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DoLoop,

You wrote, There are some strange entries in mine. Fortunately, the amounts in question are very small (less than a dollar) but they don't make any sense.

Since Scottrade always paid interest on the cash balances on the last day of the month, I checked my accounts at TDA to see if anything had showed up. There wasn't anything on 2/28 but there was any entry dated 3/1. Using just one of the accounts as an example, it showed an entry of 60 cents (didn't actually say what is was for). But then it also showed an entry of -31 cents (didn't say what that was for either).


I can't explain the negative number ... unless you have something margined. But TD Ameritrade does a kind of FDIC sweep program. Your cash balances are farmed out to different insured banks. I suspect they do this through some kind of bidding process, so the bank holding today's new deposits can be different from yesterday's.

Quite a few banks can be involved in paying on your cash balance in any given account. TD Ameritrade credits your account whenever each bank pays out interest. My last statement from TD Ameritrade on my taxable account (before I moved to Merrill Edge) shows 5 separate interest deposits in that month. And I only received 14 cents in total.

BTW, TD Ameritrade makes money off of your cash deposits too. It's well reported in the financial press that TD Ameritrade's cash management system is one of their biggest profit centers. The more of your cash they hold, the more they make. While they don't make a lot as a percentage, they are basically splitting the earnings from the banks with you and it hardly costs them anything to do it. Of course most brokers earn money off your cash balances too - they just don't usually pay out like this.

- Joel
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