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Schwab ?

Recently bought 6 month T-bill on Monday 8/19, with settlement on 8/22. Why was the account already debited ? Because the money was already there ?

Comments

  • taxable account?
  • Taxable it is.
  • edited August 20
    Did they debit the sweep account which pays next to nothing interest?

    Otherwise, you have to remember to sell your MM fund to match the settlement. If you forget or fail to do that, you will be charged margin interest.

    I stopped buying Treasuries at Schwab to avoid Schwab shenanigans, including when they deposit money into my account when the Treasuries mature. Fidelity is H&S above Schwab on this and Schwab agents admit to it.

    Sorry, Grin and bear is all I can say !

  • Maybe T+1 now applies to T-bills & notes. You're right about sweep account sucking.
  • Money for Treasury auctions is blocked off within days of the auction even when the settlement is later. So, after Monday T-Bill auction, expect the money to be blocked off by Monday or Tuesday, when the settlement may be on Thursday. Only exception may be at Fido when it sees another maturing Treasury on Thursday, and then it settles the net.

    Similar with CDs. Money is gone soon after the order, but the CD issue date may be several days later.
  • Thanks @yogibearbull If the money isn't there, I take it that I have until settlement to
    pony up the cash?
    Have a good day, Derf
  • @Derf, I am not sure how it's for the brokerage cash accounts.

    In my margin a/c, I see that if there is cash in the core, it is taken within days after the Treasury Auction day but well before the settlement day; but if the cash isn't there, then margin capacity is reduced, although margin won't be charged.

    You can try waiting until the settlement day in cash account, but you may get emails or phone calls to send money ASAP. At worst, you may get a trade warning or your order may be canceled. The settlement process is just different for Treasuries and CDs vs stocks/ETFs/CEFs.

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