Schwab Is Costing You THOUSANDS In 2024 and You Don't Even Know It
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- เผยแพร่เมื่อ 8 ก.ย. 2024
- You may not be aware that Charles Schwab will start costing you thousands if you don't pay attention to the money in your Sweep account. Right now interest rates are high enough so that you can make money in money market funds like SWVXX paying over 5% interest!
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I think investors should always put their cash to work, especially In 2024, we'll start to see more market diversification. I'm hoping to invest about $350k of my savings in stocks against next year. Hope to make millions in 2024
Since risk is at an all-time high right now, perhaps you should be a little more patient and return when it has decreased. Alternatively, you can consult a trained financial expert for strategy.
Yes true, I have been in touch with a brokerage Advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
NICOLE ANASTASIA PLUMLEE is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
I searched for her full name online, found her page, and sent an email to schedule a meeting. Hopefully, she responds soon. Thank you
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
@@ArabellaBeatrice-099 That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@@EleanorMabel My advisor is VICTORIA CARMEN SANTAELLA;
You can look her up online
@@ArabellaBeatrice-099 The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
8:00 This is not true. All you have to do is put a sell order of SWVXX or other Schwab money market fund. Then you can use that money to trade immediately even though that sell order won't get filled until the end of day. You definitely don't need to wait for sell order to settle the next day.
Correct. I do it all the time.
Holy crap… I gave it four minutes and you still didn't make a point
TLDR: Dont keep uninvested money in Schwab. If you have any uninvested money, move it to brokerage that offers high interest rates.
And what brokerage is that @@fantasyrookie8757
Thanks. He sounded like an advertisement
Thanks for the warning. Skipped to 4min.
Lol I can't help but feel that energy is counterproductive to success.
You can trade with unsettled funds at Schwab. You can call them and ask for ways to get better interest and they will go over money markets, CDs, etc. They advertise their MM rates on their statements and their website. So Schwab is not costing you thousands, but you could help yourself earn more by putting in a little work.
The "costing you thousands" is in relation to their competitors. Vanguard and Fidelity automatically sweep your deposits into MM accounts that give 5%+.
Moral of the story-don’t sit on your cash in your Schwab account. Reinvest it into a fund, HYSA, or something drawing more interest.
This is a click bait video. And not even a good one. Bottom line: If you want to keep cash in Schwab, put it in their money market funds, don’t just leave it in your cash sweep.
I’m surprised anyone would leave just cash not in a MM while waiting for a buy box.
Initially i didnt know but was made aware about this 3 months ago. I also recently just found out that when u sell a cash secured put, the money that schwab holds u can still put in a money market account. I sold 2 Jan 2025 puts with a $25 strike price totalling 5000 on hold and the money on hold is inside a money market account basically for a year. So not only did i get premium for selling the puts i also collect interest on the 5k.
I've sat & wished for the LONGEST time that I could do that with the set-aside cash from shorting options!! I've got $50K just sitting there not working for me like it could be. I guess I was a victim of my own assumption. Did you have to call in and have them trade into a MMF for you or were you able to do it yourself?
@itsnunyabidness1225 By myself. I actually rolled them to 2026. So the 5k would be collecting passive income for close to 2 years. Schwab's mmf is pretty liquid plus u can do it with the click of a button
Yes, same! How can I do that?
@@arcee49 do u have schwab
I felt exactly how you felt. I should’ve checked and disappointed with Schwab. Thanks for sharing!
why do we have to wait so long before this guy gets to the point....dude talks to much
I used SNSXX in my taxable account - treasuries aren't taxed in my state and given my state tax rate the net I'll keep is higher. (Schwab doesn't have a state muni fund for me.) If in a margin account you don't have to wait to sell the MMF before you trade - sell it the same day and it will settle in time to avoid margin interest.
Interesting, @Sylvan_dB . I didn't know that about margin accounts with Schwab!
Can you explain how Margin Interest would work for this type of trade? What if you wanted to just park money in the account and hold it but have enough cash to cover? Could you then use the remaining money on Margin to Trade?
