Schwab SWSXX going away

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sixtyforty
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Schwab SWSXX going away

Post by sixtyforty » Sat Jan 12, 2019 12:25 pm

FYI: For those of you that have Schwab accounts and might not be aware; SWSXX which was the default cash sweep feature, earning around 2.0% is being liquidated across all accounts over time and moved to a bank sweep fund earning 0.33%. Below is the email I got from Schwab after discussing this with them over the chat line.

In October 2018, Charles Schwab Investment Management, Inc. sent shareholders a letter(s) explaining that a number of sweep fund/share classes (“Fund/Share Classes”) will be liquidated on or about April 10, 2019. Your Schwab account(s) is currently enrolled in one or more of the Fund/Share Classes noted in the letter(s). Between January and April 2019, your shares in one or more of the Fund/Share Classes will be redeemed, the proceeds will be automatically credited to your account(s), and your account(s) will be enrolled in a new cash feature, Bank Sweep.1


The Bank Sweep feature, which is FDIC-insured, generally offers a lower yield than can potentially be achieved by the Fund/Share Classes. As of December 31, 2018, the rate on Bank Sweep is 0.33% for cash account balances up to $999,999 and 0.70% for cash account balances $1 million and over.* The Fund/Share Classes are not FDIC-insured and their current yields are listed on schwab.com/sweepfunds. If you would like to learn more about the Cash Features Program, please review the Cash Features Disclosure Statement.
"Simplicity is the ultimate sophistication" - Leonardo Da Vinci

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Doc
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Re: Schwab SWSXX going away

Post by Doc » Sat Jan 12, 2019 1:34 pm

Schwab moved the sweep accounts in both of our accounts to Schwab Bank sometime last year..

I'm now using Schwab Value Advantage MM (SWVXX) which is a purchase MM account not a sweep account so it takes an extra day to "settle" sometimes. That's not an issue in our taxable account because it is a margin account. (The margin interest for one day is negligible.) My wife's ROTH dividends are mostly reinvested so using the purchase MM fund is not much of a hassle there either.

But the change did aggravate me for a couple of months.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

123
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Re: Schwab SWSXX going away

Post by 123 » Sat Jan 12, 2019 1:41 pm

Doc wrote:
Sat Jan 12, 2019 1:34 pm
...But the change did aggravate me for a couple of months.
+1 It still aggravates me. I've come pretty close to moving multiple accounts to Fidelity because of it. Only saving grace for Schwab is that I'm otherwise comfortable with Schwab and would prefer to have accounts at a couple of brokerages so I'm not on the radar as a big fish.
The closest helping hand is at the end of your own arm.

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sixtyforty
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Re: Schwab SWSXX going away

Post by sixtyforty » Sat Jan 12, 2019 2:02 pm

Doc wrote:
Sat Jan 12, 2019 1:34 pm
Schwab moved the sweep accounts in both of our accounts to Schwab Bank sometime last year..

I'm now using Schwab Value Advantage MM (SWVXX) which is a purchase MM account not a sweep account so it takes an extra day to "settle" sometimes. That's not an issue in our taxable account because it is a margin account. (The margin interest for one day is negligible.) My wife's ROTH dividends are mostly reinvested so using the purchase MM fund is not much of a hassle there either.

But the change did aggravate me for a couple of months.
SWVXX is what I'm using as well.
"Simplicity is the ultimate sophistication" - Leonardo Da Vinci

ofckrupke
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Re: Schwab SWSXX going away

Post by ofckrupke » Sat Jan 12, 2019 2:02 pm

123 wrote:
Sat Jan 12, 2019 1:41 pm
Doc wrote:
Sat Jan 12, 2019 1:34 pm
...But the change did aggravate me for a couple of months.
+1 It still aggravates me. I've come pretty close to moving multiple accounts to Fidelity because of it. Only saving grace for Schwab is that I'm otherwise comfortable with Schwab and would prefer to have accounts at a couple of brokerages so I'm not on the radar as a big fish.
My response, in terms of keeping a bigger slice of the market return on my spare change, has instead been to accept a little bit of term risk via SWSBX (short term bond index fund, homolog to Vanguard's VBIRX). Schwab's managerial cut on this is 0.06% (cf 0.35% for SWVXX); and for this they get to do the tax lot accounting too, so my spite labor is limited to annual transcription of any realized capital gain/loss, and calculation of the exempt portion of dividend income (from the fund's treasuries) under state taxation.

