Get a Higher Interest Rate for The Idle Cash In Your Brokerage Account
Published 9/21/07 (Modified 3/8/11)
Are you like me? Do you keep idle cash sitting in your investment brokerage account while waiting for a juicy investing opportunity to come along? If so, you might want to make sure that idle cash is getting the best interest rate it can.
The stock market's been volatile lately so I've chosen to park a sizable amount of cash in my primary investment account as I wait for the right buy opportunity. But if you're like most people who adopt an old fashioned buy and hold strategy, you might not realize how low of a return you are getting on that idle cash. Your cash pile may be missing out on some great opportunities as it sits parked in your brokerage account. That's because many brokerages only pay you a pitiful rate of return on idle cash by default. Oftentimes, brokerages pay an interest rate as low as 1%, while they make a bundle by investing your money for themselves.