Charles Schwab will move uninvested brokerage cash from an FDIC-insured bank sweep to the SIPC-covered Schwab One Interest feature. This automatic transition for eligible clients begins September 8. The rollout will conclude by December 7.
The shift significantly alters the level of account protection. SIPC coverage is limited to $500,000 in total assets per customer. This protection includes a $250,000 cap on cash claims. In contrast, the existing bank sweep program can provide FDIC insurance for millions of dollars.
Schwab will maintain the current yield of 0.01% APY for the new feature. Analysts expect the move to increase company profitability by lowering operational costs. Clients may contact Schwab to opt out and remain in the FDIC-insured bank sweep.