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What is brokerage cash and how can I use it?

Brokerage cash is the uninvested cash in your brokerage account, and some brokers let you earn interest on your money as you wait to invest.

If you just opened a brokerage account, you may be wondering what the section in your account titled “brokerage cash” means. Brokerage cash, account value, buying power, it’s easy to be confused by the different components of your account.

Let’s look deeper at brokerage cash and find out what exactly you can do with this money in your account.

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What is brokerage cash?

Brokerage cash refers to the total amount of uninvested money in your brokerage account. Sometimes called “uninvested cash” or “cash to invest,” brokerage cash can include instant deposits, unsettled funds and dividend payments, among other things.

In short, brokerage cash is the difference between your portfolio value and your investments’ value.

Do brokerage accounts earn money?

Some brokerage firms allow you to earn money on your brokerage cash through cash sweep programs. Through these programs, a broker sweeps your uninvested cash from your brokerage account into an affiliated, interest-bearing savings or money market account with one or more partner banks. Interest rates vary across brokers, but as of February 2024, the best broker cash sweep rates pay around 5% annual percentage yield (APY). Compare that to the average savings account rate of 0.46%.(1)

4 ways to use your brokerage cash

There are several ways to make use of your brokerage cash, like investing it or using it to pay bills. Here are a few options:

  1. Invest in stocks, exchange-traded funds (ETFs) and other long-term assets. Buy and hold securities like stocks and ETFs, which offer the greatest potential for growth over the long term.
  2. Buy short-term bonds or CDs. Short-term fixed-income investments such as bonds and certificates of deposit (CD) are typically safer securities than stocks and ETFs, but they’re also less liquid.
  3. Leave it alone to earn interest. Let your money earn interest through your broker’s cash sweep program.
  4. Pay bills. Some brokerage firms let you pay bills by transferring money directly from your brokerage account.

Brokerage cash vs. buying power

Whereas brokerage cash refers to the uninvested cash in your account, buying power is the amount of money you can use to purchase stocks, ETFs or other securities available through your broker.

Buying power is calculated by subtracting things like pending orders, options collateral and restricted cash from your brokerage cash. The amount of your uninvested cash and buying power won’t necessarily always match.

For example, say you have $50 in your brokerage cash balance, and you place a limit order to buy one share of XYZ stock at $10. XYZ stock currently trades at $15 per share, so the limit order is pending. A limit order is an order to buy or sell a stock at a specified price. At this point, your brokerage cash will still be $50, but your buying power will be $40. The $10 difference is the reserved money for the pending order. You have $40 available to buy more securities.

Robinhood brokerage cash: An example

robinhood mockup

Compare online stock trading platforms

Compare online stock trading platforms by available assets, fees and cash sweep rates. Select Go to site to open an account or More Info to read our comprehensive review of that platform.

1 - 9 of 9
Name Product USFST Ratings Available asset types Stock trade fee Minimum deposit Cash sweep APY Signup bonus
Tastytrade
Finder Score: 4.4 / 5: ★★★★★
Tastytrade
★★★★★
Stocks, Options, ETFs, Cryptocurrency, Futures, Treasury Bills
$0
$0
N/A
Get $50-$5,000
Competitive, capped options commissions, with a reliable trading platform designed for serious traders.
SoFi Invest®
Finder Score: 4.2 / 5: ★★★★★
SoFi Invest®
★★★★★
Stocks, Options, Mutual funds, ETFs, Alternatives
$0
$0
0.02%
Get up to $1,000 in stock
Zero-commission stocks, ETFs and options, with no options per-contract fees. Plus, a no-advisory-fee robo-advisor and complimentary access to financial planners.
Robinhood
Finder Score: 4.5 / 5: ★★★★★
Robinhood
★★★★★
Stocks, Options, ETFs, Cryptocurrency
$0
$0
4.5%
Get a free stock
Trade stocks, options, ETFs and crypto without commissions and on a user-friendly platform. Plus, a 1% IRA match and no options contract fees.
OPTO
Finder Score: 3.1 / 5: ★★★★★
OPTO
★★★★★
Stocks, ETFs
$0
$0
N/A
Earn up to $300
AI-driven thematic investing, with proprietary research, fractional shares and commission-free stocks and ETFs.
eToro
Finder Score: 4 / 5: ★★★★★
EXCLUSIVE
eToro
★★★★★
Stocks, Options, ETFs, Cryptocurrency
$0
$0
4.9%
FINDER EXCLUSIVE: Get a guaranteed $15 bonus
No commission stock, ETF and options trades, with 4.9% interest on your options account balance and no options contract fees.
Public.com
Finder Score: 4.3 / 5: ★★★★★
Public.com
★★★★★
Stocks, Bonds, Options, ETFs, Cryptocurrency, Alternatives, Treasury Bills, High-yield cash account
$0
$0
4.6%
Get up to $10,000 and transfer fees covered
Build a diversified portfolio of stocks, bonds, options, ETFs, crypto and alternative assets, with a high-yield cash account and options contract rebates.
Stash
Finder Score: 3.7 / 5: ★★★★★
Stash
★★★★★
Stocks, ETFs
$0
$0
0.1%
Get $10 when you sign up and deposit $5
Automated investing, individual stock and ETF investing and banking services for as low as $3 per month.
Wealthfront
Finder Score: 4.5 / 5: ★★★★★
Wealthfront
★★★★★
Stocks, ETFs
$0
$500
5%
Get $50
Automated stock and bond ETF investing with the ability to trade individual stocks for as little as $1 apiece.
Zacks Trade
Finder Score: 3.8 / 5: ★★★★★
Zacks Trade
★★★★★
Stocks, Bonds, Mutual funds, ETFs, CDs
$0.01
$250
2.83%
Get up to $500
Trade stocks, options, ETFs, mutual funds and bonds, with powerful trading tools and low margin rates.
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Bottom line

Brokerage cash is uninvested money in your brokerage account that may come from bank transfers, dividend payments or the sale of securities. While you can use brokerage cash to invest, the best brokerage accounts pay interest on this cash through cash sweep programs or cash management accounts.

Frequently asked questions

Can I withdraw brokerage cash?

Yes, you can withdraw settled brokerage cash at any time.

What is brokerage cash services?

Brokerage cash services or programs refer to ways your brokerage firm can use your brokerage cash to your advantage. For example, some firms pay interest on your brokerage cash by sweeping it into an affiliated savings or money market account.

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Writer

Javier Simon is a freelance finance writer at Finder and a certified educator in personal finance (CEPF). He’s featured on NerdWallet, Bankrate, Yahoo Finance and Fox Business, where he’s shared his expertise on personal finance topics, such as investing, retirement planning, taxes, budgeting and savings. He has also covered breaking news, such as student loan forgiveness initiatives, the housing market and inflation’s impact on consumers’ wallets. His passion is turning complex financial concepts into actionable content that can help people improve their financial lives. Javier holds a bachelor’s degree in multimedia journalism from SUNY Plattsburgh. See full bio

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Editor, Investments

Matt Miczulski is an investments editor at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions. Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University. See full bio

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Matt has written 213 Finder guides across topics including:
  • Trading and investing
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