SWGXX
Schwab Government Money Fund
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Also, Schwab still has a cash sweep fund. Unfortunately, it is only available for wealthy clients and needs approval. Fidelity has it for everyone. The ticker symbol is SWGXX.
I hold a bit over $20M with Schwab. I do not know what the minimum is to qualify. I vaguely recall seeing some others post that they got moved to auto sweep with high 7 figure account. Just make the request. You lose nothing if they say no. For a while they put my cash into one of their money markets, SWGXX I think, then they sent out a letter a few years ago that they were transitioning to an unlisted equivalent fund. The statement just says "Schwab1 Int". It appears to be similar to SNVXX or SWGXX. For the last month it looks like the interest rate was about 3.4%. (I had various inflows and outflows and did not precisely calculate my daily balance, but rather just crudely estimated, so that could be off a couple of percent). It seems to have the same rate s
They invest that into SWGXX I think it gets like 3.9%
Schwab will do it with SWGXX if you get an exception, which is probably the size of your account. They are making a change for IRA account but the rate is the same. If not a big enough account, move to Fidelity or IAB who will do it for you automatically
I read about that too. Based on some digging, review of documentation, and a direct discussion with Schwab they are paying 4%+ on cash balances. I do not have a problem holding a little cash, but I am with you that I do not want to hold 20% cash. In my current allocation the cash position is about 7%. If I compare that to another age based fund that I am in they are more in a short term bond fund. So to me it is a wash. I am not seeking to outperform an index like the Nasdaq. I am looking for consistent risk based returns between 8-10%. I did not put all of my funds in the SIP. I allocated some across Vanguard ETFs in the IRA. I also have funds outside of retirement and I am more aggressive with those. If you want to add things like VTI into the mix you will need two accounts, a SIP account and a non-SIP account. You will have more leeway in the non-SIP account. The SIP is fully allocation based and you will not be able to buy puts in the SIP, as an example. [https://www.investopedia.com/charles-schwab-intelligent-portfolios-review-4692523](https://www.investopedia.com/charles-schwab-intelligent-portfolios-review-4692523) The interest rate on cash balances in the Sweep Program is set on the first business day of each month equal to the seven-day yield (with waivers) for the Schwab Government Money Fund – Sweep Shares (symbol: [SWGXX](https://www.schwabassetmanagement.com/products/swgxx)) as determined at the end of the prior month. This interest rate and the method used to determine it are both subject to change. **Effective August 1, 2024, the current interest rate is 4.91% APY\***
For now, open a Schwab account and place the money into a money market fund, SWVXX, SNSXX, SWGXX, etc (these are all mutual fund examples), you'll get paid the 15th of every month with an interest payment, and you can access the money within one day if you ever need to liquidate any of it. 60k will yield you about $258 a month, and you'll accrue this interest daily, you can re-invest it to build the 60k and the interest you earn will compound, this may motivate you to continue saving
I just did a little Googling and apparently on the Schwab side SWVXX doesn’t allow this but SWGXX used to and you’d need to be grandfathered into it to take advantage. Which sucks because I like the flexibility of SPAXX you’re describing.
That makes sense. That is also how Schwab currently operates. They used to have a cash sweep option into SWGXX, but now everything is held in SchwabCash yielding ~0.4% with the hopes that people don't put in mutual fund trade orders for SWVXX,SNVXX,etc. on their excess cash and my guess is that that is alot of people.
The beef with Schwab in the past has been the high cash holding. At least with the recent rate increases, and the cash being FDIC insured, it isn't the worst. They post the rate - [https://www.schwab.com/legal/sip-sweep-current-interest-rates](https://www.schwab.com/legal/sip-sweep-current-interest-rates). It is currently at 4.4% and guaranteed since it is a savings account. By the looks of the [SWGXX](https://www.schwabassetmanagement.com/products/swgxx) it follows that is set to go up on the 1st. As you're over $50k in the portfolio don't forget to turn on [tax-loss harvesting](https://intelligent.schwab.com/page/tax-loss-harvesting-rebalancing) assuming it is a brokerage account. That's where a robo-advisor justifies its fees and could outperform a portfolio you make yourself.
Schwab has MMFs as well. SWVXX, SWGXX for example.
Sorry it looks like i was mistaken on the cash, while they DO require you to keep 8-10% as cash, you earn on it, not them: ​ From their FAQ: Do I earn interest on the cash? "Yes, the interest rate on cash balances in the Sweep Program is set on the first business day of each month equal to the seven-day yield (with waivers) for the Schwab Government Money Fund – Sweep Shares (symbol: SWGXX) as determined at the end of the prior month. See Current Interest Rates for more details. Some cash alternatives outside of the program pay a higher yield. I think i confused it because they ended the cash sweep program for regular accounts and you dont earn interest on your cash sitting in your regular brokerage acccount anymore. ​ Also it says cash is one of the ways they earn money: FAQ : How does schwab earn money? Cash: We believe cash is a key component of an investment portfolio. Based on your risk profile, a portion of your portfolio is placed in an FDIC-insured deposit at Schwab Bank. Some cash alternatives outside of the program pay a higher yield.