The “Lazy Sweep” is Dead.
For the last 18 months, cash management was easy. You put your uninvested capital into a Vanguard or Fidelity money market fund (like VMFXX or SPAXX), and you collected a risk-free 5.3%. You didn’t have to think.
As of November 2025, that party is over.
Following the Federal Reserve’s October cut to a range of 3.75%–4.00%, the yield on standard brokerage sweep accounts has collapsed.
- Vanguard (VMFXX): Down to ~3.89%
- Fidelity (SPAXX): Down to ~3.60%
- 3-Month T-Bills: Down to ~3.87%
With inflation sticking at 3.0%, your real yield (after inflation) in a standard sweep account is now a measly 0.6% to 0.8%. That is what we call “Cash Drag.” To maintain a 4-5% yield in Q4, you must move your money out of the brokerage ecosystem and into the “Neobank War.”
The Spec Sheet: The “Yield Arbitrage”
While the big brokers track the Fed perfectly, smaller institutions are keeping rates artificially high (5.00%+) to acquire customers. They are effectively subsidizing your yield from their marketing budget. We should let them.
Specifications
| Vehicle | November 2025 Yield (APY) | Liquidity | The Catch |
|---|---|---|---|
| Varo Bank | 5.00% | Instant | Capped at $5,000 balance. |
| AdelFi (New Member) | 5.00% | Instant | For new accounts only. |
| First Internet Bank | 4.42% | 6 Withdrawals/Mo | Requires $1M+ for top tier (“Jumbo”). |
| Standard Brokerage (Fidelity) | ~3.60% | Instant | Rate drops immediately as Fed cuts. |
| 3-Month T-Bill | ~3.87% | Locked (3 Mo) | Yield has inverted; longer duration pays less. |
The Strategy: Bifurcate Your Cash
You can no longer treat your cash as one lump sum. To optimize ROI, you must split it based on volume.
1. The “Petty Cash” Stack (<$20k) If you keep $10k-$20k liquid for monthly expenses, move it to Varo or AdelFi.
- The Play: Open a Varo account to capture the 5.00% on the first $5k. It sounds small, but 5% vs 3.6% is a 40% increase in efficiency. It takes 10 minutes to set up.
2. The “Dry Powder” Stack (>$100k) If you are holding six figures for a business acquisition or a real estate down payment, the “Neobanks” won’t work (due to caps).
- The Play: Look at First Internet Bank’s “Jumbo” Money Market (4.42%).
- The Alternative: If you don’t need the cash until Summer 2026, lock in a 1-Year CD now. Rates are around 4.00%-4.10%. This sounds low, but if the Fed cuts again in December and March, you will look like a genius for locking in 4% when the market is paying 3%.
The Apex Verdict
The era of “Set It and Forget It” yield is gone. The gap between the “Lazy Money” (3.6%) and the “Smart Money” (4.4% – 5.0%) is now over 100 basis points. On a $250,000 cash position, that is $2,500 a year – enough to buy a new MacBook Pro every single year, just for clicking a few buttons.
The Assets (Pros)
Real Yield: 5.00% beats inflation (3.0%) by a healthy 2% margin.
FDIC Insurance: Unlike some “Crypto Yield” products, these are insured banks.
Liquidity: Money Markets allow access (unlike T-Bills which are locked).
The Liabilities (Cons)
Fragmentation: You will have accounts at 2-3 different banks instead of just one.
Rate Risk: Even these banks will eventually cut rates if the Fed keeps cutting in 2026.
Caps: The highest rates (5%) have low balance limits ($5k-$10k).
The Buy Case: Move your cash to First Internet Bank (Large Balance) or Varo (Small Balance) this week.
The Pass Case: Stay in Vanguard (VMFXX) only if your cash balance is negligible (<$5k) and the friction of opening a new account isn’t worth the $50/year difference.
Final Thought: Cash is an employee. If it’s sleeping on the job at 3.6%, fire it and hire a 5.0% replacement.
Disclaimer: The views expressed in this article are for informational purposes only and do not constitute financial, legal, or professional advice. Please consult a qualified professional before making investment or purchase decisions.
Graham Sterling is an investment strategist focused on asset optimization and credit markets. With a background in private wealth management, he writes for the modern professional looking to leverage capital for maximum ROI. His work deconstructs complex financial tools from premium credit card ecosystems to alternative asset classes into actionable strategies.