@@joestutzke4511 I'm not entirely clear on what you are asking. If you wonder if you can leave money in the fund and trade on margin, yes you can. I do that. (Schwab will not automatically sell the MMF, at least not on new personal accounts. web page docs indicate some old or managed accounts might be set up to auto-sell.)
Duh. In addition to MM funds, there are plenty of liquid ETFs that hold treasuries, etc. that are an easy work around for this. This content could be covered in 2 minutes or less.
For extra income, my son sells cash secured put options in his Schwab account against cash in the sweep account or in the SWVXX money market fund. Of course he keeps the bulk of his cash in SWVXX to earn the higher 5% rate.
when i realized what Schwab was doing, I WAS NOT HAPPY. for years, i have split my $ between Vanguard and Schwab but due to this wonky two-step processes, I am seriously thinking of moving 1/2 to Fidelity. VERY disappointing. Schwab should be doing better.
Have been with Schwab since the early 1980s. Wish I would have found your video 9 months ago. This didn't get my attention until recently. Started using the Schwab MMFs for a higher yield and to have the cash more readily available to invest in the market. I don't understand why Schwab can't just sweep cash automatically into a Schwab MMF, like Fidelity and Vanguard do. Instead of the account holder having to buy and sell in and out of them. Thanks for your video.
Start listening from 6 min onwards.
Thanks for the reminder. I recently sold off some positions and have cash doing nothing in my CS account. Putting it into SGOV for now.
Jeez. All mine and kids investment accounts are with Schwab. Thanks Robbie
Hey @lasercooper! Ya Schwab is fantastic…just gotta pay attention to that sweep account!
sgov is a good place to park cash low expense ratio and no state tax.they just paid 0.4581 dividend.
Thanks to your very informative video, I moved everything out of Schwab and over to Fidelity!
Going to do the same here.
I had fidelity for over 25 yrs. They Were even worse. From high fees to crappy customers no service.
Thank you Robbie..I saw fidelity giving 4.78% . It didn't click in mind that something is wrong . No interest from Charles uncle 🙂
Thank you my friend. I fell asleep with TH-cam playing in the background (on my tv) and I woke up to your video. I watched it three times and now I just went into my Schwab account and purchased the SWVXX. Thank you for the information!!
i guess you could say Schwab is taking your cash and 'sweeping it under the rug'
🤣🤣🤣
Unless you have that money in your pocket, someone is making money off of your money.
I created 4 Schwab accounts with specific goals for each. A car fund, retirement house fund, Roth IRA and emergency fund. I created the emergency fund account January of 2023 and started buying 3-month T-bills when they were around 4.5%. As I added money I would buy a 3-month T-bill when I could afford to buy 10 T-bills. Any cash not used would go into SWVXX. I created a T-bill ladder where I have at least 2 to 4 T-bills a month and roll those into another 3-month T-bill. A couple times I purchased a 3-month CD. It would depend on the interest rate I would be able to collect for the day I was making the purchase. Interest from the T-bill/CD goes into SWVXX. I do the same thing with Fidelity. However, the majority of my emergency funds are with Schwab.
You're losing out in the intrest because it's in a real FDIC insured bank account.
This is true 👍
is Charles Schwab and up front stock company or not ? I am finding out that my stock prices on them are lower than the prices quoted on GOOGLE STOCKS WHEN I GO TO CHECK THE STOCKS...ITS ALWAYS LOWER THAN GOOGLES PRICES POSTED ? OR ARE THEY PULLING THIS CRAP OF CHEATING MY STOCKS !
SUMMARY: As of July 2024 Vanguard, Fidelity, and Schwab all offer money market funds with yields between 5.01% and 5.29%. NEXT!
I share your frustration. I don't see why we can't authorize them to use a specific Schwab money market account to fund stock purchases. That would be good customer service.
It’s just 2 transactions. Couldn’t be easier.
As I understand it, you are doing your own investing at no charge by Schwab other than the expense ratios that are associated with a particular fund or eft that you choose to allocate to. You have all the tools and resources available to you that Schwab offers at no charge. Schwab does have broker assistance if you need it. With a fee naturally. Then you would be notified if there is a better alternative during changing markets. Maybe that would be a better alternative for you, given your complaint to a free platform.
