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Etrade Cash Sweep Options. Etrade Money Market Fund, Brokerage Account Interest Rates.


2018 Etrade uninvested cash sweep account options (FDIC bank, money market fund, JUSXX, OGVXX) vehicle choice. Etrade brokerage\IRA account interest rates, insurance, and fees.



Etrade Cash Sweep Account Options


Investors at E*Trade have three choices when it comes to uninvested cash. The broker offers an FDIC sweep program, a money market mutual fund setup, and an SIPC option.

The FDIC sweep option is the default setup for the company’s brokerage accounts. Customers who live inside the United States or have a Social Security number are eligible to have funds swept into multiple banks. This policy results in an insurance limit five times higher than the government’s usual $250,000. Joint accounts actually get $2,500,000 of coverage.

Clients who live outside the U.S. or don’t have a Social Security number have their funds swept only to E*Trade Bank, which results in the normal level of FDIC protection. The bank sweep program currently yields just 0.05% on balances under $4,999, 0.07% on balances under $49,999, and all the way up to 0.45% on balances $500,000+ for all clients, both domestic and international.


Etrade Cash Sweep Interest Rates


The next option for free cash balances in an E*Trade securities account is to simply leave the money sitting in the account, which will result in SIPC protection up to $250,000. Keep in mind that doing so will eat away half of SIPC’s $500,000 total insurance for securities. Both domestic and international customers are eligible for this second choice. Like the FDIC sweep program, the current interest rate on the SIPC option is just 0.05% on balances under $4,999, 0.07% on balances under $49,999, all the way up to 0.45% on balances $500,000+. Given recent increases in interest rates, E*Trade’s rates are rather disappointing.


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Etrade Money Market Fund Rates


Traders who want a higher return can choose the third option, which is to pick a money market mutual fund to be an account’s core cash position. There are two funds available for self-directed accounts. Both of them are managed by JP Morgan. The US Government Money Market Fund (JUSXX) currently returns 1.31%, while the U.S. Treasury Securities Money Market Fund (HTSXX) produces the highest rate of 1.69%.

There is another fund, which ONLY managed accounts can choose. It is also from JP Morgan and yields a very attractive 2.13%. It is OGVXX, the US Government Money Market Fund. All of the broker’s money market choices come with SIPC insurance up to $500,000 instead of $250,000, because these funds are considered securities and not cash. Only domestic E*Trade clients can choose the money market option.


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Changing Etrade Cash Sweep Options


E*Trade has made it quick and easy to change how uninvested cash is invested. In the very top menu on the broker’s website, select ‘Customer Service’. On the next page, click on ‘Self Service’ and then select ‘Change / Update Uninvested Cash Option’ under ‘Cash Management (Deposits, Transfers and Withdrawals)’. Doing so will produce a new page with a drop-down menu of the available core position options. Select the one you want and follow the prompts.


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Etrade Cash Sweep Options Summary


Compared to other brokers, E*Trade does well in the number of cash sweep vehicle choices it offers, but poorly in its low rates.


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Updated on 11/7/2018.