Podcast
Questions and Answers
What action does VBS take if there are insufficient funds in your deposit account?
What action does VBS take if there are insufficient funds in your deposit account?
VBS will withdraw funds from other available sources as described in your Brokerage Agreement.
How is the yield on your Sweep Deposits determined and maintained across different Program Banks?
How is the yield on your Sweep Deposits determined and maintained across different Program Banks?
The yield on Sweep Deposits is passed along at the same rate regardless of which Program Bank holds the assets.
What is the annual percentage yield (APY) and how is it communicated to account holders?
What is the annual percentage yield (APY) and how is it communicated to account holders?
The APY earned on Sweep Deposits is stated on your VBS Account statement under Current APY Information.
What restriction is imposed on withdrawals or transfers from a NOW account or MMDA by the Program Banks?
What restriction is imposed on withdrawals or transfers from a NOW account or MMDA by the Program Banks?
What happens to access of Sweep Deposits if a Program Bank fails?
What happens to access of Sweep Deposits if a Program Bank fails?
When does the yield begin to accrue on your Sweep Deposits?
When does the yield begin to accrue on your Sweep Deposits?
What is indicated on your Account statement regarding Sweep Deposits and their yield?
What is indicated on your Account statement regarding Sweep Deposits and their yield?
How does VBS manage the transfer of Eligible Balances and withdrawals from your MMDA?
How does VBS manage the transfer of Eligible Balances and withdrawals from your MMDA?
What is the current maximum deposit insurance amount (SMDIA) provided by the FDIC for each insurable category?
What is the current maximum deposit insurance amount (SMDIA) provided by the FDIC for each insurable category?
How does VBS determine the eligibility of your Eligible Deposit Balances for FDIC insurance?
How does VBS determine the eligibility of your Eligible Deposit Balances for FDIC insurance?
What types of accounts have special FDIC insurance rules mentioned in the content?
What types of accounts have special FDIC insurance rules mentioned in the content?
What happens to eligible deposits once they are transferred to a Program Bank through the Bank Sweep product?
What happens to eligible deposits once they are transferred to a Program Bank through the Bank Sweep product?
What factors determine the fee that VBS receives from Program Banks?
What factors determine the fee that VBS receives from Program Banks?
What condition is placed on deposits made through the Bank Sweep regarding additional accounts held at the same bank?
What condition is placed on deposits made through the Bank Sweep regarding additional accounts held at the same bank?
How does the Bank Sweep program affect the yield clients receive on their deposits?
How does the Bank Sweep program affect the yield clients receive on their deposits?
Do the FDIC coverage rules monitor or take responsibility for funds outside the Bank Sweep?
Do the FDIC coverage rules monitor or take responsibility for funds outside the Bank Sweep?
In what instance could your Sweep Deposits be impacted by the existing deposits held at a Program Bank?
In what instance could your Sweep Deposits be impacted by the existing deposits held at a Program Bank?
What might prompt VBS to suspend participation in the Bank Sweep program?
What might prompt VBS to suspend participation in the Bank Sweep program?
What is the effect of having multiple accounts with the same category of account ownership on FDIC insurance?
What is the effect of having multiple accounts with the same category of account ownership on FDIC insurance?
What happens to Eligible Balances during a suspension of the Bank Sweep?
What happens to Eligible Balances during a suspension of the Bank Sweep?
Are balances held through an alternative Sweep Program FDIC-insured?
Are balances held through an alternative Sweep Program FDIC-insured?
How will clients be notified if their participation in the Bank Sweep is suspended?
How will clients be notified if their participation in the Bank Sweep is suspended?
What interest can clients expect to earn on balances during a suspension of the Bank Sweep?
What interest can clients expect to earn on balances during a suspension of the Bank Sweep?
How does the return on Eligible Balances under the Bank Sweep compare to the alternative Sweep Program offered by VBS?
How does the return on Eligible Balances under the Bank Sweep compare to the alternative Sweep Program offered by VBS?
What responsibility do you have regarding monitoring your FDIC insurance limits with multiple accounts?
