Cash Sweep at Online-Only Banks — College Saver
Situational fit — this combination may work in a specific context but is not the primary recommendation.
Situational fit A Brokerage Cash Sweep at a online-only banks is not the primary recommendation for a college saver, but it may serve a specific niche in a broader deposit strategy. See the analysis below for when it makes sense.
About College Saver Depositors
Saving for education costs on a 5–18 year horizon. Values predictability; considers CDs for fixed tranches alongside a 529, not as a replacement.
About Brokerage Cash Sweep at Online-Only Banks
The default rate applied to uninvested cash sitting in a brokerage account. Most brokerages default to extremely low rates (0.01–0.50%), quietly siphoning yield from idle capital.
Ally, Marcus, Discover Bank, American Express Bank. Consistently lead rate tables by 1–3 percentage points due to near-zero branch overhead.
Rate and Insurance at a Glance
| Attribute | Details (as of 15 May 2026) |
|---|---|
| Typical APY | 0.01–4.50% |
| Minimum balance | None (most institutions) |
| FDIC insured | No |
| NCUA insured | No |
Key Features for This Profile
- Automatic — cash sweeps without action
- Some brokerages now offer FDIC-insured sweep programs
- Can be replaced with money market funds at higher yield
What to Watch Out For
- Default rates are often negligible (0.01–0.45%)
- SIPC covers up to $250,000 in cash — NOT FDIC insurance
- Moving off the default sweep may require manual action
Tell us your balance, time horizon, and profile — we narrow to the specific institution and account that fits.
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