Schwab Is Costing You THOUSANDS In 2024 and You Don't Even Know It
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- Опубликовано: 7 ноя 2023
- You may not be aware that Charles Schwab will start costing you thousands if you don't pay attention to the money in your Sweep account. Right now interest rates are high enough so that you can make money in money market funds like SWVXX paying over 5% interest!
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8:00 This is not true. All you have to do is put a sell order of SWVXX or other Schwab money market fund. Then you can use that money to trade immediately even though that sell order won't get filled until the end of day. You definitely don't need to wait for sell order to settle the next day.
Holy crap… I gave it four minutes and you still didn't make a point
TLDR: Dont keep uninvested money in Schwab. If you have any uninvested money, move it to brokerage that offers high interest rates.
And what brokerage is that @@fantasyrookie8757
Thanks. He sounded like an advertisement
Thanks for the warning. Skipped to 4min.
Lol I can't help but feel that energy is counterproductive to success.
Moral of the story-don’t sit on your cash in your Schwab account. Reinvest it into a fund, HYSA, or something drawing more interest.
Yes, I did! Is there an expense ratio on the SWVXX? I thought it said 3.5 but I could be wrong an am trying to figure out if there is one.
Initially i didnt know but was made aware about this 3 months ago. I also recently just found out that when u sell a cash secured put, the money that schwab holds u can still put in a money market account. I sold 2 Jan 2025 puts with a $25 strike price totalling 5000 on hold and the money on hold is inside a money market account basically for a year. So not only did i get premium for selling the puts i also collect interest on the 5k.
I've sat & wished for the LONGEST time that I could do that with the set-aside cash from shorting options!! I've got $50K just sitting there not working for me like it could be. I guess I was a victim of my own assumption. Did you have to call in and have them trade into a MMF for you or were you able to do it yourself?
@itsnunyabidness1225 By myself. I actually rolled them to 2026. So the 5k would be collecting passive income for close to 2 years. Schwab's mmf is pretty liquid plus u can do it with the click of a button
Nice laptop! It looks like an HP EliteBook 850/860. Is it G8 or G9?
Thanks! Actually it's an HP Envy!
Thanks for the reminder. I recently sold off some positions and have cash doing nothing in my CS account. Putting it into SGOV for now.
I felt exactly how you felt. I should’ve checked and disappointed with Schwab. Thanks for sharing!
For extra income, my son sells cash secured put options in his Schwab account against cash in the sweep account or in the SWVXX money market fund. Of course he keeps the bulk of his cash in SWVXX to earn the higher 5% rate.
I used SNSXX in my taxable account - treasuries aren't taxed in my state and given my state tax rate the net I'll keep is higher. (Schwab doesn't have a state muni fund for me.) If in a margin account you don't have to wait to sell the MMF before you trade - sell it the same day and it will settle in time to avoid margin interest.
Interesting, @Sylvan_dB . I didn't know that about margin accounts with Schwab!
Can you explain how Margin Interest would work for this type of trade? What if you wanted to just park money in the account and hold it but have enough cash to cover? Could you then use the remaining money on Margin to Trade?
@@joestutzke4511 I'm not entirely clear on what you are asking. If you wonder if you can leave money in the fund and trade on margin, yes you can. I do that. (Schwab will not automatically sell the MMF, at least not on new personal accounts. web page docs indicate some old or managed accounts might be set up to auto-sell.)
Duh. In addition to MM funds, there are plenty of liquid ETFs that hold treasuries, etc. that are an easy work around for this. This content could be covered in 2 minutes or less.
sgov is a good place to park cash low expense ratio and no state tax.they just paid 0.4581 dividend.
Jeez. All mine and kids investment accounts are with Schwab. Thanks Robbie
Hey @lasercooper! Ya Schwab is fantastic…just gotta pay attention to that sweep account!
