Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.Ĭlients should refer to the appropriate prospectus or NM FDIC Insured Deposit Program Disclosure Statement for important information. An investment in any money market fund is not insured or guaranteed by the FDIC or any government agency. Money market funds are subject to SIPC coverage limits, but money market funds are not insured against market loss. FDIC insured deposit programs are not covered by the SIPC. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.Ĭash sweep product yields fluctuate. Financial Representatives do not give legal or tax advice. All investments carry some level of risk including the potential loss of principal invested.

* No investment strategy can guarantee a profit or protect against loss. To be fair, whatever yield you earn on uninvested cash in an investment account isn’t going to make you rich, but every little bit counts on the way to building wealth. Unlike many firms that “tier” their FDIC insured cash sweep programs and pay different rates for different cash balances, Northwestern Mutual’s FDIC Insured Deposit Program, as of June 17, pays a consistent and competitive rate of 1.63 percent* for all client balances, regardless of size.Īre you paying a fee? Keep in mind, brokers or investment firms typically charge a fee to offer cash sweep services – so make sure you know what you are earning and what you might be paying. This variability is due to the types of investments that each cash sweep program utilizes (invests in), as well as the rate that they are willing to pay for your cash sweep balances. The interest or dividend you earn on cash sweep balances will typically vary with every firm’s cash sweep program. And although your cash “moves” around, it’s always accessible when you choose to invest in longer term investments.Ĭrediting rates vary. At the end of every month you’ll receive an interest or dividend payment. In a cash sweep, an investment firm figuratively sweeps clients’ uninvested cash balances into a (again figurative) dust pan and empties it into either FDIC-insured accounts held at one or a network of banks, or into one of several money market mutual fund offerings. This is one, be it rare, case when financial jargon works well. Here’s what you need to know about cash sweeps. That’s why it’s a good idea to know how your money is invested. That’s because your investment firm transfers that cash into investments that provide for daily liquidity. It’s what’s called a cash sweep program and most investment firms handle this aspect of their business a little differently. But do you know what happens to that idle cash in the meantime?įor starters, it may not exactly be idle.ĭepending on the investment vehicle used and the dollar amount invested, that cash earns interest and/or dividends every month. Whether you have $1,000 or $1 million invested, there’s a good chance you’ll hold some cash in your investment account(s) at some point, whether it’s proceeds from a sale, dividends or routine contributions. Educational Resources About Family & Work.Educational Resources About Everyday Money.Educational Resources About Financial Planning.Disability Insurance Calculator Money Parachute icon.

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Cash sweep vehicle definition