Sweep account


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Sweep account

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

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.

sweep account

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.

References in periodicals archive ?
According to BankBazaar, any individual who runs a small business and has a current account need not take an overdraft on the fixed deposit held by them, setting up a sweep account will be more beneficial for them.
If a fund has liquidity issues, cash could be unavailable to settle trades in a sweep account.
banking services requested by the county trustee~s office include a checking account, sweep account and the option of the employee payroll account.
The debtor maintained an operating account and a corresponding investment sweep account as its only bank accounts.
There is also a sweep account functionality and ACH origination.
With the repeal of Regulation Q, we were interested in eliminating the need for a third-party vendor sweep account, benefiting both the bank and the customer by consolidating two accounts and reconciliations into one account with interest.
Cash Management Access Accounts are essentially a brokerage account that holds investment assets and redirects un-invested money into a sweep account.
Also set up a sweep account applying the extra cash on hand against lines of credit, reducing interest expense.
8 (e), officially known as the Final Rule on Processing of Deposit Accounts in the Event of an Insured Depository Institution Failure and popularly known as the Failed Bank Rule, sets out the criteria for all sweep account options.
Sweep account investment options are available based on a company's needs.
The sweep account activities push-out exception is codified in Exchange Act Section 3(a)(4)(B)(v).
For cash that you might need soon, the solution is likely a sweep account.