Image Credit: Christophe Vorlet
By Jason Zweig | March 9, 2018 11:46 am ET
Interest rates are on the rise, but customers of brokerage firms aren’t going along for the ride.
The Federal Reserve has driven short-term interest rates up a full percentage point since late 2016; one-month Treasury bills were yielding 1.6% this week. But you’d never know any of that from looking at the returns on the cash in your brokerage account.
Consider the rates major brokers are paying on so-called sweep accounts, the main reservoir where they hold clients’ cash. As of March 2, according to Crane Data, a firm that monitors money-market funds and other cash investments, yields on sweep accounts ranged from as low as 0.01% at eTrade and 0.05% at TD Ameritrade up to — if “up” is the right word — 0.25% at UBS and 0.27% at Fidelity Investments.…
To read the rest of the column:
The Wall Street Journal, http://on.wsj.com/2FGrac7
For further reading:
Jason Zweig, The Little Book of Safe Money
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Devil’s Financial Dictionary
Benjamin Graham, The Intelligent Investor