Expanded Bank Deposit Sweep. The Expanded Bank Deposit Sweep is the primary Cash Sweep Vehicle for eligible customers. The Expanded Bank Deposit Sweep consists of interest bearing deposit accounts at affiliated and unaffiliated Program Banks. The Expanded Bank Deposit Sweep will provide up to $1.25 million in FDIC insurance ($2.5 million for joint accounts with two or more owners). You may, at any time, elect to exclude the unaffiliated Program Banks from the Expanded Bank Deposit Sweep. If you make this election, you will be in the Standard Bank Deposit Sweep and only two Affiliated Banks will receive your un-invested cash. You may not designate that Affiliated Banks be excluded from the Expanded Bank Deposit Sweep or exclude less than all of the unaffiliated Program Banks. Electing to exclude the unaffiliated Program Banks will result in your un- invested cash not being deposited into those banks or, if already deposited to those banks, we will withdraw your funds from those banks and deposit the funds with the Affiliated Banks in the Standard Bank Deposit Sweep. You will have less FDIC insurance coverage available if you choose to exclude the unaffiliated Program Banks and, if you have sweep deposits in excess of $500,000 ($1 million for joint accounts) you may have uninsured deposits at the Affiliated Banks through the Standard Bank Deposit Sweep. You need to contact us if you wish to change to the Standard Bank Deposit Sweep. Eligible customers may select the Standard Bank Deposit Sweep at account opening or subsequently at any time after the account is opened. Retirement accounts in discretionary advisory programs managed by the Clearing Firm are not eligible for the Expanded Bank Deposit Sweep. Standard Bank Deposit Sweep The Standard Bank Deposit Sweep is available as an alternative to the Expanded Bank Deposit Sweep. The Standard Bank Deposit Sweep consists of interest-bearing deposit accounts at two Program Banks affiliated with our Clearing Firm ("Affiliated Banks"). The Standard Bank Deposit Sweep will provide up to $500,000 in FDIC insurance ($1 million for joint accounts with two or more owners). Retirement accounts in discretionary advisory programs managed by the Clearing Firm are eligible only for the Standard Bank Deposit Sweep, thus for such accounts the primary Cash Sweep Vehicle is the Standard Bank Deposit Sweep. If you do not select a Cash Sweep Vehicle, un-invested cash balances will be placed in the FDIC-Insured Bank Deposit Sweep.
Expanded Bank Deposit Sweep. We and the Program Banks benefit financially from cash balances held in the Expanded Bank Deposit Sweep. With respect to the Banks Affiliated with our Clearing Agent, profitability is determined in large part by the difference or "spread" between the interest they pay on deposits, and the interest or other income they earn on loans, investments, and other assets. Higher rates of interest than the rates credited by the Banks affiliated with our Clearing Agent on Expanded Bank Deposit Sweep deposits may be available outside of the Cash Sweep Program. The participation of the Banks affiliated with our Clearing Agent in the Expanded Bank Deposit Sweep is expected to increase their respective deposits and, accordingly, overall profits. This compensation is subject to change, and we may waive all or any part of this fee at any time without notice. With respect to the Unaffiliated Banks under the Expanded Bank Deposit Sweep Program, the financial benefits available to us may differ as between retirement accounts relative and non-retirement accounts. For retirement accounts (including IRAs), each unaffiliated Program Bank in the Expanded Bank Deposit Sweep program will pay us a uniform fee up to 79% of the Federal Funds Effective Rate of the average daily total retirement account deposit balances at that unaffiliated Program Bank. Because each unaffiliated Program Bank will pay us the same amount on retirement accounts, we have no incentive to make deposits with any particular unaffiliated Program Bank. In the case of non-retirement accounts, each affiliated and unaffiliated Program Bank in the Expanded Bank Deposit Sweep Program will pay us an amount not to exceed a percentage (equivalent to Federal Funds Target plus 30 basis points (0.30%)) of the daily total non-retirement deposit balances at that Program Bank, however the amount of that fee may vary from one Program Bank to the next. This amount includes our fee and interest payable to participating accounts in the Expanded Bank Deposit Sweep. This compensation is subject to change, and we may waive all or any part of this fee at any time without notice. In addition, certain of our employees, including financial professionals, may receive incentive compensation based in part on new assets in the Expanded Bank Deposit Sweep or the profitability of the Expanded Bank Deposit Sweep for the Affiliated Banks and their joint parent company, Xxxxx Fargo & Company. Under the Expanded Bank Deposit Sweep, Clearing Agent ...
