1Eligible account types include: Cash Management Account® (CMA® account), CMA® Account for Trusts, CMA SubAccount®, Working Capital Management Account® (WCMA® account), WCMA SubAccount, Endowment Management Account™ (EMA®), EMA II, Health Savings Account and Medical Savings Account, Retail and Business International Cash Management Account® (ICMA)(availability is based on country of residence). Please speak to your financial advisor about eligibility for certain Retirement Cash Management Accounts (RCMA®) and RCMA SubAccounts. These accounts are securities accounts with Merrill Lynch, Pierce, Fenner & Smith Incorporated. The accounts provide access to services and products offered by licensed U.S. banks, including U.S. FDIC-insured deposits that are held at Merrill Affiliated Banks. Some products and services may not be available in all jurisdictions or to all clients.
The Merrill Lynch Bank Deposit Program
Liquidity is an important consideration when structuring an overall portfolio. Through a Merrill relationship, you have access to a range of solutions designed to help balance short-term cash needs with a long-term investment strategy. With a powerful combination of yield, security and convenience features, the Merrill Lynch Bank Deposit Program can be an important tool for managing cash within a brokerage account.
A bank deposit solution for an investment portfolio
Offered through eligible Merrill brokerage accounts,1 the Merrill Lynch Bank Deposit Program provides access to a bank deposit account solution for short-term cash management. It offers the opportunity to earn a return on uninvested cash placed on deposit with two participating banks: Bank of America, N.A., and/or Bank of America California, N.A. (Merrill Affiliated Banks).
With Federal Deposit Insurance Corporation (FDIC) protection and the convenience of an automatic cash sweep feature, the Merrill Lynch Bank Deposit Program can help maximize the safety of cash balances while providing the liquidity that may be needed to pursue financial goals.
The Merrill Lynch Bank Deposit Program may be an appropriate solution if you are seeking:
- A convenient cash management solution with an automatic cash sweep feature
- The potential to earn interest income
- The liquidity of a traditional bank account
- To help maximize FDIC protection
- Ready access to deposits to take advantage of market opportunities
Interest rates for the Merrill Lynch Bank Deposit Program are tiered based on the value of the eligible accounts. In general, accounts assigned to higher asset tiers will earn higher interest rates on their bank deposit account balances.
| Tier | Value of eligible assets |
|---|---|
| Tier 1 | <$250,000 |
| Tier 2 | $250,000 to <$1M |
| Tier 3 | $1M to <$10M |
| Tier 4 | ≥ $10M |
The interest rate and annual percentage yield (APY) on bank deposits are variable and may change at the discretion of the Merrill Affiliated Banks at any time without notice or limit. Rates are available via the Deposit Account & Money Fund Rates link accessible from the bottom of each page on mymerrill.com.
Security with FDIC insurance
Participation in the Merrill Lynch Bank Deposit Program can help maximize available FDIC insurance coverage. By diversifying deposits across a range of institutions, deposits may be eligible for higher FDIC insurance coverage than is available through a single institution. Deposits in the Merrill Lynch Bank Deposit Program are insured by the FDIC up to $250,000 per depositor, per ownership category, per bank. Because there are two participating banks in the program (Bank of America, N.A., and/or Bank of America California, N.A.), deposits may be covered by FDIC insurance as follows:
- Up to $500,000 for an individual account
- Up to $500,000 for a business account
- Up to $1,000,000 for a two-party joint account
With the Merrill Lynch Bank Deposit Program, you can take advantage of an automatic cash sweep feature and daily liquidity. When cash is needed for various transactions, such as the purchase of securities, available funds on deposit are automatically used to satisfy those needs.
Contact a Merrill advisor for more information about how the Merrill Lynch Bank Deposit Program can work for you.
Conflicts of interest
There are conflicts of interest relating to the Merrill Lynch Bank Deposit Program. If a client holds cash balances in their account, both the Merrill Affiliated Banks and Merrill benefit financially when the cash is “swept” to and held in deposit with them under our cash sweep program. The Merrill Affiliated Banks benefit from their use of the deposits, and Merrill receives compensation from the Merrill Affiliated Banks for its services relating to the cash sweep program.
The participating Merrill Affiliated Banks use bank deposits to fund current and new lending, investment and other business activities. This is a conflict of interest because, like other depository institutions, their profitability is determined in large part by the difference between the interest paid and other costs incurred by them on bank deposits and the interest or other income earned on their loans, investments and other assets, which may be funded in part by bank deposits. The deposits provide a stable source of funding, and borrowing costs incurred to fund their business activities have been reduced by the use of deposits from Merrill clients.
In addition, the Merrill Affiliated Banks determine the interest rate paid to depositors in the cash sweep program. The deposits will bear a rate of interest that has been established for, and in light of the features of, the Merrill Lynch Bank Deposit Program. Generally, this rate will likely be lower than (1) the interest rates available on non-sweep deposit accounts with Merrill Affiliated Banks and other banking institutions and (2) yields on cash alternatives, such as money market funds. The features of these non-sweep deposit accounts and cash alternatives are different from bank deposit accounts affiliated with the cash sweep program.
Merrill receives compensation from the Merrill Affiliated Banks of up to $100 per year for each account that sweeps to the Merrill Lynch Bank Deposit Program, a portion of which is paid to financial advisors. This compensation is subject to change from time to time, and Merrill may waive all or part of it.
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