Crane Data Subscribers
Crane Brokerage Sweep Indexes Fall Sharply, Many Below 1.0 Percent. Most brokerage sweep programs used to move spare cash balances into money market mutual funds. But almost all brokerage firms now use FDIC-insured bank deposit products for temporary cash balances, a trend which Merrill Lynch pioneered in the late 1990's. APYs on these "bankerage" products have always been stingy, but they are setting new record lows in the current falling rate environment. As of Feb. 1, our weekly Crane Brokerage Sweep Index shows an average rate of 0.91% (0.92% APY average) for customers with $25K to $50K balances and an average rate of 1.05% for customers with balances from $50K to $100K. Customers with $100K to $250K balances earn 1.43% on average. The $50K-$100K rate (1.05%) is down from 1.18% last week and down from 1.30% a month ago. The average money fund yield, as measured by our Crane 100 Index, has declined from 4.46% to 3.78% during the past 4 weeks, so most investors could earn significantly more interest in money market mutual funds. Rates, APYs and yields will all continue lower in coming weeks as the money markets digest the remainder of the Federal Reserve's unprecedented 1.25% in rate cuts. To request a sample copy of Crane Data's Brokerage Sweep Intelligence, which monitors brokerage sweep bank, money fund and CD rates on a weekly basis, e-mail pete@cranedata.com.
