Introduction to cash solutions

Introduction to cash solutions

Schwab offers a wide spectrum of cash solutions which offer attractive yields and smart features.

Cash investments can easily be converted to cash. They offer options for liquidity, fixed or variable yields, and eligibility for Federal Deposit Insurance Corporation (FDIC) coverage or Securities Investor Protection Corporation (SIPC) coverage. They provide returns in the form of interest payments or dividends and are typically lower risk than other investment options. However, they also typically offer a lower return.

Schwab divides cash needs into two categories: savings and investment cash and everyday cash.

Savings and investment cashA range of competitive products that earn a potentially higher yield, help your clients preserve principal, and provide easy access to their funds.
Everyday cashCash products that are ready for use to purchase investments, such as stocks and bonds, and are also available for paying bills and expenses.

Note: Refer to the Cash Features Program Disclosure Statement for more information on the cash features available to each account type.

Products offered through a Schwab Brokerage Account

Savings and investment cash

Schwab Money Funds offers taxable or tax-exempt income while providing stability of capital, liquidity, and current income for your clients. (Tax-exempt funds may be subject to state, local, and the Federal Alternative Minimum Tax. Capital gains are not exempt from Federal taxes.)

Schwab Money Funds offer:

  • Convenient access to potentially higher yields on cash
  • Investment minimums starting at $0††
  • No transaction fees (fund expenses and other fees may apply)
  • Next-day access to funds if shares are sold by 4 p.m. ET.

Schwab Money Funds transact like regular mutual funds and must be bought and sold in order to access funds for trading or purchases.†† Money market funds held in an SIPC-insured Schwab One accounts are eligible for SIPC coverage.§§ * They are not FDIC insured.

For clients who can lock their cash in for a specific term, purchasing FDIC-insured Certificates of Deposits (CDs) through Schwab CD OneSource® Tooltip allows them to protect their principal and generally earn a fixed rate of return.‡‡ Current FDIC coverage insures each individual bank up to $250,000 per depositor. Because we offer CDs from a variety of institutions, one strategy to keep more money insured is to buy CDs issued by multiple banks through Schwab CD OneSource® Tooltip .††† For clients who need to sell their CDs before they mature, Schwab may maintain or otherwise provide access to, but does not guarantee, a secondary market (fees may apply). However, clients may receive less in sale proceeds than the original principal amount of the CD or the estimated price in their account statements. 

Everyday cash
  • The Bank Sweep1feature is the sweep feature for the majority of domestic brokerage and IRA accounts. It allows uninvested cash to earn interest, while remaining ready for purchasing investments. With the Bank Sweep feature, free credit balances are automatically swept from a client's brokerage account to one or more FDIC-insured banks to earn interest. Funds deposited at Program Banks are insured, in aggregate, up to $250,000 per Program Bank, per depositor, for each account ownership category, by the Federal Deposit Insurance Corporation (FDIC)2
  • The Schwab One®Interest feature pays interest on uninvested cash in a brokerage account. This feature is available to non-retirement accounts and eligible for SIPC insurance. 
  • The Money Fund Sweep feature automatically sweeps any uninvested cash balances in the account into the Schwab Government Money Fund—Sweep Shares (SWGXX). Similarly, when your clients purchase other investments or withdraw funds from the account, shares of the sweep money fund within that account will be automatically sold to cover those transactions. New enrollments into the Money Fund Sweep feature are limited to certain Schwab Charitable accounts, Schwab Managed Accounts, and certain existing ERISA plan[s].

In addition, a Schwab brokerage account offers various features such as:

  • Schwab One Visa® Platinum Debit Card with unlimited ATM fee rebates worldwide and no foreign transaction fees§
  • No opening or maintenance fees (other charges may apply) 
  • Free standard checks (limited styles)

 

Products offered through Charles Schwab Bank

Savings and investment cashSchwab Bank Investor Savings™ offers a competitive yield regardless of your clients' balances. It has no minimum balance or monthly account service fees and provides for easy transfers to your other Schwab Bank and Schwab brokerage accounts. It is eligible for FDIC-insurance up to $250,000 per depositor.
Everyday cashSchwab Bank Investor Checking™ offers a competitive yield and easy transfers to a linked Schwab One® brokerage account*. It offers rich features such as a Schwab Bank Visa® Platinum Debit Card with unlimited ATM fee rebates worldwide and no foreign transaction fees§, no monthly service fees and no account minimums, free standard checks (limited styles), free bill pay on Schwab.com and Schwab Mobile*** and mobile wallets such as Apple Pay®, Google Pay, and Samsung Pay® ****. It is eligible for FDIC insurance up to $250,000 per depositor.

