Schwab Intelligent Portfolios® Sweep Program
The portfolios in the Schwab Intelligent Portfolios® program include a cash allocation, which differs depending on the investment strategy selected. This cash allocation is implemented through the Schwab Intelligent Portfolios Sweep Program ("Sweep Program"), a required feature of the Schwab Intelligent Portfolios program.
The interest rate on cash balances in the Sweep Program is set on the first business day of each month equal to the seven-day yield (with waivers) for the Schwab Government Money Fund – Sweep Shares (symbol: SWGXX) as determined at the end of the prior month. This interest rate and the method used to determine it are both subject to change.
Effective December 1, 2023, the current interest rate is 4.97% APY*
This rate may be higher or lower than the interest rates available on other deposit accounts at Schwab Bank or on comparable deposit accounts at other banks. It may also be higher or lower than other cash-equivalent investments, such as money market funds, that are available through Schwab.
Schwab Bank earns income on the cash allocation for each investment strategy. For example:
Assume a $100,000 account with a 10% Cash Allocation ($10,000), which would be a moderate—aggressive investment portfolio allocation. Using market interest rates from the second quarter of 2022, Schwab Bank earned about 0.74% on an annual basis on the cash it invested net of what it paid to clients in the Program. Schwab Bank would have received about $74 ($10,000 x 0.74%) on that cash deposit, annualized, which equates to 0.074% or 7.4 basis points ($74/$100,000) of the total client investment of $100,000.
This example is for illustrative purposes only and does not necessarily reflect the interest rate a particular client at a particular point in time receives or the revenue Schwab Bank earns from that client's cash allocation.
Schwab Bank may change the method of determining the interest rate upon 30 days' notice to Schwab or upon a regulatory requirement. Schwab will notify clients if it receives such notice from Schwab Bank. The terms and conditions of the Sweep Program and Schwab's ability to make changes to the Sweep Program or move balances to a new sweep product are set forth in the Schwab Intelligent Portfolios® Sweep Program Disclosure Statement that is made available to clients when they open their accounts. Clients should read this document carefully and retain a copy for their records.