Quick Read – TBIL captures the actual Treasury bill yield near 4% while broker sweeps pay under 1%, costing investors roughly $800 annually on a $25,000 balance. – Treasury interest is exempt from state and local income taxes, amplifying TBIL’s advantage over broker sweeps for…
vestors in high-tax states. – Every large brokerage offers an idle cash sweep, and most pay well under 1%. Schwab’s bank sweep, Fidelity’s FCASH, Merrill Edge’s cash program, and comparable vehicles at other firms funnel uninvested balances into affiliated or partner banks that earn the full short-term rate and pass along a small fraction
US Treasury 3 Month Bill ETF (NASDAQ:TBIL) has become a common swap for investors who want the actual Treasury bill yield credited to their own account rather than retained by the intermediary. Sweeps do serve a purpose, and TBIL will not replace all of them, but the dollar gap on any meaningful balance is now hard to ignore. Why Broker Sweeps Exist Cash sweeps hold dividends, deposits, and trade proceeds inside an FDIC-insured wrapper, ready to redeploy at the next click.
The convenience is real, and FDIC coverage matters for balances spent or invested within days. On a $500 float waiting for next week’s trade, none of this discussion matters. Scale changes the picture.