Client Interest Program
Earning interest on your funds awaiting investment
Earn a competitive rate of interest on your funds awaiting investment
You can realize the benefits of safety and convenient investment transactions by using our Securities Investor Protection Corporation (SIPC) protected Client Interest Program (CIP) as a short-term depository for your cash, dividends and interest. The automatic sweep feature allows you to purchase and sell investments with little effort:
- If you purchase an investment, the exact amount of the transaction is transferred from your CIP on settlement date and you are free from the responsibility of otherwise delivering the funds.
- If you sell an investment, the proceeds are automatically deposited into your CIP and you begin earning interest on the funds immediately until they are reinvested.
CIP account benefits include:
- No minimum balance to maintain CIP. However, average balances below $500 do not earn interest, with the exception of the Elite Investment Account.
- Protection. Each CIP account is fully insured in event of the firm’s liquidation. SIPC provides coverage for the first $100,000, with the balance covered by a policy purchased from Customer Asset Protection Company, a licensed Vermont specialty insurer with a financial strength rating of A+ by Standard and Poor’s.
- Security. Funds held for CIP are generally used to fund margin loans to clients or placed in short-term U.S. Treasuries, Treasury- backed repurchase agreements, or in qualifying cash escrow and/or money market deposit accounts with top-tier U.S. banks.
- Full earning power. Interest is computed on 100% of your average monthly credit balance. However, personal checks deposited in your investment account are not automatically transferred to your CIP until the third business day after deposit.
- Check writing and VISA® debit card capabilities when your CIP is used in conjunction with the Raymond James Elite Investment Account.
- No early withdrawal penalties.
Most commonly asked questions:
Q. Is a CIP account like a bank savings or money market account?
A. No. While you have daily access to funds by requesting checks and wires (other options are available through the Elite Investment Account), CIP is intended to be a short-term alternative for cash awaiting investment.
Q. How do I open an account with CIP?
A. Our New Account form offers you the option of setting up CIP with your investment account. If you are already a client, simply notify your financial advisor that you would like to sign an agreement to expand your account to include our CIP benefits.
Q. Do I need to fund my CIP account with cash when I open it?
A. No cash deposit is necessary. As long as your investment account has been properly coded, your CIP will be waiting for you when you need it.
Q. What happens to the money in my CIP?
A. We segregate all funds held for the exclusive benefit of our clients in separate bank accounts, as required by the Securities and Exchange Commission. A portion of our CIP balances are commonly used to fund client margin loans. Excess funds are typically placed in short-term U.S. Treasuries, Treasury-backed repurchase agreements, or in qualifying cash escrow and/or money market deposit accounts with top-tier U.S. banks. This high degree of liquidity allows you access to the funds in your CIP account at any time during our normal office hours.
Q. How is interest calculated for CIP?
A. An interest rate competitive with those offered by money market funds is paid on average balances over $2,500. Average balances between $500 and $2,499.99 receive the standard rate minus 1.5%. With the exception of CIP held as part of Elite Investment Accounts, CIP balances below $500 do not accrue interest. The interest rate is reset on a weekly basis.
Q. How do I know exactly what interest rate I am receiving?
A. Your financial advisor can provide you with that information. In addition, the average rate for each month, as well as your average balance and the amount of interest credited to your account, will appear on your succeeding monthly statement.