RetiredAL
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Re: Schwab SWSXX going away

Post by RetiredAL » Sat Jan 12, 2019 2:12 pm

I take care of several personal and family accounts at Schwab. A couple of the older ones have SWSXX as the core. For the others, I've been using SWSVXX for all but a small cash position. This has not created any issues for me to date. Other than having the one extra step for the occasional transactions, not a big deal to me. I'm not an impulsive trader that wants everything instantaneous. I learned years ago not to jump over a fire without careful fore-thought, otherwise my posterior could get scorched.

Thanks for the heads up to watch out for the SWSXX being converted in the future. When it happens, I'll just buy the SWVXX.

stan1
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Re: Schwab SWSXX going away

Post by stan1 » Sat Jan 12, 2019 2:18 pm

Even at Vanguard I have to go in and move cash out of Federal Money Market to Treasury, Prime, or CA Tax Exempt. I haven't found a scenario yet where keeping money in Federal for more than a few days was the best choice. Yes I am optimizing and Federal Money Market pays a lot more than 0.33% right now.

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Re: Schwab SWSXX going away

Post by boglewill34 » Sat Jan 12, 2019 2:26 pm

ofckrupke wrote:
Sat Jan 12, 2019 2:02 pm
123 wrote:
Sat Jan 12, 2019 1:41 pm
Doc wrote:
Sat Jan 12, 2019 1:34 pm
...But the change did aggravate me for a couple of months.
+1 It still aggravates me. I've come pretty close to moving multiple accounts to Fidelity because of it. Only saving grace for Schwab is that I'm otherwise comfortable with Schwab and would prefer to have accounts at a couple of brokerages so I'm not on the radar as a big fish.
My response, in terms of keeping a bigger slice of the market return on my spare change, has instead been to accept a little bit of term risk via SWSBX (short term bond index fund, homolog to Vanguard's VBIRX). Schwab's managerial cut on this is 0.06% (cf 0.35% for SWVXX); and for this they get to do the tax lot accounting too, so my spite labor is limited to annual transcription of any realized capital gain/loss, and calculation of the exempt portion of dividend income (from the fund's treasuries) under state taxation.
Good idea. Do you have to track the treasuries manually?

ofckrupke
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Re: Schwab SWSXX going away

Post by ofckrupke » Sat Jan 12, 2019 2:38 pm

boglewill34 wrote:
Sat Jan 12, 2019 2:26 pm
Good idea. Do you have to track the treasuries manually?
No. Schwab includes an insert with the paper 1099-div detailing the fraction of income from US Govt Obligations in each of 50+ sundry funds; and as applicable, affirming that a fund's portfolio asset fraction satisfies my state's 50% exempt-asset threshold for nonzero exemption. Last year's insert was titled 2017 Supplementary Tax Information; each year's edition is published as a PDF with an incremented title in a searchbot-visible place, for the paperfree crowd. The back face lists income source breakdown by state for several Schwab municipal bond funds.
Last edited by ofckrupke on Sat Jan 12, 2019 2:46 pm, edited 1 time in total.

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Re: Schwab SWSXX going away

Post by jeffyscott » Sat Jan 12, 2019 2:46 pm

Does Schwab let you trade directly from a "purchased" money market fund, as fidelity does? Or do you have to move funds to the FDIC sweep to cover trades.

