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Cash interest rate at Charles Schwab

Your expert
Adam N.
Fact checked by
Updated
Feb 2024
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Does Charles Schwab pay interest on uninvested cash as of February 2024?

If you have uninvested cash lying around on your brokerage account, you should make it work for you in a low-risk way instead of letting it lose value. Many brokers now offer meaningful interest on your idle cash.

Good news! Charles Schwab pays interest on your USD uninvested cash. Its interest rates are below average compared to other brokers.

Earn money on uninvested cash (AI-generated image)
My key points regarding cash interest at Charles Schwab
Adam
Adam Nasli
Financial Wizard | Trading • Safety • Market Analysis

I have personal experience with dozens of global brokers and have taken a closer look at which pay interest on cash, and under what conditions. Here are my key insights regarding earning interest on cash at Charles Schwab:

  • Charles Schwab offers up to 0.5% interest on USD uninvested funds.
  • This interest rate offering is below average compared to what other brokers pay on USD.
  • Be aware that special conditions may apply, such as a minimum required balance.
  • Check the best brokers for cash interest to find brokers that offer the most attractive rates.
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Earn up to 0.5% on USD at Charles Schwab

Earning interest on uninvested cash in a brokerage account is a useful, low-risk way to preserve the value of your money. However, there can be significant differences among brokers when it comes to interest: some don't pay anything, while some brokers pay higher rates than banks.

Charles Schwab pays interest on uninvested cash: you can earn up to 0.5% on USD.

What are the benefits of getting interest on uninvested cash?

  • Earn additional money without active investing, preserving its value against inflation.
  • Keep cash easily accessible while generating returns.
  • By leaving idle cash on the account, you can save on potential withdrawal or conversion fees.
  • Offers a low-risk, hassle-free option compared to market investments.
  • Affords flexibility, providing time to plan investments without losing potential earnings.

While earning interest on your uninvested cash is great, there are a few things to keep in mind:

  • The advertised interest rate is annual, so you'll need to divide this by the number of months or days to understand your actual earnings. Interest is typically accumulated daily but paid monthly.
  • You may need to pay tax on the interest you earn. The tax typically depends on your country of residency, and is not deducted by the broker. It is your responsibility to report and pay the taxes.
  • In most cases, there's little reason to worry about safety when keeping cash in your broker account. In the US, for example, cash holdings are insured up to $250,000.
  • Be on the lookout for any special conditions the broker may set in order to pay interest, such as a minimum balance requirement.
  • If you maintain a broker account solely for the purpose of earning interest on your cash, choose a broker that doesn't charge an inactivity fee or regular account fee.
Cash yield at Charles Schwab

Interest rates at Charles Schwab are below average

In order to have a verdict on how Charles Schwab stacks up against other brokers on the market with regard to interest rates on USD uninvested cash, we looked at several factors:

  • What the interest rates are: naturally, the higher the better.
  • Are there any conditions? We took two cases: the maximum interest you can earn, and the interest you can earn on $10,000. Brokers that offer interest already on low amounts, without any conditions, got a better rating.

Based on these factors, we found that Charles Schwab's offering for interest on USD uninvested cash is below average.

You can find the detailed data in the table below for USD, as well as whether there is an inactivity fee.

Charles Schwab cash yield compared with main competitors
USD maximum cash yield
0.5% 0.2% 2.7%
USD cash yield in a $10k scenario
0.5% 0.0% 2.7%
Inactivity fee
No
No
No

Data updated on February 28, 2024

You can also check out cash interest rates and conditions at other brokers:

'Conditions may apply': check the fine print for receiving interest

The interest you can earn on uninvested cash in your brokerage account may vary depending on different factors, so you should always check the exact conditions that apply.

The most frequent factors that usually influence the rate you will get are account type, minimum balance requirements, and account size, for example.

Below you can find all the information we have on cash interest at Charles Schwab, straight from our Charles Schwab review:

Interest earned on uninvested cash

As of the time of the review, Charles Schwab provides the following interest rates on uninvested cash:

  • 0.5% for USD

Find the best brokers for earning interest on your uninvested cash

Does your broker not offer any interest on idle cash? Or do you want to check whether its interest rates are competitive with the rest of the market?

Check our toplist of the best brokers for cash interest to find brokers with the most attractive rates.

Check out this short video for a behind-the-scenes peek into how our experts personally test and evaluate brokers.

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Further reading

Author of this article

Adam Nasli

Financial Wizard | Trading • Safety • Market Analysis

I bring extensive financial expertise as one of BrokerChooser's earliest team members. Personally, I tested nearly all 100+ brokers on our site, opening real-money accounts, executing trades, assessing customer services, and providing firsthand assessment. My professional background includes roles in the banking sector and a degree from Central European University, where I teach finance. My passions lies in in-depth research of the financial industry, building trading algorithms, and managing long-term investments.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

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