The Janney FDIC Insured Sweep Program puts your cash to work at a competitive market interest rate through a multi-bank allocation process and provides Federal Deposit Insurance Corporation (FDIC) protection.
The Janney FDIC Insured Sweep Program offers:
- FDIC insurance coverage potential of up to $2,500,000 for individual accounts; $5,000,000 for joint accounts; $2,500,000 for retirement accounts; and $2,500,000 for corporate accounts
- Competitive interest rates
As a Janney client, your eligible accounts are automatically enrolled in the Janney Insured Sweep Program upon account opening, unless you instruct us otherwise. You may direct your Financial Advisor to deposit your cash in other eligible sweep options, which may include money market funds. Please note: money market funds are securities and, therefore, not eligible for FDIC insurance.
In the Janney FDIC Insured Sweep Program, cash in your Janney account is “swept into” an FDIC insurance interest-bearing account at one or more participating banks (each a “Program Bank”).
Multiple Banks Used to Increase FDIC Coverage
FDIC insurance covers both the principal and accrued interest in a bank account, up to $250,000 per depositor, for each ownership category in any Program Bank where money is deposited in the event
that the bank fails. If you use a single bank to deposit your cash balances, you are limited to that one bank’s FDIC insurance coverage only. In Janney’s FDIC Insured Sweep Program, funds are allowed to be deposited into a number of different
banks, allowing for insurance coverage of up to $2,500,000 for an individual account; $5,000,000 for joint accounts; and $2,500,000 for retirement and corporate accounts. Your deposited cash balances will be allocated nightly to one or more banks. The
number of banks to which balances are allocated will be determined by your total balances and Program Bank capacity. For a detailed description of the coverage and limitations of FDIC insurance visit fdic.gov.
Allocation of Funds to Program Banks
Your Janney monthly client account statement will list the banks your balances were allocated to during the previous month. The list of Program Banks will differ based on account type. A complete list of
the banks utilized in the Janney FDIC Insured Sweep Program is located on our website at Janney.com/cash.
Janney will deposit available cash balances from your account(s) into each of the Program Banks, beginning with an allocation of up to $246,500 (or up to $493,000 for joint accounts) to the first bank and then to additional banks, as warranted, based on the value of the account. (See the multi-bank sweep example on next page.)
It is possible to exceed the FDIC insurance limits at a specific bank if you also hold deposits directly with the same bank or with another brokerage firm outside of the Janney FDIC Insured Sweep Program. You can avoid this by periodically reviewing the list of Program Banks. The Program Bank list is located on our public website at Janney.com/cash. You may opt out of a program bank at any time by contacting your Financial Advisor.
In this example, Janney’s client, an individual, has $650,000 of FDIC-insured balances in three separate banks.
The interest payable under the Janney FDIC Insured Sweep Program takes into consideration total assets held at Janney, not just your cash balances allocated under the program. We consider all client account balances within
a “household” (same mailing address and/or Tax ID Number), to determine your total household account balance with Janney. Your total household account balance is then used to determine your qualifying interest rate tier and the interest rate
applied to cash balances. Interest rates for the Janney FDIC Insured Sweep Program may change as frequently as daily and without prior notice.
Compenstion to Janney
Each Program Bank pays interest based on a percentage rate of the daily deposit balances for eligible accounts at that bank to Janney. This rate may differ between Program Banks and it is generally based on either the
Federal Funds effective rate or the London Interbank Offer Rate (LIBOR), plus a “spread”. Rates and overall balances can change daily. Janney retains the monies remaining after interest is paid to clients with eligible accounts in the Program
and fees paid to the Administrator.
Interest Calculation for Discretionary Advisory IRA Accounts1
The interest rate calculated on cash balances in the Janney FDIC Insured Sweep Program will differ for discretionary advisory IRA accounts. The interest rate on these
accounts is determined by the amount the program banks are willing to pay minus the fees paid to Janney and other parties. This differs from other account types in the FDIC Insured Sweep Program, where Janney determines the interest rate based on household
size and other factors, as detailed above. Janney reserves the right to withdraw the monthly account fee, or a portion thereof, in the event or to the extent that the amount received from the program banks and paid to Janney by the third-party administrator
for the month is less than Janney’s fee for the same period.
You can view current rates at any time on Janney’s website at Janney.com/cash, or you can request a copy of the current rates from your Financial Advisor.
Compensation from Discretionary Advisory IRA Accounts1
For Discretionary Advisory IRA accounts, Janney receives a level monthly fee for each account. This amount is determined based upon a fee schedule indexed to the Federal Funds Target
(FFT) Rate. Janney’s per account monthly fee is administratively managed to be no less than $0.50 and no more than $12.00. It is generally anticipated that Janney’s fees will be offset by the total amounts paid by the Program Banks. If Janney
does not receive sufficient payments each month from the Banks, we reserve the right to debit the account for the amount of any shortfall.
1Discretionary Advisory programs at Janney currently includes: Compass, Pioneer, Investor Select, Keystone, ETF Advantage, Goals-Based Portfolio Solutions, Advisers, Advisers MSP, Classic and Janney Capital Management Direct.
Monies deposited in the Janney FDIC Insured Sweep Program accounts at Program Banks are not subject to market risk and value loss but are subject to the risk of a bank’s failure. In the unlikely event a bank fails, deposits at each bank are eligible for FDIC insurance protection up to a limit of $250,000 (including principal and interest) per depositor in each insurable capacity (e.g., individual or joint). This limit includes any other deposits you may have at each bank outside of this program. You are responsible for monitoring your bank balances in this program, and the balances in any of your other bank accounts at the same bank, to determine if these, in total, exceed FDIC insurance limits. Monies held in accounts with Program Banks are not covered by the Securities Investor Protection Corporation (SIPC) insurance; however, securities held in Janney brokerage accounts are covered by SIPC insurance. For more information regarding FDIC insurance, please consult fdic.gov. For more information regarding SIPC coverage, please consult sipc.org. These Deposit Accounts are direct obligations of the Program Banks and not of Janney.