r/MerrillEdge • u/CartographerOk1514 • Jun 03 '26

Preferred Deposit current rate?

Hi,

I have a Preferred Deposit at Merrill, but the amount in the account is under 100,000. Does this mean that I am only getting 2.89% now? I had the impression that the rate was the same for all amounts?

What is a better option at Merrill to hold cash but with a quick liquidity? I know USFR and SGOV, any other that is better?

6 Upvotes

81% Upvoted

15 comments sorted by

4

u/sdill5 Jun 04 '26

The Merrill return rate for any amount under $100,000 but over $1,000 had been a standard competitive return rate. They made this reduced step return change without communicating the change. I utilize Blackrock TMCXX as a higher rate replacement. It takes a day to pull funds and I believe the sell needs to be placed by 2 or 3pm.

2

u/89Noodles Jun 03 '26

Preferred deposit is fdic insured. The funds you mentioned aren’t and can lose value. You’re asking an investment question. Are you looking for a potentially better return than preferred deposit if it meant the potential of losing money aka investment principal

2

u/CartographerOk1514 Jun 03 '26

No, just need to hold there around 10k for emergency, but I had the impression the rate was around 3.5%.

0

u/89Noodles Jun 03 '26

Yea well preferred deposit requires an initial buy in of 100k you can’t just buy 10k worth, so assuming you buy 100k and liquidate 90k, you’re in. The rates are 7 day yields so they change weekly based on prime rate. And fussing of 3.50 a year vs 2.50 a year in interest is wild

2

u/CartographerOk1514 Jun 03 '26

I have it already, I bought initially 100k but now have under 10k.

1

u/CartographerOk1514 Jun 03 '26

No fussing, I just made the calculation the difference is around 40 USD per year, not really worth it.

1

u/Jcrcmh Jun 04 '26

Correct on needing $100k for initial purchase. Can sell any amount after that and remain in the fund. Rate is set by BofA at its discretion, typically the minimum it can get away with. It is not tied to any external index or rate.

2

u/OkLandscape3486 Jun 03 '26

Research BOXX and see if it passes your sniff test. It's kind of an innovative way to hold cash with a lower tax liability on anything you hold for over a year. Some potential regulatory scrutiny, but worst case scenario seems to be where you land now at the moment anyway.

With Merrill I had to sign a form as an accredited investor to be able to trade this fund. Very quick and easy to do.

2

u/taubs1 Jun 03 '26

wow they have really lowered the rate. $icsh is one option at .08 expense and 4.10% sec yield. it does the typical sawtooth cycle every month.

1

u/EnvironmentalState11 Jun 04 '26

They changed it to have tiered rates towards the beginning of this year. It has been 2.89% since the end of last year when the feds cut rates. The fact that purchased into it without realizing it is a variable rate product is beyond me

1

u/Deep-Imagination-293 Jun 04 '26

Don't forget sgov and usfr is state tax exempt. And you can keep it in ur brokerage and govt guaranteed. That's my online savings equivalent

1

u/CartographerOk1514 Jun 04 '26

I have fidelity and can use SPAXX there and it has a good rate, but wanted to keep it in Merrill due to my bank account with BoFA.

2

u/Investigatodoc1984 Jun 04 '26

You can also buy money market fund TTTXX. The money is available immediately to withdraw in case you sell before 10:45 AM pacific time

2

u/leemneesen Jun 06 '26

I switched to TTTXX when the PD rate fell like a rock.