How can I earn more from cash sitting in brokerage account?

— -- Q: I'm getting next to nothing on the cash sitting in my brokerage account. Where should I stash it?

A: There's a dirty little secret in the brokerage business. You may be giving your brokerage firm a free loan.

If you take a closer look at your brokerage statements, you might be shocked to see how little you're being paid on cash stored there. Even if your money is invested in a "money market" fund, you might be surprised to see that the interest rate on it is well below 0.5%, if not even lower. The same goes for "sweep" accounts, where the rates being paid are likely pretty disappointing.

Monitoring the interest rate being paid on uninvested cash in your brokerage account is critical now, since many investors are sitting out of the stock market. If you have a big wad of cash in your account, just letting it sit there as you wait for a better time to get into stocks could be costing you some major cash.

Granted, interest rates are hovering at all-time lows so it's not like you're missing out on a free-money bonanza. Still, if you have a decent amount of cash sitting in a brokerage account, you might be surprised how much a little change in the interest rate can make.

Consider an investor with $20,000 in a brokerage account that's just sitting there. And let's say that $20,000 is in a sweep account that yields no interest. By keeping money sitting there, the investor is easily giving up more than $200 a year in interest.

Here's why. It's not difficult to find online banks, including Discover Savings and Capital One, paying roughly 1% a year in interest. That's 1% interest plus FDIC insurance and the ability to quickly and electronically within a few days move the money into a checking account or brokerage account at any time.

And at just 1%, $20,000 would generate $200 in interest in just one year. That's free money that investors are missing out on and allowing their brokerages to collect.

Some brokerages do provide competitive interest rates on uninvested cash, but not many. Be sure to examine the fine print of your statement or in the various "fees and interest rates" sections of the brokerage's Web site to find out exactly what you're being paid. And if it's not much, move your money.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at: twitter.com/mattkrantz