Best place to park excess cash at Ameritrade/IB for short term?

Discussion in 'Retail Brokers' started by Spearhead, Jan 3, 2019.

  1. Hi,

    Does anyone have recommendations on where I could park excess cash in my brokerage account, specifically at Ameritrade and Interactive Brokers, for short time frames that are minimal-risk, low-expense? I occasionally take 2-3 week breaks from the market and have been leaving it up to the broker's automatic sweep, but figured there must be some better options out there in this scenario?

    On Schwab I use SWVXX (Schwab's own money market fund) for this purpose, and there are no fees for getting in and out. However, I don't know if Ameritrade/IB offers something similar? If anyone happens to have some recommendations, please let me know.

    shatteredx and gaussian like this.
  2. IB does pay interest on USD cash positions. That could be an option for you.
  3. Daal


    SHY or T-Bills
  4. traider


    how do we buy t-bills? is it like any normal trading security?
  5. kmiklas


    I just asked my broker about this, in the context of addressing reinvestment risk.

    They recommended ETFs that pay a monthly dividend. There's a bunch of them out there.

    Don't expect to retire on them; you'll only net about 4% annually, but they're better than a sweep account paying essentially nothing.

    They're easy to get in and out of, pay a monthly dividend so you see your return quickly, and are reasonably low risk. You also avoid inherent risks with fixed income, such as interest rate, inflation, default, etc.
  6. lindq


    But these ETFs expose the investor to market risks. It doesn't help much to be receiving a dividend when the value of the ETF is down 10%.
    tommcginnis likes this.
  7. kmiklas


    Yeah... some of them are down a bit.

    DHS seems to have held it's value pretty well.
    Last edited: Jan 4, 2019
  8. OP is asking about a risk free product. SWVXX manages a US Gov't debt portfolio to maximize the rate while removing the day-to-day transaction cost for the retailer.
  9. guru


    IB pays 1.5% - 2%/year interest on held cash (depending on amount, as its tiered), which may be comparable to SWVXX.
    Not sure you can get more any other way risk free at a broker.
    Spearhead likes this.
  10. Sig


    GSY is another option that I use on the ETF side
    #10     Jan 4, 2019
    kmiklas and beerntrading like this.