 

1. Bank Sweep is the cash feature for most new accounts. Schwab One Interest and Money Fund Sweep feature are two additional cash features available to certain accounts. Please note, Schwab One Interest and the Money Fund Sweep feature are not FDIC-Insured.

2. Bank Sweep deposits are held at one or more Program Banks. Funds deposited at Program Banks are insured, in aggregate, up to $250,000 per Program Bank, per depositor, for each account ownership category, by the Federal Deposit Insurance Corporation (FDIC). Brokerage products and services (including unswept or intra-day cash, net credit or debit balances, and money market funds) offered by Charles Schwab & Co., Inc. (Member SIPC) are not deposits or obligations of the Program Banks, are subject to investment risk, are not FDIC insured, may lose value, and are not Program Bank-guaranteed. Charles Schwab & Co., Inc., Charles Schwab Bank, SSB, Charles Schwab Premier Bank, SSB, and Charles Schwab Trust Bank are separate entities and are all affiliates of The Charles Schwab Corporation.

*The Schwab Bank Investor Checking™ account is available only as a linked account with a Schwab One® brokerage account. The Schwab One brokerage account has no minimum balance requirements, no minimum balance charges, no minimum trade requirements, and there is no requirement to fund this account when opened with a linked Investor Checking account. To learn more about other Schwab Bank checking accounts, please contact Schwab Bank at 888-403-9000.

†Funds deposited at Charles Schwab Bank, SSB, are insured, in aggregate, up to $250,000 based on account ownership type, by the Federal Deposit Insurance Corporation (FDIC).

‡Unlimited ATM surcharge rebates apply only to cash withdrawals using the Schwab Bank Visa® Platinum Debit Card at any ATM where it is accepted. ATM surcharge rebates do not apply to any fees other than surcharges assessed for using an ATM to withdraw cash from your Schwab Bank account. See the Schwab Bank Deposit Account Pricing Guide or (specific schwab.com link) for additional terms and conditions. Schwab Bank reserves the right to modify or discontinue the ATM surcharge rebate at any time.

§If you use your Card to withdraw foreign currency from an ATM, or to pay for a purchase with foreign currency, Schwab Bank charges your account for the U.S. dollar equivalent of the transaction. Depending on the specific arrangements that are in place, the exchange rate will be determined by the bank at which you conduct the transaction, the network to which the ATM belongs, or Visa.

***The Schwab Mobile Deposit service is subject to certain eligibility requirements, limitations, and other conditions. Enrollment is not guaranteed. Standard hold policies apply. Requires a wireless signal or mobile connection. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons. Functionality may vary by operating system and/or device. Mobile carrier data charges may apply.

****Use of your card through a mobile wallet is also subject to the terms and conditions of your Schwab Bank Deposit Account Agreement (which contains information on any potential liability for unauthorized transactions), your Visa Debit Card Agreement, the terms and conditions of the mobile wallet you use, the privacy policy set forth at Schwab.com, and the privacy policy of the mobile wallet you use.

††Investor Shares of Schwab Money Funds have no initial investment minimum; however, Schwab systems require a minimum of $1 per trade. The Funds' Ultra Shares have a minimum initial investment of $1,000,000.

‡‡CDs from Schwab CD OneSource® are issued by FDIC-insured institutions and are subject to change and system access. Funds are FDIC-insured up to $250,000 per depositor per insured institution, based on account ownership type. Visit www.fdic.gov for details. For most CDs, there are no additional commission charges when you buy a CD through Schwab CD OneSource. However, Schwab will usually receive a placement fee from the issuing institution in connection with the purchase of a CD, and there may be costs and market value adjustments associated with early redemption. Certificates of deposit available through Schwab CD OneSource typically offer a fixed rate of return, although some offer variable rates. The Annual Percentage Yield (APY) quoted is current as of the date shown and pertains to terms ranging from 3 months to 1 year. The minimum quantity is generally $1000 face amount, but may vary by offering. CDs may be subject to an early withdrawal penalty.

