This FAQ applies to Flourish Cash.
Interest is accrued and compounded daily and credited to your account on a monthly basis. Interest generally begins to accrue on the business day that your funds are deposited with our Program Banks (which is typically the business day that we receive your funds), and is generally paid into your account within the first three business days of the next month. For example, if you made an initial deposit into your account on January 1, you’d receive your first interest payment in early February.
Interest is calculated using the daily balance method. Essentially, this method applies a daily periodic rate to the principal and interest that has accrued in the account each day. This means that the interest for your account is calculated every day on a 365-day year — or on a 366-day year for leap years. The Annual Percentage Yield (APY) rate reflects the effect of daily compounding over a full year – meaning that on any given day, funds accrue at a rate that is lower than the APY, but due to compounding (e.g., the fact that your accrued interest will itself earn interest), clients earn the full APY over the course of the year.
To give an example, if you started the year with a $100,000.00 balance, didn’t make any deposits or withdrawals, and earned 3.65% APY over the course of the entire year, you'd expect to earn $3,650.00 in interest after 365 days.
Calculating monthly interest based on APY
Determining monthly interest based on the APY rate can become complicated due to the need to factor in daily compounding. You can download this Excel spreadsheet to help you with the calculation.
Calculating approximate monthly interest based on APR
If you’d prefer a simpler method to obtain an estimate of interest earned in a month, you can use a method that relies on the Annual Percentage Yield (APR). APR represents the simple interest rate applied without considering compounding. To reiterate, this calculation will return a number that is slightly different than the actual interest earned in any given period, as this method does not factor in the impact of continued daily compounding. You can find the current APR for your account on your statement.
Example:
Parameters:
- APY = 3%
- APR = 2.96%
- Compounding frequency: Daily
- Balance: $100,000.00
- Period covered: one month consisting of 30 days
- Amount on deposit and rate remain constant throughout the 30 days
Step 1: Multiply your account balance by the APR.
$100,000 x 2.96% = $2,960.00
Step 2: Divide the result by 365 days to get the daily estimated accrual interest.
$2,960.00/365 = $8.1095
Step 3: Multiply by 30 days
$8.1095 × 30 = $243.29
In practice, you'd earn slightly more than $243.29 due to compounding.
A Flourish Cash account is a brokerage account offered by Flourish Financial LLC, a registered broker-dealer and FINRA member. Flourish Financial LLC is not a bank. Check the background of Flourish Financial LLC and its personnel on FINRA's BrokerCheck. The cash balance in a Flourish Cash account will be swept from the brokerage account to deposit account(s) at one or more third-party Program Banks that have agreed to accept deposits from customers of Flourish Financial LLC. The accounts at Program Banks will pay a variable rate of interest.
Flourish Cash currently has a tiered interest rate structure and currently has one tier in effect. Rate and FDIC insurance coverage details can be found in the program summary. We deposit your cash with one or more of the Program Banks, subject to any Program Bank(s) you have excluded. You will earn the highest rate offered by Flourish up to the maximum deposit amount for each tier. Each annual percentage yield (APY) displayed here is effective as of 11/08/2024 and may change at any time. Your advisor may charge fees which impact the effective rate you receive on your cash; you should speak with your advisor for more information. The Flourish Cash interest rate(s) could be lower than the rate that could be earned by opening a deposit account directly with a Program Bank.
The cash balance in a Flourish Cash account that is swept to one or more Program Banks is eligible for FDIC insurance, subject to FDIC rules, including aggregate insurance coverage limits. FDIC insurance will not be provided until funds arrive at the Program Bank. There are currently at least 24 Program Banks available to accept deposits for business Flourish Cash accounts and personal Flourish Cash accounts, and we are not obligated to allocate customer funds across more than this number of Program Banks if there is a greater number of banks in the program. Customers are generally eligible for FDIC insurance coverage of $250,000 per customer, per Program Bank, for each account ownership category. Thus, business customers are eligible for up to $6,000,000 of FDIC insurance and personal customers are eligible for (i) up to $6,000,000 of FDIC insurance for an individual account or revocable living trust account and (ii) up to $12,000,000 of FDIC insurance for a joint account with two owners or joint revocable living trust(s). The total FDIC coverage for a two-person household is calculated assuming that each household member has an individual account and that both household members share a joint account. If the number of Program Banks decreases for a customer (for instance, because a customer chooses to exclude Program Banks from receiving their deposits), the amount of FDIC insurance through Flourish Cash could be lower. Typically, all of a customer’s deposits at a Program Bank in the same ownership category (including deposits held outside Flourish Cash or held through multiple Flourish Cash accounts with the same ownership category) count toward the FDIC insurance limit for deposits at that Program Bank. Customers are responsible for monitoring whether they maintain deposits at a Program Bank outside of Flourish Cash and should consider choosing to exclude that Program Bank from receiving their deposits to avoid exceeding FDIC insurance limits. Although Flourish Cash is offered through a brokerage account and cash held in brokerage accounts often has the benefit of SIPC protection, until such time as we offer securities products, customers likely will not have the benefit of SIPC protection. SIPC protection is not available for cash held at the Program Banks. Our current Program Banks can be found here. For additional information regarding FDIC coverage, visit https://fdic.gov.