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.
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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