So I’m lost! Could you please help me to understand? I’m new to this and have heard Schwab US Treasury fund is the best way to make some money out of what you have bc of their great percentage. Is that right? What’s the difference between Fidelity and Schwab in this case? Thank you😊
Any thing is better than the sweep account at .48 percent what we all want is a sweep account paying a higher interest why because when we sell it goes directly to your sweep making a decent percentage we may have limit orders on that may hit one two three,months from now Schwab is taking your sweep money and collecting the arbitrage between the sweep and the money market they don’t have your best interest at heart there making money and hoping you will fall asleep and let you money sit there while they collect times this by let’s just say a lot of people I am stuck here through a work place plan I will be leaving to fidelity there is a lot to like about Schwab but this is shady and you must keep and eye on them to answer your questing about the treasury fund it could be good I would look at the fees and your tax management plan if you have it in traditional ira your withdrawals will bee taxed at ordinary income you might do better using these in brokerage account speak with your advisor for account location 😊
Thank you Robbie..I saw fidelity giving 4.78% . It didn't click in mind that something is wrong . No interest from Charles uncle 🙂
What about the july 2024 reports that are saying stocks like MRNA. PARA. BBY. SQQQ Will skyrocket by end of year 2024❤
i guess you could say Schwab is taking your cash and 'sweeping it under the rug'
🤣🤣🤣
Unless you have that money in your pocket, someone is making money off of your money.
Thank you my friend. I fell asleep with RUclips playing in the background (on my tv) and I woke up to your video. I watched it three times and now I just went into my Schwab account and purchased the SWVXX. Thank you for the information!!
I share your frustration. I don't see why we can't authorize them to use a specific Schwab money market account to fund stock purchases. That would be good customer service.
Thanks Robbie, I'm new to all of this, but if I'm understanding this, money sitting in a Fidelity "sweep" account, is earning interest at Fidelity?
Hi Michele! Yes earning interest in their Fidelity money market fund. Or in a partner bank. Depending on account. For example an Ira account, brokerage acct. etc. . 👍
Thanks
Nice Video not sure you need music playing in the background ( I dont know though does having music in your videos generate more money you earn from youtube ? ) Any way I find it distracting when trying to pay attention to your Important info. At least you lowered the volume some times when you would speak. I wish RUclips had a toggle switch to eliminate background music in videos.
No. Bank accounts are not insured.
This is a click bait video. And not even a good one. Bottom line: If you want to keep cash in Schwab, put it in their money market funds, don’t just leave it in your cash sweep.
As I understand it, you are doing your own investing at no charge by Schwab other than the expense ratios that are associated with a particular fund or eft that you choose to allocate to. You have all the tools and resources available to you that Schwab offers at no charge. Schwab does have broker assistance if you need it. With a fee naturally. Then you would be notified if there is a better alternative during changing markets. Maybe that would be a better alternative for you, given your complaint to a free platform.
You're losing out in the intrest because it's in a real FDIC insured bank account.
This is true 👍
I created 4 Schwab accounts with specific goals for each. A car fund, retirement house fund, Roth IRA and emergency fund. I created the emergency fund account January of 2023 and started buying 3-month T-bills when they were around 4.5%. As I added money I would buy a 3-month T-bill when I could afford to buy 10 T-bills. Any cash not used would go into SWVXX. I created a T-bill ladder where I have at least 2 to 4 T-bills a month and roll those into another 3-month T-bill. A couple times I purchased a 3-month CD. It would depend on the interest rate I would be able to collect for the day I was making the purchase. Interest from the T-bill/CD goes into SWVXX. I do the same thing with Fidelity. However, the majority of my emergency funds are with Schwab.
Can't make heads or tails out of what your rant is.
Interest rate on your cash is 9 times higher in Fidelity and Vanguard than Schwab.
Ha! Same.
It was clear to me!
Been with Schwab for 6 years. Retired at 44 trading with multiple accounts/IRA ..Etc...never had any issues until the last the last TOS outage. Lost over 12k due to the swing trade, but I have made over 7 figures, so oh well ...😊
I saw a different clip that said the same thing about Schwab. So, basically they're treating us like the sleazy banks? We shouldn't have to ask them to give us a higher rate. I'm going to check out Fidelity. It seems like they have our backs a little better than the greedy uncle...
To the point
What about the Cash in their Intelligence Portfolio Roth IRA
so just move your money from the sweep to the swvxx?
That takes a full business day during which time you can't use the money for ANYTHING. If you're unlucky enough to have moved your money after 4 pm it requires 2 days before you can use it. I've missed trades because of this.
Trade CD's on the platform....not MM...
Don't get me wrong, brotha. I dig Quincy Jones and all. But the music overlay in this video is too distracting! (@ 1:48) Otherwise, good show, man...👍🏾👍🏾
If your account is a Roth IRA then that Money Market account is tax free.
Thanks to your very informative video, I moved everything out of Schwab and over to Fidelity!
Going to do the same here.
I had fidelity for over 25 yrs. They Were even worse. From high fees to crappy customers no service.
