Chapter 11: Cash management in practice
Mara is 36, a pharmacist with $310,000 spread across five accounts, and until this spring she could not have told you what her cash earned. Then one line on a brokerage statement stopped her: the sweep account holding her idle cash was paying 0.01%. Not one percent. One hundredth of one percent, which on her $21,000 balance works out to $2.10 a year. She went looking through her other accounts and found the rest of her cash parked in three more sweeps, each paying a different rate, none of which she had ever chosen. Four parking spots, four rates, zero decisions.
This is the plumbing chapter. Chapter 1 chose the shelves, Chapter 4 built the ladder, and Chapter 8 sorted funds from rungs by purpose. None of that helps if the dollars never reach the shelf, and by default many of them never do. The goal of this chapter is simple to say and worth real money to execute: every cash dollar gets an address and a job.
What a sweep account actually does
When cash arrives in a brokerage account, from a deposit, a dividend, or a maturing bill, it cannot lie on the floor. The broker automatically moves it into a sweep account: a holding spot that keeps the money spendable on a moment's notice while it waits for your instructions. Sweeps exist so you can place an order tomorrow without wiring money first. As a lobby between transactions, they are genuinely useful.
The catch is the rate. Some brokers sweep idle cash into accounts paying close to market rates. Many pay far less, and a few pay almost nothing, because the gap between what your cash could earn and what the sweep pays you is revenue to the broker. This is Chapter 7's seller's-pitch test applied to your own statement: the product being sold is convenience, and the price is printed in very small type as an interest rate. Nobody calls to point it out, because the arrangement works fine for the party who would have to make the call.
The usual upgrade sits inside the same login. A government money market fund holds short-term government paper, aims to keep its share price steady at $1 (Chapter 12 tells the story of the one big fund that famously failed to), and can be bought or sold any business day. The average 7-day yield across the largest money funds is about 3.45% as of June 11, 2026, per Crane. Money funds as a group held $7.87 trillion as of the ICI's June 10, 2026 weekly count, so parking cash this way is hardly exotic. The work involved is one buy order. On a $20,000 balance, the difference between a 0.01% sweep and a fund paying about 3.45% (June 11, 2026) is about $688 a year for that single order.
The decision rule writes itself: a sweep is the right address for cash that is between jobs for days. For cash that sits for months, the sweep is the wrong address, and the right one is one order away.
Mara's consolidation, dollar by dollar
Mara's cash added up to $58,000 across the four sweeps. Here is what it was earning the day she looked, with each rate as her brokers disclosed it in June 2026.
| Account | Cash balance | Sweep rate | Interest per year |
|---|---|---|---|
| Broker A, taxable account | $21,000 | 0.01% | $2.10 |
| Broker A, rollover IRA | $15,000 | 0.25% | $37.50 |
| Broker B, Roth IRA | $8,000 | 0.45% | $36.00 |
| Broker C, old taxable account | $14,000 | 1.80% | $252.00 |
| Total | $58,000 | 0.56% blended | $327.60 |
She made three moves over one Saturday afternoon plus a week of waiting on transfers. First, she consolidated: Broker C's account moved to Broker A, making Broker A her hub, one login for everything. Second, she gave the open-ended cash a real address: $40,000, her emergency fund plus cash she holds while deciding, went into a government money market fund at the hub. Third, she gave the dated cash dates: $15,000 earmarked for next April's tax bill and a kitchen renovation deposit went into 13-week T-bill rungs at the June 8, 2026 auction investment rate of 3.73%, built exactly the way Chapter 4 taught. She left $3,000 in the sweep on purpose, as a true lobby for settling trades and catching dividends.
| Address | Job | Balance | Rate (as of) | Interest per year |
|---|---|---|---|---|
| Government money market fund | emergency fund and undecided cash | $40,000 | about 3.45% (Crane, June 11, 2026) | $1,380.00 |
| 13-week T-bill rungs | April taxes and the kitchen deposit | $15,000 | 3.73% (June 8, 2026 auction) | $559.50 |
| Hub sweep account | lobby for trades and dividends | $3,000 | 0.01% | $0.30 |
| Total | $58,000 | 3.34% blended | $1,939.80 |
Same $58,000, same reachability within a few days, and the interest went from $327.60 to $1,939.80 a year: a raise of $1,612.20 for an afternoon of clicking. The before and after are worth seeing side by side.
How much FDIC coverage do you actually have?
