When the stock market is in bull mode, it's easy to pay scant attention to how much the excess cash in your brokerage account is earning. Perhaps not until the market goes south and cash becomes a safe haven will you care that your stingy yield is being annihilated by inflation.

Bankrate's exclusive Cash Sweeps Study shows that billions of dollars in retail brokerage accounts are earning paltry sums for customers. Of the 20 institutions surveyed, only four automatically sweep customers' excess cash into higher-yielding money market mutual funds. The result is that brokerages are able to borrow billions from customers while paying little more than 0.5 percent interest.

Excess cash in a brokerage account may be generated by the addition of dividends or interest, or the sale of equities or bonds. Traditionally, this money will be reinvested, but while it's waiting to be redeployed, it should be earning as much interest as possible.

Instead, most brokerages in our survey sweep the money into FDIC-insured deposit accounts at banks that sometimes are subsidiaries or affiliates of the brokerage. The average annual yield paid on amounts up to $100,000 is 0.56 percent in these cash accounts, according to Bankrate's survey. Compare that with the average 2.78 percent paid by the four institutions -- Banc of America, Muriel Siebert, ShareBuilder and Vanguard -- that automatically sweep your excess cash into a money market mutual fund even if your balance is as low as $1.

"Our products and services are designed to provide our clients with the best possible value, which includes convenience and service, as well as superior features and functionality through our online banking and investment services," says Neal Wolfson, Bank of America product executive.

That 0.56 percent average paid by 16 institutions is padded by two brokerages, A.G. Edwards and TradeKing, which sweep money into cash accounts but pay significantly better interest than the others. TradeKing, at the time of the survey, paid a 1.12 percent annual percentage yield, or APY, on balances up to $49,999. A.G. Edwards paid a respectable 2.02 percent on similar balances.

Peter Crane, president and publisher of Money Fund Intelligence, says that it will be interesting to see how well A.G. Edwards' rates hold up as it has merged with Wachovia, which pays 0.45 percent on balances up to $99,999. (A.G. Edwards is now Wachovia Securities but, as of this survey, separate account information was still being maintained.)

Unfortunately, it's common to see even lower yields than Wachovia's. E-Trade pays 0.05 percent on balances up to $4,999. TD Ameritrade pays that amount on balances up to $24,999. Wells Fargo's WellsTrade pays 0.2 percent on balances up to $99,999.

Customer must take action
To be sure, there is no obligation on the part of brokerages to pay any interest on cash that's sitting in an account waiting for the customer's directive on how it should be used. Somewhere in the account-opening paperwork you received, or that was made available to you online, are the details of how excess cash will be handled. Generally, it's up to the customer to protect his or her own interests in this regard.