Sweep Account

Sweep account

Account providing that a bank invest all the excess available funds at the close of each business day for the firm.

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Asset Management Account

An account at a bank or other financial institution that allows the account holder to place money for both banking and investment services. When money is placed into the account, it is automatically placed into a money market account, which carries a higher interest rate than normal checking or savings accounts. The account holder can then direct the money to various banking and investment services. Asset management accounts were allowed after the passage of the Gramm-Leach-Bliley Act, which allowed financial institutions to offer both banking and investment services for the first time since at least the Great Depression.

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sweep account

See asset management account.

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Sweep account. A brokerage firm or bank may automatically transfer -- or sweep -- a client's uninvested or surplus funds into a designated account.

For instance, at the end of each business day, a bank might sweep a business client's surplus cash from a checking account into a high-yield money market or savings account, where the money earns interest overnight. The next morning, the bank would make these funds again available to the customer.

Individuals are more likely to have sweep arrangements with their brokerage firm to handle investment earnings.