(a) Amounts refer to the total market value of client assets in eligible linked accounts, as described below. Clients in the Tier 1 (less than $250,000) asset level are ineligible to choose the CMA Tax-Exempt Fund or one of the eleven CMA State-Specific Municipal Money Funds as automatic cash sweeps.
(b) Money fund yields are shown for the 7-day period indicated and do not reflect any applicable account fees. For a current prospectus of CMA and other money funds, which contains more complete information, please call your Financial Advisor. Before investing, consider carefully the investment objectives, risks, and charges and expenses of the fund. Investments in the money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the funds.
(c) For a more complete listing of available investment alternatives, please call your Financial Advisor. The investment/deposit programs listed are not available for all account types.
(d) The ISA program is not appropriate for clients who anticipate effecting frequent third-party payments or transfers, including payments or transfers by CMA check or through the Funds Transfer Service (“FTS”). Ask for an ISA Fact Sheet for additional details.
Understanding Your Cash Sweep and Other Cash Investment Options
Uninvested cash in your Merrill Lynch central asset (CMA®, Beyond Banking®, EMA®, BIASM), retirement (IRA, SEP, SIMPLE, Roth IRA, Rollover or Basic plan account), and Education Savings, Health Savings and Medical Savings accounts may be automatically “swept” to bank deposits with FIA Card Services, N.A. (FIA) and/or Merrill Lynch Bank & Trust Co., FSB (the “Merrill Lynch Affiliated Banks”) under either the Merrill Lynch Bank Deposit Program (the “MLBD Program”) or the Retirement Asset Savings ProgramSM (the “RASPSM Program”), depending on your account type, where it earns interest. Your Merrill Lynch account statement indicates where your cash balances are currently deposited or invested and the current yield those balances are earning as of a recent date.
Depending on the total asset level of your statement-linked Merrill Lynch accounts (see Linking Accounts below), you may be eligible to choose an alternative “sweep” money market fund, such as the CMA Tax-Exempt Fund or one of eleven state-specific funds within the CMA Multi-State Municipal Series Trust1. In addition, there are investment alternatives to cash deposits with the Merrill Lynch Banks, such as the CMA Money Fund, other money market funds and other short -term money market investments, which may be made on a manual basis by speaking with your Financial Advisor (see discussion of Manual Investment Alternatives below). The information above about Recent Yields on Bank Deposits and Certain Investment Alternatives is provided so that you can review with your Financial Advisor any alternative sweep options you may have and whether you may wish to avail yourself of any Manual Investment Alternatives, either of which may, at times, pay a higher return than the interest rate paid on deposits at the Merrill Lynch Affiliated Banks. In selecting among your cash options, it is important to note that Merrill Lynch Affiliated Bank deposits provide the benefit of FDIC insurance (up to applicable limits) while money market funds and other Manual Investment Alternatives have investment risk of various degrees and are not guaranteed or insured as to principal. A Merrill Lynch financial advisor is always available to discuss your cash options as the yields on respective cash options may change, depending on market conditions, at different times throughout the year.
(e) Through December 31, 2009 Merrill Lynch will make available the Fully FDIC Insured Sweep for qualifying accounts in the MLBD Program. Clients meeting the following criteria can be enrolled, if they choose, in the MLBDP Fully FDIC Insured Sweep.
- Have or open an account that is eligible for the MLBD Program (with the exclusion of certain managed accounts);
- Have, or designate, the MLBD Program as the primary sweep option on the account.
- Have or deposit a minimum balance in the MLBD Program of $500,000 in an individual account or $1,000,000 in a joint account; and
- Have at least $1,000,000 in statement-linked assets at Merrill Lynch.
Please speak with your FA for eligible account types and for additional terms and conditions that apply.
Once enrolled in the Fully FDIC Insured Sweep, cash balances in the qualifying account will automatically sweep under the MLBD Program rules. The unlimited FDIC insurance coverage will apply only to the account enrolled in the Fully Insured FDIC Tier, not other accounts in the household. Clients will be removed from the Fully Insured FDIC Sweep if the minimum balances requirements are not maintained.
The FDIC’s Temporary Liquidity Guarantee Program (“TLGP”), pursuant to which the Fully FDIC Insured Sweep is offered, is currently expected to expire on December 31, 2009. As such, on January 1, 2010, i) standard Tiering rules for the MLBDP would apply and ii) clients will receive FDIC insurance up to the then applicable Standard Maximum Deposit Insurance Amount (SMDIA) for each ownership category, per bank. If the TLGP is extended past December 31, 2009, Merrill Lynch may extend the availability of the Fully FDIC Insured Sweep.
As required by law, the Fully FDIC Insured Sweep will have an interest rate at or below 0.50%. Please be advised that rates are subject to change at any time and at Merrill Lynch’s sole discretion.
