Brokers provide interest on your sitting cash in what's called a sweep account. The problem is that the interest is fairly low, from 0.5-4%, depending on the broker and amount in the account. One trick is to simply ask your broker to raise the number. Sometimes, in the name of customer service, they'll do it to keep you happy. Additionally, many brokers have money market accounts or savings accounts available. If you are bolder, you could use a low fee index or ETF to stash the cash. Sure, you'll pay taxes on it when you pull it out but it's better than nothing, or worse, nothing plus inflation.
Questions: Where are these brokers investing the sitting cash? Is that how discount brokers make most of their money, on the float?
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