The Sweep Banks generally set the rates on a weekly basis, but may set the rates more or less frequently. Morgan Stanley and the Sweep Banks reserve the right to change the methodology used to determine the interest rates in their sole discretion and without prior notice to you. Interest rates on the Deposit Accounts are variable. You may contact us to exclude your deposits from being swept to any of the Sweep Banks, or the Sweep Fund. If there are not enough funds in your Sweep Fund to satisfy debits or charges in your Account, Morgan Stanley, as your agent, will then make the necessary withdrawals from your DDA account at a Sweep Bank as described above. Notwithstanding the above, for accounts with a Sweep Fund, all withdrawals necessary to satisfy debits from your Account will be made by Morgan Stanley, as your agent, first from your Sweep Fund. Withdrawals from your Deposit Accounts will be made on a “last in, first out” basis, which means that funds will be withdrawn first from your Sweep Fund and then from the Sweep Banks in the reverse order from which the funds were deposited. Please also see the SIPC Coverage section below. A prospectus that sets forth the investment risks and other important information about the Sweep Fund will be mailed to you upon the first deposit into the Sweep Fund. The Deposit Maximum and the Sweep Fund are subject to change with prior notice to you from Morgan Stanley. If your Account is eligible, your Sweep Fund available for your Account is the Morgan Stanley Institutional Liquidity Funds Government Securities Portfolio (symbol MGPXX). Once the deposited funds reach the Deposit Maximum, any additional free credit balances will be swept, without limit, to the applicable money market mutual fund (“Sweep Fund”) for eligible accounts. If your funds exceed the Deposit Limit at both the Primary and Secondary Sweep Banks, on any given day, your deposits that exceed the Deposit Limit at the Secondary Sweep Bank will sweep to the Primary Sweep Bank, up to the Deposit Maximum, even if the amounts in the Deposit Accounts at the Primary Sweep Bank exceed the Maximum Applicable Insurance Limit. Morgan Stanley will notify you with a written notice at least 30 calendar days prior to any material change to the Program such as changes to the Deposit Maximum or the Sweep Fund.ĭeposits will first be made to your Deposit Accounts at the Primary Sweep Bank up to the Deposit Limit, then to the other Sweep Bank (“Secondary Sweep Bank”) up to the Deposit Limit. Your monthly account statement will reflect your balance in each Sweep Bank. If a change is made, we may transfer funds between the Sweep Banks in order to reallocate your deposits. Morgan Stanley may change which of your Sweep Banks is Primary versus Secondary Sweep Bank. Either MSBNA or MSPBNA will be your Primary Sweep Bank, and you will receive notice of the then-current order of the Sweep Bank upon the first deposit into the Program. The Primary Sweep Bank is the Sweep Bank where your deposits will first be made. Deposit Limits are set slightly below the FDIC insurance thresholds to allow for accrued interest on the Deposit Accounts. The Deposit Limit will continue to be $490,000 for Accounts held jointly by two or more persons or entities. Any other deposits include positions in the Morgan Stanley savings programs, GlobalCurrency, CDs, checking accounts and savings accounts at MSPBNA. The Deposit Limit will be computed on a daily basis to be the lesser of $245,000 or the difference of $245,000 and the total of any other deposits held in the same FDIC account ownership category at the respective Sweep Bank for all accounts except jointly held accounts. Your monthly Account statement will reflect your balances in each Sweep Bank and if applicable, the Sweep Fund. The Deposit Accounts at each Sweep Bank consist of a demand deposit (“DDA”) account. (“MSBNA”) and Morgan Stanley Private Bank, National Association (“MSPBNA” and, together with MSBNA, the “Sweep Banks”), and (ii) for applicable cash balances in the highest interest rate tier, a Sweep Fund (as defined below). Through the Bank Deposit Program (“BDP” or the “Program”), free credit balances are automatically deposited, or “swept” into (i) interest-bearing FDIC-insured deposit accounts (“Deposit Accounts”) established for you by, and in the name of, Morgan Stanley Smith Barney LLC as agent and custodian, at one or more sweep banks: Morgan Stanley Bank, N.A.
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