Nice laptop! It looks like an HP EliteBook 850/860. Is it G8 or G9?
Thanks! Actually it's an HP Envy!
I saw a different clip that said the same thing about Schwab. So, basically they're treating us like the sleazy banks? We shouldn't have to ask them to give us a higher rate. I'm going to check out Fidelity. It seems like they have our backs a little better than the greedy uncle...
Been with Schwab for 6 years. Retired at 44 trading with multiple accounts/IRA ..Etc...never had any issues until the last the last TOS outage. Lost over 12k due to the swing trade, but I have made over 7 figures, so oh well ...😊
Can't make heads or tails out of what your rant is.
Interest rate on your cash is 9 times higher in Fidelity and Vanguard than Schwab.
Ha! Same.
It was clear to me!
Don't get me wrong, brotha. I dig Quincy Jones and all. But the music overlay in this video is too distracting! (@ 1:48) Otherwise, good show, man...👍🏾👍🏾
So I’m lost! Could you please help me to understand? I’m new to this and have heard Schwab US Treasury fund is the best way to make some money out of what you have bc of their great percentage. Is that right? What’s the difference between Fidelity and Schwab in this case? Thank you😊
Any thing is better than the sweep account at .48 percent what we all want is a sweep account paying a higher interest why because when we sell it goes directly to your sweep making a decent percentage we may have limit orders on that may hit one two three,months from now Schwab is taking your sweep money and collecting the arbitrage between the sweep and the money market they don’t have your best interest at heart there making money and hoping you will fall asleep and let you money sit there while they collect times this by let’s just say a lot of people I am stuck here through a work place plan I will be leaving to fidelity there is a lot to like about Schwab but this is shady and you must keep and eye on them to answer your questing about the treasury fund it could be good I would look at the fees and your tax management plan if you have it in traditional ira your withdrawals will bee taxed at ordinary income you might do better using these in brokerage account speak with your advisor for account location 😊
Fidelity has core account where money goes automatically and pays you interest like 4.95%.
GET TO THE POINT
Patience is a virtue. 😉
If you're self managing your investments and have a significant Schwab bank sweep balance they you best find an advisor because you aren't doing a good job. We're with Scwhab but our bank sweep account is minor and we keep it that way either via investments or transfers to one of their competive money market funds.
This is a shameful practice which Schwab should correct immediately. If other brokers are providing higher interest on their sweeps then Schwab shold fall in line and not be so rapacious.
Yes, I did! Is there an expense ratio on the SWVXX? I thought it said 3.5 but I could be wrong an am trying to figure out if there is one.
What about the july 2024 reports that are saying stocks like MRNA. PARA. BBY. SQQQ Will skyrocket by end of year 2024❤
I also put some cash in SWVXX!
Nice! Were thinking alike!
Same here for my taxable brokerage account. Too much easy money to pass on it.
If your account is a Roth IRA then that Money Market account is tax free.
Nice Video not sure you need music playing in the background ( I dont know though does having music in your videos generate more money you earn from youtube ? ) Any way I find it distracting when trying to pay attention to your Important info. At least you lowered the volume some times when you would speak. I wish TH-cam had a toggle switch to eliminate background music in videos.
You have some, um, opinionated folks in the comments. I guess negative comments are still great for the YT algorithm!
Thanks for the video. It's good info to know. Maybe some of these folks will grow to appreciate your creative format.
I know right? Interesting comment section for this video. Not sure what happened here. But thanks for appreciating the creativity. Trying to make better content!
No. Bank accounts are not insured.
Thanks Robbie, I'm new to all of this, but if I'm understanding this, money sitting in a Fidelity "sweep" account, is earning interest at Fidelity?
