Moomoo Cash Sweep Advantages and Considerations

Moomoo Cash Sweep is a feature that automatically moves excess cash in your brokerage account to a high-yield savings account, earning you interest on your idle funds. This feature can be enabled with a minimum balance of $1,000.

By enabling Moomoo Cash Sweep, you can earn an annual percentage yield (APY) of up to 4.65%, depending on market conditions. This can be a significant boost to your investment returns over time.

Moomoo Cash Sweep is designed to be a low-risk investment option, with FDIC insurance protecting your deposits up to $250,000. This means your money is secure and backed by the US government.

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A cash sweep program is a cash management program that allows you to deposit idle cash into a bank and earn interest. It's a feature offered by some brokerages, including Moomoo Financial Inc.

This type of program is specifically designed for US securities accounts, and it's only available through Moomoo Financial Inc. for now. The program is meant to help you manage your uninvested cash and earn interest on it.

The swept money at the program banks is insured by the FDIC, which means your money is secured up to a certain amount. This is a common feature of brokerage accounts that's been around since the 1970s, when Merrill Lynch introduced cash management accounts.

The program automatically redeems funds from the bank when your cash in the securities account is negative, and it automatically deposits funds in the bank when your cash is greater than 0. This way, you can keep earning interest on your idle cash.

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Cash Sweep is a cash management feature that automatically moves uninvested cash from your securities account into a partnering bank, allowing you to earn interest on your money.

Moomoo Financial Inc. has partnered with several banks, including Bank United, Cadence Bank, EastWest Bank, and Preferred Bank, to offer this service.

The partnering bank list is subject to updates, so it's a good idea to check the Moomoo website for the most current information.

This feature is designed to help you generate extra income without any hassle, making it a simple way to manage your excess cash.

Moomoo's Cash Sweep program offers a competitive APY of up to 5.1% for new and qualified users, significantly higher than traditional brokers like TD Ameritrade.

The program is free to join with no account fees, and there's no cap on deposit amounts, making it a straightforward and transparent approach.

You can add money to your investment account at any time, allowing your cash balances to grow over time if you're not ready to invest.

Here are some key benefits of Moomoo's Cash Sweep program:

One of the biggest advantages of alternative payments is that they can earn interest on your uninvested cash, giving you a higher return than traditional accounts.

Cash Sweep, a popular alternative payment option, boasts several additional advantages that make it an effective choice for managing your uninvested funds.

Your purchasing power remains intact with Cash Sweep, as swept funds at program banks are still part of your securities account. This means you can still take advantage of potential investing opportunities as they arise.

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The automation feature of Cash Sweep simplifies management of your idle brokerage funds, moving funds from the bank to cover deficits and sweeping cash to program banks to earn interest.

Your swept funds are protected by the Federal Deposit Insurance Corporation (FDIC), providing insurance coverage up to $1 million (or $250,000 per bank) at partner banks.

Here are some key benefits of Cash Sweep at a glance:

If you're considering a cash sweep program, it's essential to weigh the pros and cons.

Cash sweep programs allow you to add money to your investment account at any time, giving you flexibility and control over your finances.

You can also rest easy knowing your swept uninvested funds are insured by the FDIC, up to certain limits. Any amount over that limit is not insured.

Money can be pulled from a cash sweep program to make a trade without needing another deposit or awaiting a transfer, assuming it covers the cost of transaction.

There are no limits on the number of withdrawals that can be made.

However, rates can be variable and are subject to change without notice.

Typically, cash sweep programs do not offer features like ATM access, debit cards, or checks.

Some brokerages will limit the amount you can deposit per month by free electronic fund transfer methods such as Automated Clearing House (ACH).

There is a $250,000 limit at each program bank, which includes any deposit account under the same name. Any amount over this limit may not be covered.

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Joining moomoo's Cash Sweep is a straightforward process. Qualified users can join by opening the US securities account page of the moomoo app.

To get started, tap "Up" on the right side of the "Cash" tab or the "Cash Sweep" portal below. This will initiate the Cash Sweep procedures. You can then activate your interest rate and start earning interest on your uninvested cash.

The steps are simple, making it easy to take advantage of Cash Sweep's benefits.

Flexibility and usability are key aspects of the Cash Sweep program. It allows investors to withdraw or invest their funds at any time, without lock-up periods like with CDs or stablecoin staking platforms.

This freedom ensures investors can quickly respond to market opportunities without affecting their brokerage account's purchasing power. No manual transfers are required, making it easy to manage your investments.

Interest accrues daily and is paid monthly, providing a consistent flow of earnings.

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To join the Cash Sweep program, you can access it through the moomoo app. Open the US securities account page of the moomoo app to begin the process.

You can join the program by clicking on the "up" icon on the right side of the cash tab or the "Cash Sweep" icon. This will take you to the Cash Sweep program introduction page.

To activate your interest rate and start earning interest on your uninvested cash, you need to start the Cash Sweep procedures. This can be done by tapping "up" on the right side of the "Cash" tab or the "Cash Sweep" portal below.

Once you've confirmed your joining, you can enjoy earning interest on your uninvested cash.

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Consider your individual financial goals and risk appetite when deciding whether to join a cash sweep program.

Understand what you're aiming for financially to determine if this program aligns with your needs.

Public information about the program bank's health can be accessed on the FDIC's website, so be sure to review that.

The compensation arrangement between the bank and your broker-dealer should be understood, including how fees are structured.

The interest rate on your uninvested cash in the bank sweep program is important, and you should explore potential alternatives with varying costs, benefits, and risks.

Cash swept into bank accounts through the broker-dealer's sweep program is FDIC-insured up to $1 million or $250,000 per customer at each participating bank.

Monitor the amount your broker-dealer sweeps into each bank to ensure that any cash exceeding the $250,000 limit is not left uninsured by the FDIC.

Here's a quick summary of key factors to consider:

The Moomoo Cash Sweep program is available to US securities accounts only, which means you can't use it if you have an account in a different location.

This program is designed to help you earn interest on idle cash in your account, which is a great way to make your money work for you.

You can deposit idle cash into the bank through this program, and the funds will still be considered as part of your securities account's purchasing power.

This means that even though your cash is earning interest, you can still use it to buy securities whenever you need to.

The program automatically redeems funds from the bank when your cash balance is negative, so you don't have to worry about overspending.

The program also automatically deposits funds into the bank when your cash balance is greater than 0, so you can earn interest on your idle cash without having to lift a finger.

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