Schwab money fund pays 0.45% ?

[workmyfingerstothebone]

Recently my sister asked for help on her portfolio, she is retiring.


I see she has a Schwab money fund that pays a paltry 0.45 percent .


I have Vanguard and their money market account is paying > 4 percent .


Does Schwab have another money market fund that pays closer to 4%.



Either I'm not reading Schwabs info correctly (could be as this is first time on the site) or they are behind the yield curve.


Thanks for any help.

[FREE866]

Quote:

Originally Posted by workmyfingerstothebone Recently my sister asked for help on her portfolio, she is retiring. I see she has a Schwab money fund that pays a paltry 0.45 percent . I have Vanguard and their money market account is paying > 4 percent (SEC 7 day yield). Does Schwab have another money market fund that pays closer to 4%. Either I'm not reading Schwabs info correctly (could be as this is first time on the site) or they are behind the yield curve. Thanks for any help.

Im doing this now....


Yes--the standard cash acct only pays like.45%
however you can sweep the money into their money market mutual fund---SNVXX which yields 4.11% or SWVXX which yields 4.38%...that one is more as it has international exposure....one day settlement on those....

[HF63]

Just do what FREE866 suggested, very crazy does how Schawb makes money.

[ShokWaveRider]

SNAXX - 4.61%
SWVXX - 4.46%

Having their sweep fund low enables them to be very aggressive on their MM funds.

[Chuckanut]

Quote:

Originally Posted by workmyfingerstothebone Does Schwab have another money market fund that pays closer to 4%. Either I'm not reading Schwabs info correctly (could be as this is first time on the site) or they are behind the yield curve. Thanks for any help.

An excellent start to helping your friend would be to follow the advice given earlier and get her into SNAXX or SNOXX, which currently pay over 4%. She would earn almost 10x more interest dollars with very little work. No need for anybody to work their fingers to the bone. How often does that happen?

[AzDreamer]

Is it possible to change the cash sweep so dividends and interest automatically go into one of their money market funds? I am online looking at my account and can't see how this is done.

[Andre1969]

Thanks for this post. One of my old 401ks is with Schwab. I never paid much attention to the "cash" portion of it but sure enough, it was earning almost nothing. So I moved the bulk of it into one of their MMAs. Probably still losing a bit compared to inflation, but it beats getting almost nothing at all!

[ShokWaveRider]

Quote:

Originally Posted by AzDreamer Is it possible to change the cash sweep so dividends and interest automatically go into one of their money market funds? I am online looking at my account and can't see how this is done.

I do not think so, but it is easy to do manually.

[target2019]

Quote:

Originally Posted by workmyfingerstothebone Recently my sister asked for help on her portfolio, she is retiring. I see she has a Schwab money fund that pays a paltry 0.45 percent . I have Vanguard and their money market account is paying > 4 percent . Does Schwab have another money market fund that pays closer to 4%. Either I'm not reading Schwabs info correctly (could be as this is first time on the site) or they are behind the yield curve. Thanks for any help.

This is the page for Schwab money funds. https://www.schwab.com/money-market-funds

You are looking at the sweep fund, which is much lower. Schwab does not have a default money market fund for the sweep account.

So my routine is to look at the account once a month, and but SWVXX if I have too much cash in the account.

You can also transfer sweep cash to a linked Schwab checking account and pay bills from there.

[target2019]

Quote:

Originally Posted by AzDreamer Is it possible to change the cash sweep so dividends and interest automatically go into one of their money market funds? I am online looking at my account and can't see how this is done.

Can't be done. Mark it up as a Schwab flaw.

Go in once a month, once a quarter, or whenever and use the money to buy, or transfer to checking.

https://www.schwab.com/money-market-funds

[OverThinkMuch]

For my safe cash reserves I prefer to stick with Treasuries, so I like SGOV 4.3%.
https://www.ishares.com/us/products/...asury-bond-etf

[Chuckanut]

Quote:

Originally Posted by AzDreamer Is it possible to change the cash sweep so dividends and interest automatically go into one of their money market funds? I am online looking at my account and can't see how this is done.

That is a sore point with many of us. You can't do it. I tranfser money to SNAXX or SNOXXZY or whatever fund, but you have to remember to move it back to the sweep before buying anything else. A bit of a pain.

[pb4uski]

Quote:

Originally Posted by Chuckanut That is a sore point with many of us. You can't do it. I tranfser money to SNAXX or SNOXXZY or whatever fund, but you have to remember to move it back to the sweep before buying anything else. A bit of a pain.

+1 but you don't need to move it to settlement before buying anything else. Often... but not always and I can't figure out why... you can buy securities online even though your settlement account is zero and those trades result in a negative settlement account balance. Then you just need to make sure that you sell SWVXX to cover the trade when it settles. If you can't do it online then you need to call your broker.

This happens often with new issue bonds, which can take up to 2-3 weeks between trade and settlement. I'll have a significant negative balance in my settlement account for that 2-3 week period. And then if some income is posted and I don't want it languishing in the settlement account at 0.45% I have to call to transfer it over to SWVXX... online will not allow you to buy SWVXX if your settlement account is negative, but you can do it if you call.

Luckily, at my transaction volumes this is a minor annoyance rather than a major PITA.

[Born2Fish]

Glad this topic came up.

I've been buying T-bills and reordering at maturity in one of my TDA accounts.

Just ordered SWVXX. Much easier.

[Rickt]

Does SWVXX have a redemption fee if sold before 180 days?

I see this disclaimer when I try to buy SWVXX:
"All no-transaction-fee (NTF) funds (except ProFunds, Rydex, and Direxion funds) held 180 days or less are subject to a short-term redemption fee of $49.99. This fee is in addition to any applicable transaction fees or fees addressed in the fund prospectus."

Thanks!

[ShokWaveRider]

Quote:

Originally Posted by Rickt Does SWVXX have a redemption fee if sold before 180 days? I see this disclaimer when I try to buy SWVXX: "All no-transaction-fee (NTF) funds (except ProFunds, Rydex, and Direxion funds) held 180 days or less are subject to a short-term redemption fee of $49.99. This fee is in addition to any applicable transaction fees or fees addressed in the fund prospectus." Thanks!

Google SWVXX and you get this:

Fees & Expenses
Front load N/A
Max. redemption fee N/A
Total expense ratio 0.11%
12 b-1 N/A
Turnover N/A

[audreyh1]

I haven’t held that fund at Schwab for a long time, but in general money market funds aren’t subject to holding periods and I can’t imagine why Schwab would display that message.

[youbet]

Quote:

Originally Posted by Rickt Does SWVXX have a redemption fee if sold before 180 days?

No

[11522914]

Quote:

Originally Posted by pb4uski And then if some income is posted and I don't want it languishing in the settlement account at 0.45% I have to call to transfer it over to SWVXX... online will not allow you to buy SWVXX if your settlement account is negative, but you can do it if you call.

This I did not know. Thanks for the information.

[Texas Proud]

Quote:

Originally Posted by Rickt Does SWVXX have a redemption fee if sold before 180 days? I see this disclaimer when I try to buy SWVXX: "All no-transaction-fee (NTF) funds (except ProFunds, Rydex, and Direxion funds) held 180 days or less are subject to a short-term redemption fee of $49.99. This fee is in addition to any applicable transaction fees or fees addressed in the fund prospectus." Thanks!

Maybe it is for people who buy a LOT of the fund... big inflows or outflows can mess up a fund...



Back when I was in corp trust I would buy between $200 mill and $500 mill for a week every month or so before payments... I had to keep the fund informed of when they were getting money and when I was gong to take it back...