Ameritrade has a cash sweep option called the Total Asset Plan (TAP) which offers a significantly higher interest rate on cash than the default Ameritrade cash sweep option. When you first setup an Ameritrade account, you are put into a cash sweep option that pays less than 1% interest. By contrast, as a participant in the TAP, the cash sweep is offered through money market funds at "The Reserve" (website: ther.com). There are a variety of taxable and tax-free money funds available. For example, the taxable Primary Money Market fund pays about 4.4%. Personally, I chose the California Tax-Exempt fund which pays about 2.4%.
But, don't go looking for the Total Asset Plan on the Ameritrade website; it's not there. In order to setup this account, I needed to talk to a customer service representative. In fact, I would not have even known that the TAP option existed without speaking to a real person at Ameritrade. I don't know why they keep the TAP a secret from most investors.
Lastly, having gone through the application process once, I now know where to find the TAP application on the Internet. However, since this is a "hidden" option (that Ameritrade doesn't want the average person to know about), I would suggest calling Ameritrade to inquire about it.
pfstock
Creating a Retirement "Paycheck"
1 month ago
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3 comments:
$100,000 = 4.4%
25k - 100k = 1.65%
< 25k = .4%
Update for Total Asset Plan information posted earlier. As of 6/6/07 (phone conversation with TDAmeritrade).
P.S. I did have to ask about "TAP", they were not forthcoming. :)
thank you for posting this. about midway 2007 i called ameritrade and switched to the reserve. now im doing my taxes and i think i have a seperate 1099div from the reserve. it isnt included with the turbotax import from ameritrade... so i have to report that manually in turbotax, right? thanks, jbb
be glad those did not invest in this plan. Since the reserve went belly up. people upto lost 10% of the value.
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