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The most expensive setting in your brokerage account is the one you never chose

Written by Jacob Shasha, private investor · Updated 4 August 2026 · How we test

Commission stopped being the number that matters

Every large US broker now advertises zero commission on online stock and ETF trades. Fidelity charges nothing on online US equity and ETF trades and 0.65 dollars per options contract, and Charles Schwab publishes the same zero commission and the same 0.65 dollars per contract. When two brokers charge the same nothing, the headline number has stopped doing any work.

The revenue moved. Schwab held 453.7 billion dollars of client transactional sweep cash at the end of December 2025, and reported a net interest margin of 2.90 percent for the quarter. That is the business now, and it runs on the cash sitting in your account.

The cash sweep, and why it is the number to check

Your uninvested cash does not sit in a vault. It goes into a cash feature, sometimes called a sweep or a core position, and the broker chooses a default for you when the account opens. Each broker offers more than one, and the difference between them is larger than any commission you will ever pay.

Fidelity

The rate depends entirely on which core position your account uses. Its FDIC-Insured Deposit Sweep paid roughly 1.82 percent APY as of April 2026, while its government money market options yielded about 3.32 percent for SPAXX and 3.33 percent for FZFXX in late February 2026. Rates on the sweep are also tiered by sweep balance and by total eligible assets held, so larger clients generally receive higher rates.

Charles Schwab

Bank Sweep rates are tiered by the total cash balance swept from your brokerage account, starting with a band from zero to 24,999.99 dollars. A separate programme runs on a different basis entirely: the Schwab Intelligent Portfolios sweep paid 3.26 percent APY effective 1 July 2026, reset monthly to the previous month-end seven-day yield of the Schwab Government Money Fund.

Schwab is also unusually direct about the floor. Its Cash Features Program Disclosure Statement states that in certain circumstances the interest rate could be zero, and that there is no guarantee any one feature stays higher than another.

The other three costs

Currency conversion

Buy a share listed outside your account currency and your money is converted, with the broker taking a cut of the conversion. It rarely appears as a line item because it is built into the rate you receive, which is exactly why it goes unnoticed. It applies on the way in and again on the way out.

Margin interest

Irrelevant if you never borrow, and dominant if you do. Every broker prices margin as a published base rate plus or minus a spread that depends on how much you have borrowed. The base rate is the number brokers advertise, and it is the number least worth comparing.

Here is why. Fidelity's base margin rate is 10.575 percent and Schwab's is 10.00 percent, which makes Schwab look cheaper by more than half a point. It is not. Fidelity discounts from its base at most tiers while Schwab adds to its base at every tier, and the effective rates come out identical up to half a million dollars borrowed.

Schwab base rate 10.00 percent, last changed 12 December 2025, from Schwab's own margin rates and requirements page. Fidelity base margin rate 10.575 percent, effective since 12 December 2025, from Fidelity's own commissions and margin rates page. Both checked 4 August 2026. Schwab does not publish rates at or above $500,000 and directs clients to call. Rates change without notice.

Two things follow. The schedules are the same for almost every private investor, so margin rate is not a reason to choose between these two unless you borrow several hundred thousand dollars. Above that point the comparison stops being a comparison, because only one of them publishes a number at all.

Interactive Brokers prices margin differently again, as a benchmark rate plus a spread that varies by plan, currency and loan size, with the Pro plan starting at a lower spread than Lite. Both US rates above last changed on 12 December 2025, the same day, which is a policy rate moving rather than two brokers competing. The figure showing in your own account today is the only one that matters.

Account charges

Largely gone at the big US brokers. Fidelity and Schwab both publish zero annual fees, zero inactivity fees and zero closing fees. Outside the US this is far less consistent and worth reading rather than assuming.

If you want the arithmetic rather than the argument, the expense ratio calculator adds these broker costs to the fees inside your funds and returns one number for the whole account.

Side by side

Commission and account fee figures published by each broker. Cash rates as dated above and taken from each broker's own disclosures. Rates change without notice and are tiered, so the figure applying to your account may differ. Verified 3 August 2026. Margin schedules verified first-party 4 August 2026. Check your own account before acting.

So which one is cheapest

On the numbers that get advertised, they are identical. Both charge nothing to trade US stocks, both charge 0.65 dollars per options contract, and neither charges an annual or inactivity fee. Choosing between them on commission is choosing between two zeroes.

The cost that separates accounts sits one level down, in a setting most people never open. Someone holding cash should check which sweep they are in before comparing brokers at all. Someone buying foreign shares should look at the conversion charge, which applies in both directions on every trade. Someone borrowing should look at the margin rate and treat the rest as noise, and our breakdown of Interactive Brokers fees covers the cheapest published option there.

The one thing true for everyone: the cost you can see is rarely the cost you are paying. Neither Yahoo Finance nor Google Finance will total it for you.

If you want your own total rather than a worked example, our portfolio cost calculator adds commissions, spreads, conversion fees, cash drag, fund fees and platform charges into one annual figure and shows what they come to over a decade.

A research subscription is the same problem in reverse: a cost you choose deliberately, sitting on top of the ones you did not. Because it is a fixed annual charge against a variable portfolio, it behaves exactly like an expense ratio and gets cheaper in basis points the more you have invested. Our review of InvestingPro runs that arithmetic across five portfolio sizes, and the answer at the small end is not flattering to the product.

Frequently asked questions

Which brokerage has the lowest fees?

Commission is zero on US stocks at every major broker, so it no longer separates them. The bigger question is which cash option your account defaults into, because the same broker can pay very different rates depending on that setting. Currency conversion and margin rates matter next, and only if you are exposed to them.

Is zero commission really free?

No. Zero commission means the trade is free, not that the account is free. Brokers earn from the spread on your uninvested cash, from currency conversion, from margin lending and from order flow. Schwab held 453.7 billion dollars of client sweep cash at the end of December 2025 and reported a net interest margin of 2.90 percent for the quarter, which is where a large share of brokerage revenue now comes from.

How much does uninvested cash cost me?

It depends on the cash option your account uses rather than on the broker name. At Fidelity the FDIC-Insured Deposit Sweep paid roughly 1.82 percent APY in April 2026, while its government money market core positions SPAXX and FZFXX yielded about 3.32 and 3.33 percent in late February 2026. That gap sits inside one broker.

What is a sweep and why does it matter?

A sweep is where your uninvested cash automatically sits. Brokers offer more than one option and assign a default when you open the account. The default is usually not the highest paying option available to you, and changing it is a setting rather than an account move.

Are cash sweep rates the same for everyone?

No. Both major brokers publish tiered rates. Schwab tiers its Bank Sweep by the total cash balance swept from your account, starting with a band from zero to 24,999.99 dollars. Fidelity tiers by sweep balance and by total eligible assets held, so larger clients generally receive higher rates.

Can a broker pay nothing on cash?

Yes. Schwab's own Cash Features Program Disclosure Statement states that in certain circumstances the interest rate could be zero. Rates on all cash features vary over time and there is no guarantee that one feature stays higher than another.

How do I work out what my broker actually costs me?

Add four things: commissions across a year, any platform or account charges, currency conversion on foreign trades, and the interest you are not earning on idle cash compared with the best option available to you. The last one is the largest for most people and the one nobody calculates.