These will not be FDIC-insured and carry a bit of duration risk, but if your ETF holds T-Bills then those are also fully backed by the US government.
#Bank of america sweep account free
You can also use your free stock trades to buy an ETF that is close to cash (ultra-short duration, high-quality bonds). There are also some additional federal and/or state tax-exempt municipal money market fund options at the very bottom.īuying an outside ETF. US Treasury interest is exempt from state and local income taxes. Finally, note that these options are for taxable brokerage accounts. You’ll have to coordinate settlement times. The system won’t be able to automatically sell your fund. This also means that if you want to for example buy new shares of stock, you would need to first put in an order to sell your money market mutual fund shares into cash (in order to have the funds available to buy that stock). SEC yield of 4.24% as of 2/7/23.Īgain, these money market mutual funds can’t be set as an automatic sweep you must manually move money in and out of the product.
To initiate this option, you must put in $100,000+ buy/sell order over the phone, with same day settlement if the trade is placed by 5pm Eastern Time. However, this is not a sweep (nothing goes in or out automatically). However, once you establish that $100,000 position, you can then go below that amount while still maintaining future access (subsequent transactions have a $1,000 minimum). In order to use this option, you must open it with at least $100,000 in cash. As of 2/7/23, it is a much more competitive 4.24% APY. You’ll note the highest rate is something called “Preferred Deposit”.
#Bank of america sweep account pdf
The first page of the rate PDF only includes FDIC-insured options. The good news is that there are some other options available if you are willing to do a bit of work. The bad news is that you can’t change it to automatically sweep to anything else right now. Your default cash sweep interest rate is the one for “Merrill Lynch Bank Deposit Program – Tier 1 (<$250,000)". Right now it links to this PDF.ĭefault cash sweep. You can always check current interest rates by scrolling to the bottom of any Merrill Edge page and clicking on the blue link “Deposit Account & Money Fund Rates”. This is a bit tedious, but most of my cash shows up during quarterly dividends.Ĭurrent rate sheet. Then I simply initiate (“pull”) money out via a high interest savings account.
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If you have a BofA checking account, you can perform instant transfers from your Merrill Edge cash balance into your BofA account. Here is a summary of all the options available if you do want to keep your cash there. However, if you are motivated enough (as my readers tend to be), then you can stay at Merrill Edge and still do a lot better. Not very customer-friendly, but there it is. They seem to have learned from Bank of America that lots of people don’t pay attention and they can earn a lot of easy profits paying 0.01% APY when everyone else is paying 4%+. Unfortunately, the interest rate paid on their default cash sweep option is horrendous. They are a decent broker overall, but honestly the only reason I keep my account open with them is to qualify for their Preferred Rewards Platinum tier, which allows me an effective 2.6% cash back credit card (offsets any travel purchase) as long as I maintain a Merrill Edge brokerage account with at least a $100,000 balance (even if just buy-and-hold Vanguard ETFs). Merrill Edge is a self-directed brokerage arm of Bank of America and Merrill Lynch.
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