Sweep Update, Schwab/TD Merger
Rates on brokerage sweep accounts, bank accounts and money market funds continue inching lower in the fourth week following the Federal Reserve's most recent rate cut, though the declines are just about played out. Our latest Brokerage Sweep Intelligence publication, with data as of Friday, Nov. 22, shows only Ameriprise and Morgan Stanley cutting rates over the past week. Schwab, RW Baird and UBS all cut rates the week before and Raymond James and Wells Fargo cut rates three weeks ago. Ameriprise dropped rates by 1 basis point; its 100K balance tier sits at 0.09%. Morgan Stanley also cut rates; its 100K balance now pays 0.03%. Our Crane Brokerage Sweep Index remained unchanged at 0.15% in the week ended November 22 (for balances of $100K); down from 0.17% two weeks ago. E*Trade and TD Ameritrade currently have the lowest rate for balances at this level (0.01%). Meanwhile, Fidelity continues to have the highest sweep rate (0.82%). (Fidelity also has a higher-yielding money fund option for new accounts.) Morgan Stanley <b:> is paying 0.03%, UBS and Merrill are both paying 0.05%. Schwab is paying 0.06%, Wells Fargo is paying 0.07% and Raymond James is paying 0.08%. Ameriprise is paying 0.09%, and RW Baird is paying 0.33% for balances of $100K. Money market fund yields also inched lower over the past week. Our Money Fund Intelligence Daily shows the Crane Money Fund Average 7-day yield falling by 0.01% to 1.39% in the week through 11/22. Our Crane 100 MF Index dropped 0.02% to 1.51% over the past week. In related sweep news, see The Wall Street Journal's, "Charles Schwab to Buy TD Ameritrade for $26 Billion." In recent weeks, both Schwab and TD Ameritrade have cut brokerage sweep rates. Schwab remains ahead of TD Ameritrade with its 100K tier rate sitting at 0.06% vs. TD Ameritrade's 0.01%.
