cost, single category," which determines your cost basis by taking the average cost of all the shares you own and multiplying it by the number you're selling.

This may be the simplest way to handle mutual fund sales when you're reinvesting dividends and/or regularly adding to your holdings. However, it comes with a major downside: If you choose it for your first sale, you must continue to use this method for every subsequent sale of shares acquired before that sale date.

https://www.schwab.com/learn/story/... options for mutual,the number you're selling.

 

[Tranquility Base]

Well, that's not quite true. SWVXX settles in a day. Just about anything you'd want to buy also settles in a day. The money from the SWVXX sale will be in the account at settlement if you do both the same day.

I clarified that a previous post, #15.

 

[Texas Proud]

Perhaps you’d be happier if you moved your account elsewhere.

On Friday, I submitted the form to change my mutual fund cost basis selection to Specific Identification and to use the Tax Lot Optimization method. I believe it will take a few days to be processed. This should then match the way stocks and ETFs are set up.

I’m hoping that will let me sell specific lots of a mutual fund that I select. I say this because for stocks (which are set up this way), I can can click on a link that pops up my lots and allows me to pick the ones I want to sell. This is done from the order entry screen. I’m hoping once the settings are changed, I will have the same capability for my mutual funds. Time will tell.

Guess you did not read that I just moved assets to Schwab..


Still does not prevent me from complaining about them when I find out something else that I do not like...

 

[target2019]

So, one either reads threads here and elsewhere and finds out about cash management at Schwab, or you discover it later. Or maybe you don't discover that, or don't even care?

Automatic re-investing of dividends is the first line of defense.

The next line is to go in and re-invest the cash however you like.

And then we have greedy peeps like me who move just enough from cash sweep to checking, and rub my neck and write 'em a check!

"You can't always get what you want," it has been sung. For instance, complaining here about Schwab, Fidelity or Vanguard will never impact the institution. You won't get the feature. But you do hear from others about how to manage your money, for sure.

There are work-arounds for many things, but if you need a feature that isn't available, the answer is to transfer out.

 

[Tranquility Base]

...

"You can't always get what you want," it has been sung. For instance, complaining here about Schwab, Fidelity or Vanguard will never impact the institution. You won't get the feature. But you do hear from others about how to manage your money, for sure.

There are work-arounds for many things, but if you need a feature that isn't available, the answer is to transfer out.

Thanks for your comments!! I have reread them several times as I have been thinking (just thinking, not reconsidering) about my decision to transfer my accounts to another brokerage. They helped gel a lot of separate things that were bouncing around inside my head. That wasn't my favorite Rolling Stones song, by the way, but the quote was certainly spot on in this context.

 

[target2019]

Thanks for your comments!! I have reread them several times as I have been thinking (just thinking, not reconsidering) about my decision to transfer my accounts to another brokerage. They helped gel a lot of separate things that were bouncing around inside my head. That wasn't my favorite Rolling Stones song, by the way, but the quote was certainly spot on in this context.

Well then, "She would never say where she came from. Yesterday don't matter if it's gone."

You could substitute "money" for "she" and have a nice laugh, too.

Take care, and enjoy.

 

[Doc0]

I like Fido. As soon as I sell something it's sold and the dough is available without delay. I also like their tax forms.

 

[Tranquility Base]

I like Fido. As soon as I sell something it's sold and the dough is available without delay. I also like their tax forms.

I like Fidelity too and I think they were the first brokerage account I tried to open three weeks ago when I was evaluating which brokerage to transfer my accounts too. It has a good reputation and gets good reviews here.



But my experience was the complete opposite and was basically a small nightmare. I don't know why I persisted other than out of curiosity to see just how screwed up it could be and how bad the customer service could be. I finally gave up. I am keeping my account there for reference and potential future use. But at this point I am not brave enough to transfer any of my brokerage and retirement accounts there.


I am guessing I just never connected with someone who knew what they were doing and would take the time to answer my questions. I kept asking but didn't receive a response. I managed to get the statements for my current accounts reviewed very quickly to see if there would be any assets which would be problematic. That was very helpful and much appreciated. But beyond that, no one seemed to want to do anything. I am glad that everyone who does business there and likes Fidelity is having a good experience. That just wasn't my experience for whatever reason.

 

[Texas Proud]

Not sure if this is a Schwab issue or my computer in some way...


When logging onto Schwab my password does not appear like it does on all other accounts... I do not remember hitting anything saying not to remember it.. SOOO, every time I log in I have to type my password... I am thinking it is a Schwab issue...


Another complaint... got a statement from them and as a first blush I am not a great fan of it... I will have to review it a bit and might change my mind..


Have moved about half my assets to them... going to check with Fidelity to move most of my other assets... their cash interest rate is better... and yes I know I can buy a better rate but I am lazy and want THEM to do it for me

 

[Car-Guy]

Not sure if this is a Schwab issue or my computer in some way...


When logging onto Schwab my password does not appear like it does on all other accounts... I do not remember hitting anything saying not to remember it.. SOOO, every time I log in I have to type my password... I am thinking it is a Schwab issue...


Another complaint... got a statement from them and as a first blush I am not a great fan of it... I will have to review it a bit and might change my mind..


Have moved about half my assets to them... going to check with Fidelity to move most of my other assets... their cash interest rate is better... and yes I know I can buy a better rate but I am lazy and want THEM to do it for me

I never have to re-enter my password. That would be a PIA. Try deleting your browsers autofill entry for Schwab and then log back in manually and see if it picks up both the ID and PW. Or maybe try a different browser and see what happens. I use Firefox and it works fine. Or call their IT customer service folks, they are excellent.

I quit paper statements years ago. Everything I want/need is on line and I can print it off if needed. Which is rare. No problems at all for me but of course YMMV.

 

[Texas Proud]

I never have to re-enter my password. That would be a PIA. Try deleting your browsers autofill entry for Schwab and then log back in manually and see if it picks up both the ID and PW. Or maybe try a different browser and see what happens. I use Firefox and it works fine. Or call their IT customer service folks, they are excellent.

I quit paper statements years ago. Everything I want/need is on line and I can print it off if needed. Which is rare. No problems at all for me but of course YMMV.

That is the thing... no autofill in Firefox... it has never asked me to save anything... looked and there is NO entry for Schwab... tried to see if there was an exception... nope.. I do have remember me clicked but that does not do password...


Redid the whole thing and again no option to save..


It appears to save it on Edge...

 

[OldShooter]

... When logging onto Schwab my password does not appear like it does on all other accounts ...

Wow. I would never even consider autofilling UID or PW for any financial/bank web site or app. Each one has different passwords, too.

 

[Car-Guy]

That is the thing... no autofill in Firefox... it has never asked me to save anything... looked and there is NO entry for Schwab... tried to see if there was an exception... nope.. I do have remember me clicked but that does not do password...


Redid the whole thing and again no option to save..


It appears to save it on Edge...

Try re-loading/installing a new copy of Firefox.

 

[jldavid47]

That is the thing... no autofill in Firefox... it has never asked me to save anything... looked and there is NO entry for Schwab... tried to see if there was an exception... nope.. I do have remember me clicked but that does not do password...

Redid the whole thing and again no option to save..

It appears to save it on Edge...

Frankly, I think it's a bad idea to use autofill for financial websites. It's much safer to use a separate password manager. However, you can add the entry to Firefox if you want.

Go to Settings -> Privacy and Security -> Saved Logins

Above the list of saved logins there is a Search Bar with a "+" next to it. You can hit that to add a new saved login.