More than most people think, if you use the rules, and less than some people assume, if they pile everything in one place. FDIC insurance covers $250,000 per depositor, per insured bank, per ownership category. Those are three separate multipliers. Two banks double the coverage for the same person. And within one bank, money held in different ownership categories, such as single accounts, joint accounts, and certain retirement accounts like IRAs, is insured separately, $250,000 each. One saver with a single account and an IRA at Bank A, and the same pair at Bank B, has $1,000,000 of coverage across four buckets without any exotic moves. A couple can go further at a single bank: two single accounts, a joint account insured at $250,000 per co-owner, and two IRAs reach $1,500,000. The FDIC's own FAQ walks every category.
The arithmetic cuts both ways. A business or a saver with $900,000 in one checking account at one bank has $250,000 covered and $650,000 exposed, a position Chapter 12 will show you the consequences of in a single March week.
SIPC, and what it does not do
Brokerage accounts carry a different shield. SIPC protects up to $500,000 per customer, including a $250,000 sublimit for cash, and it protects exactly one thing: custody. If your broker fails and assets go missing in the wreckage, SIPC works to restore them. It never covers market losses; a bond fund that falls 13% is not an insurance event, it is Tuesday.
The cash sublimit is the detail that matters for this chapter. Uninvested cash sitting in a brokerage sweep counts against the $250,000 cash sublimit. Money market fund shares are securities, so they sit under the larger $500,000 umbrella instead, and Treasury bills are securities you own directly regardless of what happens to the broker holding them. Some brokers also sweep cash to partner banks, which puts FDIC coverage behind it; the sweep disclosure tells you which kind you have, and reading it takes two minutes. For Mara, the after picture is comfortably inside every line: $40,000 of fund shares, $15,000 of bills, $3,000 of cash.
T+1 and the transfer calendar
Since May 2024, US securities settle in one business day, a standard the SEC calls T+1: sell a money fund, an ETF, or a bill on Monday and the cash is yours Tuesday. Maturing bills need no sale at all; the face value lands as cash on the maturity date, on schedule. The slow link in the chain is usually the bank transfer, which commonly takes a business day or three depending on the institutions, so the practical rule is to count backward: if the kitchen contractor wants a deposit Friday, the rung should mature Tuesday, and the transfer should start the same day. Chapter 3's auction calendar matters here too, since new bills settle on set dates, and autoroll decisions have cutoffs. None of this is hard. All of it rewards a calendar over a memory.
The annual cash audit
Mara's discovery was not bad luck; it was the natural result of four years without anyone looking. The fix is a standing appointment, fifteen minutes once a year, which Chapter 13 folds into the full safe-money hour.
- List every account that can hold cash, including every sweep, and write each rate next to it with today's date.
- Compare each rate against the current board: top online savings accounts near 4.0–4.25% APY (aggregator data, June 2026), big money funds averaging about 3.45% (Crane, June 11, 2026), the 13-week bill at 3.73% (June 8, 2026 auction). Replace these with the live numbers when you read this.
- Check FDIC totals per bank, per ownership category, and SIPC's $250,000 cash sublimit at each broker.
- Confirm every dollar has a job: buffer, emergency fund, dated need, or allocation. A dollar without a job drifts into a sweep.
- Confirm autoroll settings still match your plan, and that maturing rungs land before the bills they pay.
- Move anything that failed the comparison. One order, one afternoon.
Every cash dollar gets an address and a job. Sweeps are lobbies, never bedrooms: fine for a night between trades, expensive as a place to sleep for a year.
The whole project took Mara one Saturday afternoon and a week of waiting on transfers. The hardest part, she says, was the phone call to close the account at Broker C, where a polite retention specialist offered her a rate that had apparently existed all along. Her note from the end of the audit, taped inside a cabinet door next to the pharmacy schedule: "The 0.01% wasn't a mistake. It was a bet that I'd never look." She looks once a year now, in March, the same week she pulls her tax documents. Last check took eleven minutes, because every dollar was already where the plan said it should be.
Key takeaways
- A sweep account is a lobby for cash between jobs. Some pay near-market rates and some pay 0.01%; the gap is the broker's revenue, and the disclosure is the only place it is printed.
- Mara's $58,000 went from $327.60 a year across four sweeps to $1,939.80 in one hub: a government money fund at about 3.45% (Crane, June 11, 2026), T-bill rungs at 3.73% (June 8, 2026), and a $3,000 lobby kept on purpose.
- FDIC coverage is $250,000 per depositor, per insured bank, per ownership category, and the three multipliers stack. SIPC covers $500,000 of custody at a broker, including $250,000 for cash, and never covers market losses.
- Settlement is T+1 since May 2024, so the slow step is usually the bank transfer. Count backward from the date the money is needed.
- Run the cash audit once a year: rates against the current board, coverage against the limits, and a job for every dollar.
Sources: FDIC deposit insurance FAQ · FDIC national rates · SIPC: what SIPC protects · Investor.gov: the T+1 settlement cycle · ICI money market fund data · TreasuryDirect auction results