There are two sweep features for clients to earn income on uninvested cash balances in their account – the Bank Deposit Sweep (one for natural persons and one for all other types of customers) and the Money Market Fund Sweep. Eligibility is based on the type of investment account and nature of account ownership.
Your available cash — including deposits, dividends, interest and proceeds from sales in your brokerage account — will be automatically deposited into interest-bearing deposit accounts at multiple banks, providing Federal Deposit Insurance Corporation (“FDIC”) insurance. This FDIC insurance coverage is subject to FDIC limitations.
With both Standard Bank Deposit Sweep Programs, the more assets you hold with us, the higher your interest rate may be for the cash deposited into the Sweep program. Other benefits include the ability to have FDIC insurance coverage for deposits of up to $2,500,000 in the aggregate, if deposits are held at multiple participating banks.
The table below provides information about the two Bank Deposit Sweep Programs offered by Avantax Wealth Management.
Balances in the Bank Deposit Sweep are insured up to $250,000 (or other applicable amounts) per participating bank by the Federal Deposit Insurance Corp. (FDIC) for each category of legal ownership for a total of $2,500,000 in FDIC insurance coverage.
For a list of participating program banks please click on the appropriate link in the table below. Balances in the Bank Deposit Sweep in excess of $2,500,000 (in the aggregate) will be deposited at an Excess Bank and may not be FDIC insured.
For purposes of calculating the FDIC insurance coverage limits, the cash balances in the Bank Deposit Sweep Program at any one of the participating banks will be combined with deposit balances held directly by or indirectly for you at the same bank (including checking accounts, CDs and other deposits in your name or held through an agent or fiduciary in the same capacity) in the same ownership category.
You are responsible for monitoring the total amount of all direct or indirect deposits held by you or for you with these banks for purposes of determining the amounts eligible for coverage by FDIC insurance, including deposits in brokerage sweep accounts and/or deposit accounts. The limitations on FDIC coverage apply to your deposits, whether made by you on your own or through the Bank Deposit Sweep Program. To assist with calculating your aggregated deposits and the associated insurance coverage, the FDIC has an Electronic Deposit Insurance Estimator.
For more complete information on the Bank Deposit Sweep Programs, please review the comprehensive Standard Bank Deposit Sweep Program – Natural and Non-Natural Persons Disclosure Document
For more information on FDIC insurance coverage and/or current interest rates please click on the appropriate link in the table below.
|Features||Standard Program: Natural Persons||Standard Program: Non-Natural Persons|
|Eligibility||All Non-Entity accounts excluding Advisory Discretionary Retirement accounts||All entity accounts, including Corporations, Partnerships, LLCs, etc. (excluding trusts)|
|Banks in Program||Multiple banks per geographical region to insure up to $2.5 million of client funds for Individual accounts and $5.0 million for Joint accounts. Click here for the Standard Program - Natural Persons Bank List.||Multiple banks per geographical region to insure up to $2.5 million of client funds for Individual accounts and $5.0 million for Joint accounts. Click here for the Standard Program - Non-Natural Persons Bank List.|
Your available cash — including deposits, dividends, interest and proceeds from sales in your brokerage account — will be automatically invested into a money market fund.
Money market funds are sold by prospectus. Please consider the investment objectives, risks, charges and expenses carefully before investing. The prospectus, which contains this and other information, can be obtained by calling your Avantax Financial Professional. Read it carefully before you invest.
The Money Market Sweep is subject to SIPC coverage provisions. Questions regarding SIPC coverage should be directed to the Securities Investor Protection Corporation.
An investment in a money market fund is neither insured nor guaranteed by the FDIC or any other government agency. Although money market funds seek to preserve the value of your investment at one dollar per share, it is possible to lose money by investing in a money market fund. There is no guarantee of a return and past performance is not indicative of future results.
Note: To learn more about these sweep features or alternatives, please contact your Avantax Financial Professional.
The Bank Deposit Sweep Program is the default option for all retail brokerage accounts.
Retail brokerage clients wishing to utilize the Money Market Sweep Program must explicitly opt-in to the Money Market Sweep Program.
Brokerage clients should carefully read the Avantax Investment Services Regulation Best Interest Disclosure document for additional information regarding Conflicts of Interest and additional information specific to the use of the Cash Sweep Program (including the Standard Bank Deposit Sweep Program and the Money Market Sweep Program).
The Money Market Sweep Program is the sole cash sweep option available for 401(k) related advisory accounts.
The Bank Deposit Sweep Program is the sole cash sweep option available to all advisory accounts, except 401(k) related advisory accounts.
Advisory clients should carefully read the applicable Avantax Advisory Services Form ADV Part 2A or Wrap Brochure for additional information regarding Conflicts of Interest and additional information specific to the use of the Bank Deposit Sweep Program within advisory account.