Fidelity includes the balance in purchased money market in the "cash to trade" balance. Fidelity allows only bank sweep for their new individual HSAs, unlike other accounts there.
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Re: Schwab SWSXX going away

Post by drummerboy » Sat Jan 12, 2019 3:14 pm

jeffyscott wrote:
Sat Jan 12, 2019 2:46 pm
Does Schwab let you trade directly from a "purchased" money market fund, as fidelity does? Or do you have to move funds to the FDIC sweep to cover trades.
Schwab will require you to "sell" the purchased money market fund to raise the cash.

Fortunately, you can still request a trade, put in the sell amount later in the day. And as long as the cash is in the account on "settlement" day, it all works fine.

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Re: Schwab SWSXX going away

Post by tmcc » Sat Jan 12, 2019 3:43 pm

drummerboy wrote:
Sat Jan 12, 2019 3:14 pm
jeffyscott wrote:
Sat Jan 12, 2019 2:46 pm
Does Schwab let you trade directly from a "purchased" money market fund, as fidelity does? Or do you have to move funds to the FDIC sweep to cover trades.
Schwab will require you to "sell" the purchased money market fund to raise the cash.

Fortunately, you can still request a trade, put in the sell amount later in the day. And as long as the cash is in the account on "settlement" day, it all works fine.
I have been charged margin interest for a day several times when I trade on the same day that I sell the MM. It doesn't settle til 1 day later...

ie, if you sell the Schwab MM fund and trade on the same day, you will have a 1 day margin loan in the amount of the cash shortfall to cover the trade.

cap396
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Re: Schwab SWSXX going away

Post by cap396 » Sat Jan 12, 2019 4:22 pm

But doesn't it depend on what you are trading? For example, doing a buy order for an ETF and a sell order for SWVXX on the same day should be okay, because ETFs settle a day later than mutual funds, right?

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Re: Schwab SWSXX going away

Post by Doc » Sat Jan 12, 2019 4:30 pm

drummerboy wrote:
Sat Jan 12, 2019 3:14 pm
Fortunately, you can still request a trade, put in the sell amount later in the day. And as long as the cash is in the account on "settlement" day, it all works fine.
Sell later in the day is fine but I got gigged for the same settlement day recently in the cash account. Schwab interprets the trade violation (free riding?) rule as same trade date not same settlement date.
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Re: Schwab SWSXX going away

Post by BigFoot48 » Sat Jan 12, 2019 5:58 pm

I bought $10,000 of Schwab Value Advantage MM (SWVXX) in August based on a similar discussion. (Comment edited for accuracy.)
Aug 13 - bought
Actual dividends paid:
Sep 17: $17.14
Oct 15: $15.12
Nov 15: $17.50
Dec 31: $27.98
Last edited by BigFoot48 on Sun Jan 13, 2019 12:56 am, edited 5 times in total.
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Nate79
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Re: Schwab SWSXX going away

Post by Nate79 » Sat Jan 12, 2019 6:09 pm

BigFoot48 wrote:
Sat Jan 12, 2019 5:58 pm
I bought $10,000 of Schwab Value Advantage MM (SWVXX) in August based on a similar discussion. I must say the returns are under-whelming. A short term bond fund might be much better.
Dividends paid:
Sep $17.14
Oct $15.12
Nov $17.50
Dec $27.98
SWVXX is a money market fund with a yield of about 2.3%. Your dividends are based on the number of days you hold it and are paid monthly. I don't understand how you think its return is underwhelming when it is trivial to calculate how much you can expect each month.

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BigFoot48
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Re: Schwab SWSXX going away

Post by BigFoot48 » Sat Jan 12, 2019 6:14 pm

Nate79 wrote:
Sat Jan 12, 2019 6:09 pm
BigFoot48 wrote:
Sat Jan 12, 2019 5:58 pm
I bought $10,000 of Schwab Value Advantage MM (SWVXX) in August based on a similar discussion. I must say the returns are under-whelming. A short term bond fund might be much better.
Dividends paid:
Sep $17.14
Oct $15.12
Nov $17.50
Dec $27.98
SWVXX is a money market fund with a yield of about 2.3%. Your dividends are based on the number of days you hold it and are paid monthly. I don't understand how you think its return is underwhelming when it is trivial to calculate how much you can expect each month.
OOPS: Please disregard my comment.
Last edited by BigFoot48 on Sun Jan 13, 2019 12:54 am, edited 3 times in total.
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cap396
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Re: Schwab SWSXX going away