Hi Michele! Yes earning interest in their Fidelity money market fund. Or in a partner bank. Depending on account. For example an Ira account, brokerage acct. etc. . 👍
I realized this last year and immediately transferred my $ mid 7 figures to fidelity. Schwab is greedy, I will not do business with them on principal
And you probably have well over the FDIC limit anyway and want to maximize the yield on your cash. 👍
Hes created a hit piece, for some unknown reason he's trying to trash C.S... they must be charging him fees 😅😅 i do see ur point, but its not a problem, you had ur money in the bond fund.
Yes, True!
You have no idea what you’re talking about. Charles Schwab checking, savings, and investor checking accounts ARE NOT HYSA. Now if you’re investing in their Intelligent Portfolios, the cash inside of your portfolio earns a VERY ATTRACTIVE interest rate (currently between 4.3% and 5%), which is very competitive with any HYSA out there. Terrible video.
Trade CD's on the platform....not MM...
Thanks
What about the Cash in their Intelligence Portfolio Roth IRA
Hi, no offense, but I am trying to listen to this but the music is just too loud/distracting.
No offense I’m happy for the feedback 🙂. Curious so I know when editing…did you watch with headphones (noise canceling) or with a phone speaker?
Im on my iPhone no headphones and have to agree. The music is drowning out your voice. Still great content.
Thanks for the feedback! 🙂
I didn't even realize it was 2024!
watch to the end
so just move your money from the sweep to the swvxx?
That takes a full business day during which time you can't use the money for ANYTHING. If you're unlucky enough to have moved your money after 4 pm it requires 2 days before you can use it. I've missed trades because of this.
Man i have all 3 brokerage and only Schwab isn't automatically placing your money in Market fund, Fidelity and Vanguard do, i moved my cash 50 / 50 between Fidelity and Vanguard
And at Fidelity, even if you do not use a "core" money market fund, you can manually buy any money market fund and set Fidelity to automatically sell it if needed to settle a trade or allow a withdrawal.
I think a lot of people are leaving money on the table!
@@RobbieMoney i think so as well, people don't know, Thanks for the video
Are you serious? We've been going crazy about raising interest rates for over a year and you didn't check what your money is worth in your account?????? IBKR has been paying my cash with a juicy % (now 4.83%) since the first day rates went up.
Unfortunately….yes I’m serious 🤪
thanks for the 411!
Is this an ad?
False - Fidelity sweep acct pays the same - trash
"Maybe I'm The Only One?" YES! YES YOU ARE THE ONLY ONE WITH 7 THOUSAND DOLLARS IN AN INVESTMENT ACCOUNT AND NOT INVESTED 😳
To the point
Get to the Fing point already. Why do you talk so much. Maybe people will sub if you fix this, otherwise we re here just for this video from search and never back again.
zzzz get to the point. 4 minutes into this video and I have no idea how Schwab is screwing me.
SWVXX is where all my trading funds wait for a buy box I like. You don’t need to let it “clear” before you buy.
A long video stating you didn't read the disclosure. It is all on you jethro
Can't hear you over your obnoxious background music!
lol use there chart and trade on vanguard
Another great video. Glad I don't have a Schwab acct.👍
This video has more padding than my matress. Get to the point, man.
You made me lose money because I could have been researching a trade instead of listening to this claptrap.
Recently had my accounts transferred over from another broker. Needless to say, not impressed with Mr Charles at all. Giving it 6 months
Ahhh too bad! I do like Schwab but just hate that sweep account.
From TD Ameritrade? I consider Schwab an upgrade in most areas. The sweep account is actually 0.10% better than what TD Ameritrade was paying!
Schwab sucks.
Took 7 minutes to say “make sure you place trades with your cash available once it’s transferred”. Click bait build up to nothing.
When a videos’ title and thumbnail say the thing that is explained in the video it’s by definition NOT clickbait. I both reveal why it can cost you thousands AND what to do about it. Say you didn’t like the video that’s fine. But calling it clickbait is false.
Get to the point!
you talk too much
I’ll be sure not to talk in the next video. 🫡
@@RobbieMoney direct and to the point, well done
Sounds like a woman, rant rant rant, why not straight to the point?????
Schwab is a snob. Schwab isn’t in it for you.
Clickbait! Don’t watch! Literally rants about nothing!
zzzzzzzzzzz