The simple version

You sell something, or you deposit money, or a dividend lands. Until you buy something else, that money is uninvested cash. It does not sit in a drawer with your name on it.

It is swept, automatically, into a program that holds it and pays you interest. Which program your account uses was decided when the account was opened. The rate that program pays is not the same as what the firm earns on those dollars.

The numbers

• The Schwab Intelligent Portfolios Sweep Program paid 3.29% annual percentage yield (APY), effective September 1, 2026 (Charles Schwab, Schwab Intelligent Portfolios Sweep Program current interest rates)
• That rate is set on the first business day of each month, equal to the seven-day yield of the Schwab Government Money Fund Sweep Shares at the end of the prior month (Charles Schwab, same page)
• The Bank Sweep feature is a separate program, and its rates vary by six balance tiers, from $0 through $24,999.99 up to $1,000,000 or more (Charles Schwab, Cash Features Program Disclosure Statement)
• The same document states that the Program Banks are not obligated to pay different interest rates on different tiers (Charles Schwab, Cash Features Program Disclosure Statement)
• The Securities and Exchange Commission (SEC) states that bank sweep programs also often pay less interest than money market fund sweep programs (SEC, Investor Bulletin on cash sweep programs)
• The Bank Sweep tier rates are not published in that disclosure statement, so this article does not compare the two programs' rates (stated limitation)

The sentence that explains the rate

Firms disclose how these rates get set. The language is not hidden and it is not vague.

The Cash Features Program Disclosure Statement says interest rates on the deposit accounts may be established at a rate as low as possible consistent with prevailing market and business conditions.

Read that again, because it is doing real work. It is not a promise to match anything. It says the rate is a business decision, bounded by what conditions require rather than by what the money earns.

The same document adds that the rates paid on those deposits can be higher or lower than the rates available for other cash features, or to a depositor going to a bank directly. So two people at the same firm, holding the same amount of cash, can be paid different rates.

A published tier is not a promise

For the Bank Sweep feature, the disclosure lists six balance tiers. It then says the Program Banks are not obligated to pay different interest rates on different tiers.

So the tier table describes a structure the bank may use, not a schedule it owes anyone. A balance crossing into a higher tier does not automatically earn a higher rate.

The disclosure statement does not publish the rate attached to any tier. That is why this article does not put the two programs side by side.

The Real Cost lens on a percentage point and a calendar

For cash in a brokerage account, the balance is usually not the interesting variable. The calendar is. Uninvested cash tends to arrive and leave, sitting for days between a sale and the next purchase.

So the useful question is what a difference in rate is worth per unit of time. Here is that arithmetic on $25,000, using a difference of one percentage point as the unit.

• One percentage point on $25,000 is $250 over a full year.
• The same percentage point across 45 days is about $31.
• Across 3 days, it is about $2.
• For scale, $25,000 at the 3.29% rate cited above earns $822.50 over a full year.

The one percentage point is an illustrative unit, not a spread any firm has quoted, and the $25,000 is chosen for round arithmetic. The point is the shape rather than the amount. The cost of a low rate on transient cash is small per day, which is exactly why it goes unnoticed.

It also never arrives as a line item. Nobody is billed for interest they did not earn. The only way to see the number is to go looking for the rate.

What this means

Uninvested cash is the part of a brokerage account nobody looks at, which is why the rate on it is worth knowing. The number is published. It sits in the disclosure documents the firm already sent.

Knowing which sweep program an account uses, and what that program pays, turns an invisible default into something visible. What anyone does with that information is their own call.

What this is NOT

This article does not tell you to move your cash, change your sweep program, open a different account, or buy any cash alternative, and it is not a recommendation to buy, sell, hold, or avoid any security, including shares of any firm named here. It takes no position on whether any firm's rate is fair, generous, or otherwise, and it does not rank firms against each other. The two Schwab figures described belong to two different programs serving different account types, and neither is presented as the firm's rate; the Bank Sweep tier rates are not published in the disclosure statement, so no comparison between the two programs is offered or implied. The one percentage point and the $25,000 balance in the Real Cost section are illustrations chosen for round arithmetic, not quoted spreads or measured averages, and that arithmetic assumes a rate that does not move and a balance that does not change, which real accounts rarely have. Rates on these programs can change daily and without notice, so every figure here is accurate only as of the date shown.

Sources

• Charles Schwab, Cash Features Program Disclosure Statement: https://www.schwab.com/legal/cash-features-disclosure-statement
• Charles Schwab, Schwab Intelligent Portfolios Sweep Program current interest rates, effective September 1, 2026: https://www.schwab.com/legal/sip-sweep-current-interest-rates
• U.S. Securities and Exchange Commission, Cash Sweep Programs for Uninvested Cash in Your Investment Accounts, Investor Bulletin: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/cash-sweep-programs-uninvested-cash-your-investment-accounts-investor-bulletin