Post by cap396 » Sat Jan 12, 2019 6:16 pm

The 2.29% must be the annual yield, not the monthly yield

increment
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Re: Schwab SWSXX going away

Post by increment » Sat Jan 12, 2019 6:25 pm

cap396 wrote:
Sat Jan 12, 2019 6:16 pm
The 2.29% must be the annual yield, not the monthly yield
2.29% every month would compound to 31% per year!

Also, note that usually Schwab pays the dividend around the middle of the month, but in December it's at the end of the month. That December payment is really for 1.5 months.

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Re: Schwab SWSXX going away

Post by onourway » Sat Jan 12, 2019 6:27 pm

BigFoot48 wrote:
Sat Jan 12, 2019 6:14 pm
Nate79 wrote:
Sat Jan 12, 2019 6:09 pm
BigFoot48 wrote:
Sat Jan 12, 2019 5:58 pm
I bought $10,000 of Schwab Value Advantage MM (SWVXX) in August based on a similar discussion. I must say the returns are under-whelming. A short term bond fund might be much better.
Dividends paid:
Sep $17.14
Oct $15.12
Nov $17.50
Dec $27.98
SWVXX is a money market fund with a yield of about 2.3%. Your dividends are based on the number of days you hold it and are paid monthly. I don't understand how you think its return is underwhelming when it is trivial to calculate how much you can expect each month.
Because $27.98 on a $10,000 fund is 0.28% for a month, not the 2.29% it is claimed to yield in Dec. Looks like I need to call Schwab. Expectations and actual dividends appear to have diverged.
:confused

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Re: Schwab SWSXX going away

Post by BobDaBlob » Sat Jan 12, 2019 6:27 pm

BigFoot...
What part of these returns is under-whelming?
Seems right on par with 2+% per year...
If you find a vehicle that pays 2+ per month...please let us all know :beer

Bob
Too much of everything is just enough...

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Re: Schwab SWSXX going away

Post by BigFoot48 » Sat Jan 12, 2019 6:34 pm

BobDaBlob wrote:
Sat Jan 12, 2019 6:27 pm
BigFoot...
What part of these returns is under-whelming?
Seems right on par with 2+% per year...
If you find a vehicle that pays 2+ per month...please let us all know :beer

Bob
Thank you! I got myself confused there. I think I'll keep it!
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Re: Schwab SWSXX going away

Post by MnD » Sat Jan 12, 2019 7:44 pm

tmcc wrote:
Sat Jan 12, 2019 3:43 pm
drummerboy wrote:
Sat Jan 12, 2019 3:14 pm
jeffyscott wrote:
Sat Jan 12, 2019 2:46 pm
Does Schwab let you trade directly from a "purchased" money market fund, as fidelity does? Or do you have to move funds to the FDIC sweep to cover trades.
Schwab will require you to "sell" the purchased money market fund to raise the cash.

Fortunately, you can still request a trade, put in the sell amount later in the day. And as long as the cash is in the account on "settlement" day, it all works fine.
I have been charged margin interest for a day several times when I trade on the same day that I sell the MM. It doesn't settle til 1 day later...

ie, if you sell the Schwab MM fund and trade on the same day, you will have a 1 day margin loan in the amount of the cash shortfall to cover the trade.
What exactly are you trading that settles T+0?
Schwab MM funds settle T+1 which has worked well for me given anything I've traded is T+1, 2 or 3 and hence have never paid a penny in margin interest at Schwab.
Last edited by MnD on Sat Jan 12, 2019 7:50 pm, edited 1 time in total.

tmcc
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Re: Schwab SWSXX going away

Post by tmcc » Sat Jan 12, 2019 7:48 pm

MnD wrote:
Sat Jan 12, 2019 7:44 pm
tmcc wrote:
Sat Jan 12, 2019 3:43 pm
drummerboy wrote:
Sat Jan 12, 2019 3:14 pm
jeffyscott wrote:
Sat Jan 12, 2019 2:46 pm
Does Schwab let you trade directly from a "purchased" money market fund, as fidelity does? Or do you have to move funds to the FDIC sweep to cover trades.
Schwab will require you to "sell" the purchased money market fund to raise the cash.

