Yes. Before brokerages were part of banks, cash in a brokerage account was usually stored in a money-market fund, with whatever interest money market funds were paying. Once merging with a bank, cash was swept into an in-house bank account.
This didn't matter much when money market funds were paying near zero interest.
But the zero interest rate era is over. Except for demand deposits in banks, which pay well below money market rates. Often near zero.
That's what's going on here.
It's a conflict of interest created by the end of Glass-Stegall, which kept brokerages and banks apart.
This didn't matter much when money market funds were paying near zero interest. But the zero interest rate era is over. Except for demand deposits in banks, which pay well below money market rates. Often near zero.
That's what's going on here.
It's a conflict of interest created by the end of Glass-Stegall, which kept brokerages and banks apart.