TDA is stealing your cash

by Araphoren

I’m here to spread the good news (liquidating Schwab’s cash reserves would be cool too)

Brokerages should sweep your cash overnight into a money market (MM) fund that gives you a yield based on the FFR everyone here keeps yelling about. TDA does not.

TDA instead offers you 0.35% in all sitting cash in your brokerage. Spoiler: this is bullshit. Even fucking Chinese Webull offers you higher APR on uninvested cash.

Brokerage MM cash sweep yield
TDA 0.35%
Webull 4.1%
Fidelity 4.22%
IBKR 4.83%
Robinhood 1.5-4.4%

“oh no! what can we do?!”

Switch your broker, regard! Use TDA for charts but trade with other brokerages, you’ll get better fills anyways. fidelity literally automatically gives you yield via SPAXX.

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Fidelity

Robinhood cash sweep

Webull cash sweep

IBKR cash sweep

Plus the more people who switch out of TDA or banks to high yield money market funds, the bigger bank crisis we’ll have. Win-win!

Example: if I have $25k in fidelity, I can trade with $100k in funds every day (closing out end of day) and Fidelity will still give me 4.5% APR every day regardless if I’m trading.

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