Fortunately, you can still request a trade, put in the sell amount later in the day. And as long as the cash is in the account on "settlement" day, it all works fine.
I have been charged margin interest for a day several times when I trade on the same day that I sell the MM. It doesn't settle til 1 day later...

ie, if you sell the Schwab MM fund and trade on the same day, you will have a 1 day margin loan in the amount of the cash shortfall to cover the trade.
What exactly are are you trading that settles T+0?
Schwab MM funds settle T+1 which has worked well for me in anything I've traded and never paid a penny in margin interest.
I bought SCHX and sold SWVXX on the same day

I was charged margin interest for the SCHX purchase until SWVXX settled.

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Re: Schwab SWSXX going away

Post by MnD » Sat Jan 12, 2019 7:56 pm

tmcc wrote:
Sat Jan 12, 2019 7:48 pm
MnD wrote:
Sat Jan 12, 2019 7:44 pm
tmcc wrote:
Sat Jan 12, 2019 3:43 pm
drummerboy wrote:
Sat Jan 12, 2019 3:14 pm
jeffyscott wrote:
Sat Jan 12, 2019 2:46 pm
Does Schwab let you trade directly from a "purchased" money market fund, as fidelity does? Or do you have to move funds to the FDIC sweep to cover trades.
Schwab will require you to "sell" the purchased money market fund to raise the cash.

Fortunately, you can still request a trade, put in the sell amount later in the day. And as long as the cash is in the account on "settlement" day, it all works fine.
I have been charged margin interest for a day several times when I trade on the same day that I sell the MM. It doesn't settle til 1 day later...

ie, if you sell the Schwab MM fund and trade on the same day, you will have a 1 day margin loan in the amount of the cash shortfall to cover the trade.
What exactly are are you trading that settles T+0?
Schwab MM funds settle T+1 which has worked well for me in anything I've traded and never paid a penny in margin interest.
I bought SCHX and sold SWVXX on the same day

I was charged margin interest for the SCHX purchase until SWVXX settled.
Schwab ETF's settle T+2. You should not have been charged any margin interest.
In fact you should have been able to sell SWVXX the next trading day and settled without margin expense.
I would suggest you call Schwab and ask what is going on with margin expense on that trade.

For example from my history......
SCHC - SCHWAB INTERNATNAL SMALLCAP EQY ETF
Transactions
Trade Details
Trade Date: 12/26/2018
Settle Date: 12/28/2018

cap396
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Re: Schwab SWSXX going away

Post by cap396 » Sat Jan 12, 2019 8:26 pm

tmcc wrote:
Sat Jan 12, 2019 7:48 pm

I bought SCHX and sold SWVXX on the same day

I was charged margin interest for the SCHX purchase until SWVXX settled.
Did you place the sell order for SWVXX after the market closed?

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Re: Schwab SWSXX going away

Post by tmcc » Sat Jan 12, 2019 8:31 pm

No, the sell occurred at the same time as the ETF buy but it is a mutual fund and the fill occurs after hours.

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Re: Schwab SWSXX going away

Post by ofckrupke » Sat Jan 12, 2019 10:01 pm

MnD wrote:
Sat Jan 12, 2019 7:56 pm
In fact you should have been able to sell SWVXX the next trading day and settled without margin expense.
This part isn't right; irrespective of getting settled funds from sale on account on settlement day for the buy, it would represent a free ride because over the first night both the purchased T+2_settlement holding and the T+1_settlement mutual fund holding would be "in the market"; that is, the transacted dollars are working doubly, in a risk/return sense, for the accountholder. In a cash account this is a trading violation; in a margin account, the double-dip is eliminated by creating an overnight loan.