†††Funds deposited at an FDIC-insured institution are insured, in aggregate, up to $250,000 per depositor, per insured institution based upon account type by the FDIC. The FDIC considers any other deposits you may have with an issuing bank. CDs you purchase from a particular bank are aggregated with any other deposits you may have with the issuing bank for determining FDIC insurance coverage. Because the deposit insurance rules are complex, you may want to use FDIC’s online tool, Electronic Deposit Insurance Estimator (EDIE), to estimate your total coverage at any particular bank.

§§Charles Schwab & Co., Inc. is a member of the Securities Investor Protection Corporation (SIPC), which provides up to $500,000 (including $250,000 for claims for cash) of coverage when aggregated with other securities and cash held by you in the same capacity at Charles Schwab & Co., Inc. Money market mutual funds custodied at Schwab are considered securities for SIPC purposes. SIPC insurance offers protection in the case of your brokerage firm's insolvency. It does not provide coverage for loss of principal due to market loss.

For additional information about cash products and investment yields refer to the following:

Products at a glance
See Schwab Money Funds for available cash investments.

Cash investment yields
For seven-day effective yield, current seven-day yield, and operating expense ratio (OER) interest rates, refer to Cash Investment Yields found on Schwab Advisor Center® > Research tab.

The following are available to assist you:

How to trade equities, mutual funds, and options through the Web Trading platform
How to trade fixed income securities
Introduction to general trading
Introduction to Schwab Alliance
Introduction to Schwab Bank Investor Checking™ accounts
Introduction to Schwab One accounts

Participants should consult with their tax advisor if they have any questions about tax implications.

Order prospectuses in Schwab Advisor Center > Research > Mutual Funds Order Prospectus or by calling your service professional.

For important disclosures and eligibility rules for various alternatives to earn income on cash, see Schwab's Cash Features Program Disclosure Statement.

For more information about Schwab banking services for your clients, see Banking and lending services for your clients.

For important information about CDs, see the Certificate of Deposit Disclosure Statement.

For more information on available money market funds, see Schwab Money Funds.

Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges, and expenses. You can view and download a prospectus by visiting www.schwabassetmanagement.com/prospectus. Please read it carefully before investing.

Charles Schwab Bank, SSB, Charles Schwab Premier Bank, SSB, Charles Schwab Trust Bank, and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Deposit products and services are offered by Charles Schwab Bank, SSB, Charles Schwab Premier Bank, SSB, Charles Schwab Trust Bank, Members FDIC. Lending products and services, including the Pledged Asset Line, are offered by Charles Schwab Bank, SSB, Member FDIC and an Equal Housing Lender.

You could lose money by investing in the Schwab Money Funds. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. Because the share price of the Schwab Variable Share Price Money Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund, Schwab Government Money Market Portfolio, and Schwab Retirement Government Money Fund may impose a fee upon the sale of your shares if the Fund’s board determines that the fee is in the best interest of the Fund. An investment in the Schwab Money Funds is not insured or guaranteed by the FDIC or any other government agency. The Schwab Money Funds' sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time.

Charles Schwab Investment Management, Inc. dba Schwab Asset Management™, the investment adviser for Schwab Funds, and Charles Schwab & Co., Inc. (Schwab), Member SIPC, the distributor for Schwab Funds, are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.

Visa® is a registered trademark of Visa U.S.A. Inc. Please see the Visa® debit card agreement for any additional terms and conditions.

Apple, the Apple logo, iPhone, and iPad are trademarks of Apple Inc., registered in the U.S. and other countries. Apple Pay, Touch ID and Apple Watch are trademarks of Apple Inc. Android, Google Play, and Google Pay are trademarks of Google Inc. Use of these trademarks are subject to Google Permissions. Samsung, Samsung Pay, Samsung Gear, Galaxy S and Gear S (and other device names) are trademarks or registered trademarks of Samsung Electronics Co., Ltd. Use only in accordance with law. Other company and product names mentioned may be trademarks of their respective owners. Samsung Pay is available on select Samsung devices.

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