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What is an FDIC Sweep program?

An FDIC Bank Sweep Program, is an insured deposit program that allows customers who opt-in to earn interest on eligible cash balances and offers expanded FDIC insurance coverage on those cash balances*.

How does FDIC sweep work?

Through the Alpaca FDIC Bank Sweep Program, eligible uninvested cash in a customer brokerage account can be swept to one or more of the participating FDIC Sweep Program Banks, where the swept cash becomes eligible for FDIC insurance up to a total maximum of $1,000,000 (FDIC insurance coverage is limited to $250,000 at each program bank)*.

How much is insured?

Currently FDIC insurance up to a total maximum of $1,000,000 (FDIC insurance coverage is limited to $250,000 at each program bank)*.

How does a user enroll or unenroll?

Enrollment and Unenrollment can be completed in your Algodash under ‘Plans and Features’

What are the eligibility requirements?

A customer account cannot be flagged as a Pattern Day Trader (PDT).

If an account is flagged as a PDT while enrolled in the FDIC Bank Sweep Program, it will be unenrolled from the program and its sweep balance will be swept back from the program. Any accrued interest due will be paid, but no additional interest will be accrued unless the PDT flag is removed and account is re-enrolled in the program by assigning an APR Tier.

What account types are supported?

We are currently supporting Individual Taxable accounts. We expect to roll out entity account capabilities soon.

After enrolling, how long does it take for my cash to be swept into the program?

For eligible customers, settled cash balances are swept once a day. The daily cutoff is around 11:45 am ET and therefore your time to have your funds swept can either be same-day or next business day depending on timing.

After unenrolling, how long does it take for my cash to be swept out of the program?

Same-day or next business day depending on timing. The daily cutoff for unenrollment requests to process same-day is 12:00 pm ET.

How long is the beta being conducted for?

The private beta program may close at any time without prior notice. Enrollment in the beta program does not guarantee access to, or participation in, any subsequent full production version.

How frequently does interest accrue on my swept balances?

Interest accrues daily based on the day’s ending swept balance within the program. At this time the swept balance is not exposed in the Alogdash UI, but we intend to provide that in a future production release. In the meantime, you can view your balances, sweep movements, and earnings in your monthly account statement.

When is interest paid to my account?

While interest accrues daily, it is realized (credited) monthly on the last business day of the month. The realized interest stays invested within the sweep program to compound into yield unless other user actions are taken such as withdrawals, transfers, or trading activities that require cash for settlement. Realized interest for the month will be available in your monthly account statement.

How can I opt out of a specific program bank?

We do not currently support opt-out of specific program bank(s). You will have to unenroll from the entire program.

Where can a list of specific banks in the program be found?

https://alpaca.markets/deposit-bank-list

How frequently does interest accrue?

Daily

How often is interest compounded?

Monthly

When is interest available?

Last business day of the month. The accrued interest is booked to the customer account, but remains within the program to compound into yield.

Is the APR/APY fixed or variable?

The Program Rate is variable and subject to change without notice.

Is there more detailed information available?

Alpaca Securities LLC FDIC Bank Sweep Program Terms and Conditions

*Alpaca Securities customers that enroll in the FDIC Bank Sweep are potentially eligible for enhanced FDIC pass-through insurance coverage. Neither Alpaca nor Alpaca Securities are FDIC-insured. FDIC pass-through insurance coverage is subject to various conditions. The Program’s enhanced FDIC insurance coverage is limited to the aggregate number of participating program banks, multiplied by the FDIC insurance limit (i.e., $250,000). The total number of program banks is subject to change and Alpaca Securities may not utilize all program banks at all times which will affect the Program’s enhanced FDIC insurance coverage amount. In addition, if a customer has a direct banking relationship with a program bank this may affect the amount of funds that are potentially eligible for FDIC-pass through insurance coverage. There is no guarantee that customer funds will be held in such a manner as to maximize possible FDIC pass-through insurance coverage.

Neither Alpaca, nor any of its affiliates or subsidiaries is a bank.

Alpaca Securities offers a cash management program pursuant to the FDIC Bank Sweep. Customer funds are treated differently and are subject to separate regulatory regimes depending on whether customer funds are held in their brokerage account or within the FDIC Bank Sweep. Specifically, Alpaca Securities is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per deposit against the failure of an FDIC member bank. Customer funds held in brokerage accounts are SIPC insured, but are not eligible for FDIC insurance coverage. Funds maintained in the FDIC Bank Sweep are intended to be eligible for pass-through FDIC insurance coverage, but are not subject to SIPC coverage. FDIC insurance coverage does not protect against the failure of Alpaca, Alpaca Securities, or any of its or their affiliates and/or malfeasance by any Alpaca or Alpaca Securities employee. Program banks that participate in the FDIC Bank Sweep are not members of SIPC and therefore funds held in the Program are not SIPC protected. Please see alpaca.markets/disclosures for important additional disclosures regarding Alpaca Securities brokerage offering as well as FDIC Bank Sweep terms and conditions.