GET TO THE POINT
Patience is a virtue. 😉
I also put some cash in SWVXX!
Nice! Were thinking alike!
Same here for my taxable brokerage account. Too much easy money to pass on it.
Yes, True!
I didn't even realize it was 2024!
watch to the end
If you're self managing your investments and have a significant Schwab bank sweep balance they you best find an advisor because you aren't doing a good job. We're with Scwhab but our bank sweep account is minor and we keep it that way either via investments or transfers to one of their competive money market funds.
Is this an ad?
Hes created a hit piece, for some unknown reason he's trying to trash C.S... they must be charging him fees 😅😅 i do see ur point, but its not a problem, you had ur money in the bond fund.
You have some, um, opinionated folks in the comments. I guess negative comments are still great for the YT algorithm!
Thanks for the video. It's good info to know. Maybe some of these folks will grow to appreciate your creative format.
I know right? Interesting comment section for this video. Not sure what happened here. But thanks for appreciating the creativity. Trying to make better content!
This is a shameful practice which Schwab should correct immediately. If other brokers are providing higher interest on their sweeps then Schwab shold fall in line and not be so rapacious.
thanks for the 411!
lol use there chart and trade on vanguard
False - Fidelity sweep acct pays the same - trash
zzzz get to the point. 4 minutes into this video and I have no idea how Schwab is screwing me.
Are you serious? We've been going crazy about raising interest rates for over a year and you didn't check what your money is worth in your account?????? IBKR has been paying my cash with a juicy % (now 4.83%) since the first day rates went up.
Unfortunately….yes I’m serious 🤪
A long video stating you didn't read the disclosure. It is all on you jethro
You have no idea what you’re talking about. Charles Schwab checking, savings, and investor checking accounts ARE NOT HYSA. Now if you’re investing in their Intelligent Portfolios, the cash inside of your portfolio earns a VERY ATTRACTIVE interest rate (currently between 4.3% and 5%), which is very competitive with any HYSA out there. Terrible video.
Man i have all 3 brokerage and only Schwab isn't automatically placing your money in Market fund, Fidelity and Vanguard do, i moved my cash 50 / 50 between Fidelity and Vanguard
And at Fidelity, even if you do not use a "core" money market fund, you can manually buy any money market fund and set Fidelity to automatically sell it if needed to settle a trade or allow a withdrawal.
I think a lot of people are leaving money on the table!
@@RobbieMoney i think so as well, people don't know, Thanks for the video
I realized this last year and immediately transferred my $ mid 7 figures to fidelity. Schwab is greedy, I will not do business with them on principal
And you probably have well over the FDIC limit anyway and want to maximize the yield on your cash. 👍
Hi, no offense, but I am trying to listen to this but the music is just too loud/distracting.
No offense I’m happy for the feedback 🙂. Curious so I know when editing…did you watch with headphones (noise canceling) or with a phone speaker?
Im on my iPhone no headphones and have to agree. The music is drowning out your voice. Still great content.
Thanks for the feedback! 🙂
Another great video. Glad I don't have a Schwab acct.👍
You made me lose money because I could have been researching a trade instead of listening to this claptrap.
"Maybe I'm The Only One?" YES! YES YOU ARE THE ONLY ONE WITH 7 THOUSAND DOLLARS IN AN INVESTMENT ACCOUNT AND NOT INVESTED 😳
Get to the point!
Recently had my accounts transferred over from another broker. Needless to say, not impressed with Mr Charles at all. Giving it 6 months
Ahhh too bad! I do like Schwab but just hate that sweep account.
From TD Ameritrade? I consider Schwab an upgrade in most areas. The sweep account is actually 0.10% better than what TD Ameritrade was paying!
Took 7 minutes to say “make sure you place trades with your cash available once it’s transferred”. Click bait build up to nothing.
When a videos’ title and thumbnail say the thing that is explained in the video it’s by definition NOT clickbait. I both reveal why it can cost you thousands AND what to do about it. Say you didn’t like the video that’s fine. But calling it clickbait is false.
Get to the Fing point already. Why do you talk so much. Maybe people will sub if you fix this, otherwise we re here just for this video from search and never back again.
Sounds like a woman, rant rant rant, why not straight to the point?????
Schwab sucks.
Schwab is a snob. Schwab isn’t in it for you.
Clickbait! Don’t watch! Literally rants about nothing!
zzzzzzzzzzz
you talk too much
I’ll be sure not to talk in the next video. 🫡
@@RobbieMoney direct and to the point, well done