But if both orders were submitted timely and executed on the same day I don't see why tmcc was charged a night's margin interest; Schwab should be called on that.

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Re: Schwab SWSXX going away

Post by Doc » Sun Jan 13, 2019 8:48 am

ofckrupke wrote:
Sat Jan 12, 2019 10:01 pm
But if both orders were submitted timely and executed on the same day I don't see why tmcc was charged a night's margin interest; Schwab should be called on that.
If I place a transfer out and sell SWVXX the same day I get charged margin interest. IIRC if you buy SWVXX and sell an ETF the same day you will get charged margin interest. Strangely if you make the latter pair in a cash account you will not be gigged for a trade violation but the MM probably doesn't collect dividends for that day. I think Vanguard is the same here.

in any case the amount is trivial.
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Re: Schwab SWSXX going away

Post by jeffyscott » Sun Jan 13, 2019 9:12 am

Doc wrote:
Sun Jan 13, 2019 8:48 am
ofckrupke wrote:
Sat Jan 12, 2019 10:01 pm
But if both orders were submitted timely and executed on the same day I don't see why tmcc was charged a night's margin interest; Schwab should be called on that.
If I place a transfer out and sell SWVXX the same day I get charged margin interest. IIRC if you buy SWVXX and sell an ETF the same day you will get charged margin interest. Strangely if you make the latter pair in a cash account you will not be gigged for a trade violation but the MM probably doesn't collect dividends for that day. I think Vanguard is the same here.

in any case the amount is trivial.
I would assume the money market interest would be the same with or without margin? Or did you intend to imply that in a margin account, the money would collect interest on that day?
press on, regardless - John C. Bogle

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Doc
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Re: Schwab SWSXX going away

Post by Doc » Sun Jan 13, 2019 10:25 am

jeffyscott wrote:
Sun Jan 13, 2019 9:12 am
I would assume the money market interest would be the same with or without margin? Or did you intend to imply that in a margin account, the money would collect interest on that day?
I don't know. I think at Vanguard if you sell a T1 and buy a T2 on the same day the money for the sale does not sweep to your settlement find but sits as a "trade balance" for that day.

Since Schwab's settlement procedures are not the same as Vanguard's I don't know what happens there since I rarely trade there for amounts small enough to make me look at what interest I might collect on that one day. And I wouldn't know until the end of month if I could even due the calculation with enough precision.

It has been my experience that trade day balances do not work the same way in margin vs cash accounts.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Schwab SWSXX going away

Post by MnD » Sun Jan 13, 2019 10:56 am

ofckrupke wrote:
Sat Jan 12, 2019 10:01 pm
MnD wrote:
Sat Jan 12, 2019 7:56 pm
In fact you should have been able to sell SWVXX the next trading day and settled without margin expense.
This part isn't right; irrespective of getting settled funds from sale on account on settlement day for the buy, it would represent a free ride because over the first night both the purchased T+2_settlement holding and the T+1_settlement mutual fund holding would be "in the market"; that is, the transacted dollars are working doubly, in a risk/return sense, for the accountholder. In a cash account this is a trading violation; in a margin account, the double-dip is eliminated by creating an overnight loan.
Well I must have a charmed Schwab account then because I have matched T+2 and T+3 purchases with T+1 SWVXX sales to all settle on the same day on numerous occasions and have never been charged any margin interest in a margin-enabled taxable account. Perhaps I don't get the a day or two SWVXX interest, but they certainly don't let me know about if that's the case.

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Re: Schwab SWSXX going away

Post by Doc » Sun Jan 13, 2019 11:15 am

ofckrupke wrote:
Sat Jan 12, 2019 10:01 pm
This part isn't right; irrespective of getting settled funds from sale on account on settlement day for the buy, it would represent a free ride because over the first night both the purchased T+2_settlement holding and the T+1_settlement mutual fund holding would be "in the market"; that is, the transacted dollars are working doubly, in a risk/return sense, for the accountholder. In a cash account this is a trading violation; in a margin account, the double-dip is eliminated by creating an overnight loan.
Sorry I missed this part yesterday. There is apparently some ambiguity in the trade violation rules. There's a thread on the subject I think from Jeffyescott a few weeks ago. The SEC (?) rules discuss same settlement periods leaving some option for the brokers wben there are different settlement periods.