Disclosures

Brokerage services are provided by Alpaca Securities, member FINRA / SIPC, a wholly-owned subsidiary of AlpacaDB, Inc.

Technology and services are offered by AlpacaDB, Inc.

Brokerage services are provided to customers who can write automated investment code and self-direct their own investments. Alpaca brokerage services are only provided to customers who agree to electronically sign agreements and agree to receive messages, confirmations, and statements electronically. Is Alpaca right for me?

This is not an offer, solicitation of an offer, or advice to buy or sell securities or cryptocurrencies, or open a brokerage account or cryptocurrency account in any jurisdiction where Alpaca Securities or Alpaca Crypto respectively, are not registered or licensed, as applicable.

The Paper Trading API is offered by AlpacaDB, Inc. and does not require real money or permit a user to transact in real securities in the market. Providing use of the Paper Trading API is not an offer or solicitation to buy or sell securities, securities derivative or futures products of any kind, or any type of trading or investment advice, recommendation or strategy, given or in any manner endorsed by AlpacaDB, Inc. or any AlpacaDB, Inc. affiliate and the information made available through the Paper Trading API is not an offer or solicitation of any kind in any jurisdiction where AlpacaDB, Inc. or any AlpacaDB, Inc. affiliate (collectively, "Alpaca") is not authorized to do business.

You should know that the use or granting of any third party access to your account information or place transactions in your account at your direction is solely at your risk. Alpaca does not warrant against loss of use or any direct, indirect or consequential damages or losses to you caused by your assent, expressed or implied, to a third party accessing your account or information, including access provided through any other third party apps, systems, or sites.

Market prices, data and other information available through Alpaca are not warranted as to completeness or accuracy and are subject to change without notice.System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors.A more complete description of the impact these factors may have can be found in our risks of automated trading systems section.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

There are risks unique to automated trading algorithms that you should know about and plan for. You should setup a method or system of continuous monitoring or alerting to let you know if there is a mechanical failure, such as connectivity issues, power loss, a computer crash, or system quirk. You should also monitor for instances where your automated trading system experiences anomalies that could result in errant, missing, or duplicated orders. A more complete description of these and other risks can be found in our FAQ section.

Conditional orders may have increased risk as a result of their reliance on trigger processing, market data, and other internal and external systems. Such orders are not sent to the market until specified conditions are met. During that time, issues such as system outages with downstream technologies or third parties may occur. Conditional orders triggering near the market close may fail to execute that day. Furthermore, our executing partner may impose controls on conditional orders to limit erroneous trades triggering downstream orders. Alpaca Securities may not always be made aware of such changes to external controls immediately, which may lead to some conditional orders not being executed. As such, it is important to monitor conditional orders for reasonability. Conditional orders are “Not Held” orders whose execution instructions are on a best efforts basis upon being triggered. Furthermore, conditional orders may be subject to the increased risks of stop orders and market orders outlined above. Given the increased potential risk of using conditional orders, the client agrees that Alpaca Securities cannot be held responsible for losses, damages, or missed opportunity costs associated with market data problems, systems issues, and user error, among other factors. By using conditional orders the client understands and accepts the risks outlined above. Alpaca Securities encourages leveraging the use of Paper accounts to become more comfortable with the intricacies associated with these orders.

ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks. Some ETFs may involve international risk, currency risk, commodity risk, and interest rate risk. Trading prices may not reflect the net asset value of the underlying securities.

All accounts are opened as limited purpose margin accounts. You should know that margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Alpaca's Margin Disclosure Statement and Margin Agreement. These disclosures contain information on Alpaca Securities's lending policies, interest charges, and the risks associated with margin accounts.

Commission-Free trading means that there are no commission charges for Alpaca Securities self-directed individual brokerage accounts that trade U.S. listed securities through an API. Relevant regulatory fees may apply.

Commission free trading is available for Alpaca's retail customers. Alpaca reserves the right to charge additional fees if it is determined that orders flow is non-retail in nature.

Cryptocurrency is highly speculative in nature, involves a high degree of risks, such as volatile market price swings, market manipulation, flash crashes, and cybersecurity risks. Cryptocurrency is not regulated or is lightly regulated in most countries. Cryptocurrency trading can lead to large, immediate and permanent loss of financial value. You should have appropriate knowledge and experience before engaging in cryptocurrency trading. For additional information please click here.

Cryptocurrency services are made available by Alpaca Crypto, a FinCEN registered money services business (NMLS # 2160858), and a wholly-owned subsidiary of AlpacaDB, Inc. Alpaca Crypto is not a member of SIPC or FINRA. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC. Please see the Disclosure Library for more information.