Margin loan apr is ~ 13%, and can be cleared in about a day. Schwab will alert when margin is utilized. HOWEVER,The downside is that Schwab's sweep payment is miserly, <1%. The only way I can see around it is buying a money market fund in the linked brokerage and having automatic payments to the checking account autodraft over to the brokerage account. That would mean needing to monitor it and sell to avoid very high margin loan payments however.
I realized that most ($ wise) of my checking W/D occurs with credit card payments, income tax pre-payments, and property tax. For any of those payments I first release MMF funds in the linked brokerage account. The rest of my checking account activity is peanuts, and I cover it by starting with ~ $500 of cash to the checking account each month. The lost interest at todays 5% in a MMF amounts to about $1 a month.
As an aside, I make every effort to PUSH payments instead of writing a paper check or giving a vendor a PULL authorization. PUSH mitigates fraud. From a convenience perspective, PUSH is great. I open my Schwab app, release MMF funds, pay the bill, and I'm done about 30 seconds later.
Regarding manual check deposits, they are available in Schwab next day for investments. A person who does not want to remember to buy MMF with cast the next day can deposit the check after 4pm EST, and place a BUY MMF. The BUY will process the next business day, the same day the check cash is available
Statistics: Posted by EricGold — Sun Apr 28, 2024 8:21 am — Replies 53 — Views 5402