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What Is Cash Sweep?

Views 25652022.09.21

https://courseimg.futunn.com/2022063000000376223571fb175.png

Key takeaways

  • Cash Sweep is a finance management service offered by Futu in collaboration with banks.

  • The Cash Sweep program bears no effect on the purchasing power of the brokerage accounts, automated operations and funds protected by deposit insurance

  • It's quite easy to join or exit Cash Sweep

Understanding Cash Sweep

If there's excess money on your securities account and you do not want to bear more risks of market volatility, to generate some extra income on that excess cash. Joining Cash Sweep may be a good choice.

Cash Sweep is a finance management service offered by Futu in collaboration with banks, currently open to US taxpayers only. It is a cash sweep program which deposits funds from the securities account into a bank to earn interest.

Banks that collaborate with Futu include Bank United, Cadence Bank, EastWest Bank and Preferred Bank. Please refer to the real-time list of cooperative banks as it might be updated. Clients can also filter out specific banks.

Advantages of Cash Sweep

Apart from earning interest, Cash Sweep has other advantages:

Firstly, it does not affect the purchasing power of the securities account. Funds deposited by clients in the bank will still be part of the purchasing power of the securities account, so trades will not be impacted.

Secondly, operations are automated. When the balance in the securities account becomes negative, funds will be automatically redeemed from the bank for repayment without creating margin interest. When there's cash in the account, funds will be automatically deposited back in the bank to earn interest.

Thirdly, funds are protected by deposit insurance. Bank deposits held by clients through Futu and other brokerage firms are uniformly protected by the Federal Deposit Insurance Corporation (FDIC). The maximum insurable amount in each depository bank is $250,000, and $500,000 for joint accounts.

How to join Cash Sweep?

It only takes a few simple steps to join Cash Sweep. It's quite easy to exit the program, too.

On the securities account page of FUTU US, tap "Up" on the right side of the "Cash" tab, or the "Cash Sweep" portal below, then you can start Cash Sweep procedures and participate in this money management plan. The specific steps are shown in the picture below.

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If you want to exit the program, all you need to do is to tap the close button in the upper right corner shown in the fourth screenshot above.

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This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content.

Moomoo is a financial information and trading app offered by Moomoo Technologies Inc.

In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).

In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial Singapore Pte. Ltd. is a Capital Markets Services Licence (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore.

In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our websites https://www.futuau.com and https://www.moomoo.com/au. Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd. and Futu Securities (Australia) Ltd are affiliated companies.

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