What to Do With Cash Sitting in Your Brokerage Account 2026

What to Do With Cash Sitting in Your Brokerage Account

Uninvested brokerage cash earns nothing — or near nothing — in default sweep accounts at some brokers. Here is how to maximize the return on cash you’re holding between investments. Figures below are approximate as of September 2026 and move with short-term interest rates — confirm the current yield before relying on a specific number.

Default Sweep / Money Market Rates by Major Broker (September 2026)

Key finding: Schwab’s default bank sweep pays far less than its own money market fund alternative (SWVXX) or than Fidelity’s default money market fund (SPAXX). This is a significant difference if you keep substantial cash in a Schwab brokerage account and haven’t manually switched your core position.

4 Ways to Put Brokerage Cash to Work

Option 1: Switch to a Money Market Mutual Fund (Easiest)

Within your brokerage, manually set your “core position” (settlement fund) to a money market mutual fund:

• Fidelity: SPAXX (Government Money Market) — default, 3.38% as of September 19, 2026
• Vanguard: VMFXX (Federal Money Market Fund) — roughly 3.6–3.7%
• Schwab: You must manually buy SWVXX (Schwab Prime Advantage Money Fund, formerly Value Advantage) to get a meaningfully higher rate than the default bank sweep

How to switch at Schwab: Search for SWVXX in your account and buy shares; proceeds from sales automatically land in SWVXX rather than the default sweep.

Option 2: Purchase Treasury Bills

Buy T-bills directly through your brokerage:

• Available commission-free at Fidelity, Schwab, Vanguard, Interactive Brokers
• Yields per the Treasury’s daily par yield curve (late August 2026): roughly 3.80% for 1–3 month bills, roughly 3.94% for 6-month, roughly 4.02% for 1-year — check treasurydirect.gov for the current yield
• State income tax exempt
• When the T-bill matures, funds return to your settlement account

Option 3: Short-Term Bond ETF

For a liquid alternative to money market funds:

• SGOV (iShares 0-3 Month Treasury Bond ETF): roughly 3.6% 30-day SEC yield as of mid-September 2026
• BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): similar range, since it tracks the same short end of the Treasury curve
• Highly liquid (can sell any trading day); dividends can typically be reinvested automatically

Option 4: Transfer Excess Cash to a HYSA

If you have cash you won’t invest for 6–12 months, transferring it to an external HYSA may earn more than a brokerage money market fund sweep — top HYSAs were paying roughly 4.00–4.50% APY as of September 2026, versus roughly 3.3–3.7% for the money market funds above. It also provides FDIC insurance and full liquidity. Downside: 1–3 business days to transfer back when ready to invest.

For Schwab Customers: The Cash Drag Problem

Schwab’s default bank sweep paid only around 0.45% APY as of September 2026. On $50,000 in uninvested cash left in the default sweep instead of Schwab’s own SWVXX money market fund (roughly 3.5–3.6%), that gap costs on the order of $1,500/year. The solution: buy SWVXX manually. This has no transaction fee and maintains similar liquidity to the default sweep.

Related Guides

• Cash Management Accounts vs Brokerage Accounts — CMA vs brokerage
• Ways to Use a Broker for Savings — brokerage as savings vehicle
• Banking Basics Hub — complete banking guide

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.