Interest Rates and Yields
Interest rates paid on deposits held at the Merrill Lynch Affiliated Banks are determined at the discretion of the Merrill Lynch Affiliated Banks based on economic and business conditions. Interest rates are tiered based upon your relationship with Merrill Lynch and the Merrill Lynch Affiliated Banks, as determined by the total value of assets in your account or, if you link your accounts as described below, all of your eligible linked accounts. Rates may change daily. Clients with higher total eligible assets generally receive a higher yield on their bank deposits.2 An estimated annualized yield on any deposits held at the Merrill Lynch Affiliated Banks is included on your Merrill Lynch account statement. You can also access current interest rate information on Merrill Lynch OnLine® (see “Notices” on the “My Home” page), on MyMerrill by accessing the "Deposit Account & Money Fund Yields" link at the bottom of each page or by contacting your Financial Advisor.
Linking Accounts
You can link your accounts together for statement delivery purposes and to establish higher levels of eligible assets and a potentially higher interest-rate tier. For regulatory or other reasons, certain types of accounts that can be linked for statement delivery purposes cannot be linked for the purpose of determining your total eligible client assets. If you have any questions about linking your accounts or linking eligibility, please contact your Financial Advisor.
FDIC Insurance
Your deposits in the Merrill Lynch Affiliated Banks are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to applicable limits. Pursuant to the Emergency Economic Stabilization Act of 2008, the FDIC's Standard Maximum Deposit Insurance Amount ("SMDIA") has been temporarily increased from $100,000 to $250,000 per depositor, per ownership category, per bank through December 31, 2013. As a result, bank deposits held through CMA accounts and Beyond Banking accounts are insured up to $250,000 per depositor in each ownership category at each of the Merrill Lynch Affiliated Banks through December 31, 2013.3 On January 1, 2014, the SMDIA will return to $100,000 for all deposit ownership categories, except certain retirement accounts (primarily traditional and Roth IRAs), which will continue to be insured up to $250,000 per depositor, per bank.
Benefits to Merrill Lynch of Bank Deposits
Deposits held at the Merrill Lynch Affiliated Banks are financially beneficial to Merrill Lynch and its affiliates. For example, the Merrill Lynch Affiliated Banks use bank deposits to fund current and new lending, investment and other business activities. Like other depository institutions, the profitability of the Merrill Lynch Affiliated Banks is determined in large part by the difference between the interest paid and other costs incurred by them on bank deposits, and the interest or other income earned on their loans, investments and other assets. The deposits provide a stable source of funding for the Merrill Lynch Affiliated Banks, and borrowing costs incurred to fund the business activities of the Merrill Lynch Affiliated Banks have been reduced by the use of deposits from Merrill Lynch clients.
Merrill Lynch receives compensation from the Merrill Lynch Affiliated Banks of up to $65 per year for each CMA and Beyond Banking account and $30 per year for each retirement account (IRA, SEP, SIMPLE, Roth IRA, Rollover or Basic plan account), Education Savings, Health Savings and Medical Savings accounts that has uninvested cash balances automatically swept to the Merrill Lynch Affiliated Banks under the MLBD or RASP Programs. This compensation is subject to change from time to time and Merrill Lynch may waive all or part of it.
Manual Investment Alternatives
There are investment alternatives to deposits held with the Merrill Lynch Affiliated Banks. Depending on your investment objectives, liquidity needs and risk tolerance, your investment alternatives may include, but are not limited to, taxable and tax-exempt money market funds, a limited transaction deposit program (called the “Insured Savings AccountSM”), certificates of deposit and other short-term money market investments, such as U.S. Treasury bills. While deposits held at the Merrill Lynch Affiliated Banks are covered by FDIC insurance up to applicable limits, most of the available investment alternatives do not carry FDIC coverage, are subject to principal risk and are not obligations of the Merrill Lynch Affiliated Banks.
Some of these alternatives may pay a higher return than the interest rate paid on deposits at the Merrill Lynch Affiliated Banks. However, these alternatives generally require that you speak to your Financial Advisor to invest or make a deposit. The alternatives listed under “Manual Investment Alternatives” in the chart on the prior page require you to speak to your Financial Advisor to invest or make a deposit; however, they provide an automatic withdrawal or redemption feature in order to satisfy securities and cash management transactions, including check writing and Visa® card activity.
Other Information
Please refer to the MLBD and RASP Program disclosures for additional and more detailed information concerning deposits with the Merrill Lynch Affiliated Banks. You may also contact your Financial Advisor at the telephone number on your account statement, or call (800) MERRILL (637-7455).
1 Tax-exempt money funds are not available with Merrill Lynch Direct CMA accounts.
2 Interest-rate tiering does not apply to deposits from accounts enrolled in certain advisory programs, such as the Merrill Lynch Consults® and Personal Investment Advisory®(“PIA”) programs; these deposits receive the highest rate paid by the Merrill Lynch Banks under the MLBD and RASP Programs. Interest rate tiering also does not apply to bank deposits swept from Merrill Lynch Direct® accounts.
3 Only one Merrill Lynch Affiliated Bank participates in the bank deposit program for Merrill Lynch Direct CMA accounts.
Merrill Lynch, Pierce, Fenner & Smith Incorporated is a registered broker-dealer and a wholly owned subsidiary of Bank of America Corporation.
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