What responsibility do you have regarding monitoring your FDIC insurance limits with multiple accounts?
What should you consider doing if you have other funds deposited at a Program Bank aside from your Bank Sweep?
What should you consider doing if you have other funds deposited at a Program Bank aside from your Bank Sweep?
What is the primary function of the Vanguard Cash Plus Account?
What is the primary function of the Vanguard Cash Plus Account?
Which sweep option is available for the Cash Plus Account?
Which sweep option is available for the Cash Plus Account?
What are you required to do in case you believe your consumer credentials have been compromised?
What are you required to do in case you believe your consumer credentials have been compromised?
Are the disclosures regarding FDIC insurance comprehensive and complete?
Are the disclosures regarding FDIC insurance comprehensive and complete?
What limitations exist in the Cash Plus Account compared to the Vanguard Brokerage Account?
What limitations exist in the Cash Plus Account compared to the Vanguard Brokerage Account?
What kind of account is the Vanguard Cash Plus Account considered?
What kind of account is the Vanguard Cash Plus Account considered?
Under what circumstances might information about Your Cash Plus Account be disclosed to third parties?
Under what circumstances might information about Your Cash Plus Account be disclosed to third parties?
What happens to fund balances subject to a seven-day hold regarding disclosure?
What happens to fund balances subject to a seven-day hold regarding disclosure?
What should be done if an ACH transaction exceeds the maximum daily transaction amount?
What should be done if an ACH transaction exceeds the maximum daily transaction amount?
What types of circumstances can prevent an ACH transaction from occurring despite precautions?
What types of circumstances can prevent an ACH transaction from occurring despite precautions?
What should a customer do if they wish to allow the disclosure of their account information?
What should a customer do if they wish to allow the disclosure of their account information?
Study Notes
Bank Sweep Program Overview
- VBS withdraws funds from available sources if there are insufficient balances in your deposit account.
- Eligible balances earn daily yield on Sweep Deposits at specified Program Banks.
Yield and APY Details
- Yield paid on Sweep Deposits is consistent across different Program Banks, subject to future changes.
- Annual Percentage Yield (APY) for Sweep Deposits is disclosed on your VBS account statement.
- Yield accrual starts the day deposits are made and continues until withdrawn.
Withdrawals and Accessibility
- Program Banks may require seven days' notice for withdrawals from certain account types, like NOW accounts or MMDAs.
- DDA accounts are exempt from this restriction.
- Access to Sweep Deposits may be limited if a Program Bank fails.
Maintenance of Eligible Balances
- VBS automatically transfers funds to maintain eligible balances necessary for withdrawals.
- Sweep accounts will accrue interest until the withdrawal day.
Conflicts of Interest
- VBS receives fees from Program Banks for Sweep Deposits, influencing the yield offered to clients.
- Clients typically receive a lower yield due to these fees, compared to clients depositing directly at Program Banks.
- During program suspension, VBS may move balances to an alternate Sweep Program or maintain them as Free Credit Balances.
FDIC Insurance Coverage
- FDIC insurance covers Sweep Deposits up to the standard maximum of $250,000 per insurable account category.
- Aggregate deposits at a Program Bank impact FDIC insurance eligibility across all accounts with the same ownership type.
- Special FDIC rules apply to trust accounts and certain account types.
Cash Plus Account Features
- Vanguard Cash Plus Account is a separate brokerage account designed to manage cash assets.
- It offers limited features compared to the primary Vanguard Brokerage Account.
- The Bank Sweep is the only Sweep option available within the Cash Plus Account.
Error Resolution and Liability
- Immediate reporting of unauthorized use of account credentials is crucial for liability reduction.
- Information about the account or transactions can be disclosed for transaction completion or third-party verification.
Miscellaneous
- ACH transactions may be limited by certain restrictions, including maximum daily amounts.
- Documentation will outline preauthorized credits, debits, and error resolution notices.
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Description
This quiz covers the management of Sweep Deposits within your brokerage account, particularly focusing on how yields are earned and funds are withdrawn. Review the guidelines outlined in your Brokerage Agreement to better understand how these processes work.
