Connect with the author: korrynn.loesch@curinos.com
Cash sweeps balances continued to rebound in 2025 even as average yields remained well below that of competing products. Year-over-year growth totaled 7%, mirroring the performance in 2024. What was driving it?
Clearly, seasonality caused many clients to increase their balances in Q4 in anticipation of quarterly taxes and annual fees related to their brokerage accounts. But ’24-’25 performance is distinctly different than what we saw in ’22-’23, and it’s more about where clients chose to hold their cash throughout the year.
The extensive runoff of cash sweeps balances in the rising-rate environment was driven by cash-sorting. Wealth clients moved idle cash from sweeps accounts with lagging yields to high-yield savings accounts, money market mutual funds and exception-priced deposits in wealth savings/MMS accounts. Cash sweeps balances declined by 28% over the two-year period of rising rates and then flat rates that remained high.
But as Fed Funds rates started to decline in 2024 and continued to fall in 2025, higher-yielding cash-like products (high-yield savings, money market mutual funds and even wealth deposits) had higher betas and therefore experienced significant reductions in yield. Cash sweeps betas, meanwhile, were significantly lower, which created rate convergence and reduced outflows that resulted in cumulative growth of 14% over the past two years (see chart). This increase in cash utilization is welcome relief for brokerage firms that rely on sweeps for significant revenue and margin.
Sweeps Growth vs. Client Rates | Dec ‘21 – Dec ‘25
Source(s): Curinos Standard Rate Data, S&P Global SNL | Sweep rates based on posted rate for $100,000 in cash, excludes products introduced after Dec ‘23