I tested this out with a trade at Schwab and then "discussed" the violation I purposely created with a Schwab margin specialist. To paraphrase the result: "We are not Vanguard or Fidelity".
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Schwab SWSXX going away

Post by kaneohe » Sun Jan 13, 2019 1:20 pm

Doc wrote:
Sun Jan 13, 2019 11:15 am
ofckrupke wrote:
Sat Jan 12, 2019 10:01 pm
This part isn't right; irrespective of getting settled funds from sale on account on settlement day for the buy, it would represent a free ride because over the first night both the purchased T+2_settlement holding and the T+1_settlement mutual fund holding would be "in the market"; that is, the transacted dollars are working doubly, in a risk/return sense, for the accountholder. In a cash account this is a trading violation; in a margin account, the double-dip is eliminated by creating an overnight loan.
Sorry I missed this part yesterday. There is apparently some ambiguity in the trade violation rules. There's a thread on the subject I think from Jeffyescott a few weeks ago. The SEC (?) rules discuss same settlement periods leaving some option for the brokers wben there are different settlement periods.

I tested this out with a trade at Schwab and then "discussed" the violation I purposely created with a Schwab margin specialist. To paraphrase the result: "We are not Vanguard or Fidelity".
What were you trading? I asked a Schwab rep if there would be margin interest if I bought a Schwab mutual fund (not ETF) and sold the money fund the same day. He said no but I didn't ask 10 of them to get a consensus answer........and even then it might not be the correct answer.

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Doc
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Re: Schwab SWSXX going away

Post by Doc » Sun Jan 13, 2019 1:28 pm

kaneohe wrote:
Sun Jan 13, 2019 1:20 pm
What were you trading? I asked a Schwab rep if there would be margin interest if I bought a Schwab mutual fund (not ETF) and sold the money fund the same day. He said no but I didn't ask 10 of them to get a consensus answer........and even then it might not be the correct answer.
The issue involves the buy/sell pair with different settlement times. In your example both sides are mutual funds with T1 settlement.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Schwab SWSXX going away

Post by kaneohe » Sun Jan 13, 2019 1:35 pm

Doc wrote:
Sun Jan 13, 2019 1:28 pm
kaneohe wrote:
Sun Jan 13, 2019 1:20 pm
What were you trading? I asked a Schwab rep if there would be margin interest if I bought a Schwab mutual fund (not ETF) and sold the money fund the same day. He said no but I didn't ask 10 of them to get a consensus answer........and even then it might not be the correct answer.
The issue involves the buy/sell pair with different settlement times. In your example both sides are mutual funds with T1 settlement.
so was the Schwab rep correct? no margin interest?

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Re: Schwab SWSXX going away

Post by Doc » Sun Jan 13, 2019 3:12 pm

kaneohe wrote:
Sun Jan 13, 2019 1:35 pm
Doc wrote:
Sun Jan 13, 2019 1:28 pm
kaneohe wrote:
Sun Jan 13, 2019 1:20 pm
What were you trading? I asked a Schwab rep if there would be margin interest if I bought a Schwab mutual fund (not ETF) and sold the money fund the same day. He said no but I didn't ask 10 of them to get a consensus answer........and even then it might not be the correct answer.
The issue involves the buy/sell pair with different settlement times. In your example both sides are mutual funds with T1 settlement.
so was the Schwab rep correct? no margin interest?
As long as the money from the sale was more than the cost of what was bought there is not margin interest. Assuming that the rep knew that the sale proceeds were greater than the buy cost he was correct.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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Re: Schwab SWSXX going away

Post by tmcc » Mon Jan 14, 2019 6:48 am

I'll give them a call today, appreciate the discussion. This is not the first time this has happened.

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