Morgan Stanley’s Bank Deposit Program is an investment vehicle used to hold cash balances while awaiting reinvestment.

Idle funds held in account(s) at Morgan Stanley are automatically deposited by MSSB (Morgan Stanley Smith barney LLC) into FDIC-insured accounts complete with interest.

The accounts these funds funnel into are held by either Morgan Stanley Bank and/or Morgan Stanley Private Bank. Both are member FDIC and funds are insured up to the applicable limits for individual and joint accounts.

The APYs paid on these accounts are tiered based on balance amount.

The tiers are as follows:

• $0 – $99,999.99
• $100k – $249,999.99
• $250k – $499,999.99
• $500k – $999,999.99
• $1m – $1,999,999.99
• $2m and above

Currently, all tiers earn the same APY, however as interest rates rise you can expect this to change with higher balances earning more attractive yields.

The Bank Deposit Program is the default sweep option unless the account is ineligible to participate for the Bank Deposit Program. Morgan Stanley provides a couple alternate funds in which free credit balances can be swept into, if you’re ineligible for the Bank Deposit Program.

To view Morgan Stanley’s current APYs for their Bank Deposit Program and alternate funds, continue reading our review below.

Morgan Stanley Bank Deposit Program APYs

The yields below are accurate as of the time of this publishing. To give these yields some context, the current national average for a money market account and an interest checking account sit at 0.07% APY and 0.03% APY, respectively, according to recent FDIC data.

If the account is ineligible for Morgan Stanley’s Bank Deposit Program outlined above, then balances in the account will be swept into one of the Morgan Stanley’s alternate funds.

Also note that balances above $20 million will be swept to the MGPXX fund. More info on that fund below.

Morgan Stanley Domestic Money Market Sweep Fund and Yield

If your account is ineligible for the Bank Deposit Program, Morgan Stanley’s Domestic Money Market Sweep Fund may still be available to you. The yields shown below are not traditional annual percentage yields, but rather 7 day yields.

We should also note that funds held in these accounts are not insured by the FDIC.

Unlike traditional money market accounts held at banks or credit unions, it is possible to lose money with the funds above.

Per Morgan Stanley’s fine print (found here):

“Depending upon the type of money market fund in which you invest, a fee may be imposed upon sale of your shares or the Fund may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.“

Morgan Stanley Offshore Money Market Sweep Fund + Yield

Similar to the Domestic Money Market Sweep Fund Morgan Stanley offers, the Offshore Money Market Fund Sweep Fund also quotes their yields in 7 day terms. This product is not available in the US or to US citizens.

Unlike the fund symbols associated with Morgan Stanley’s domestic money market options, the Cayman Sweep Fund is an internal product that can not be looked up publicly.

Final Thoughts

While earning interest on temporarily idle cash balances is a nice benefit to have, the yields currently provided at Morgan Stanley are extremely low even when benchmarked against a historically low national average.

Although their money market funds cannot be compared to traditional money market accounts and online savings accounts offered by banks and credit unions in a true, apples-to-apples kind of way, it’s worth mentioning some of the top yields for those traditional accounts are still touching 0.50% APY.