investment sweep , or sweep investment account , bank account is a secondary That offers additional investment options on idle funds in a primary cash or checking account . [1]

How it Works

At the end of each business day, the bank automatically scans and determines what funds in the person’s account is idle. It then transfers the funds to preselected interest-earning accounts. At the beginning of the business day, the investment plus interest increased to the primary account. Due to the timing of these transactions, there is never a conflict of demand for the funds. [2]

Drawbacks

Since it is not a deposit, it is not federally insured . Also, like all investments, it may lose value. [3]

Customers

Sweep investment accounts for small business owners.

References

  1. Jump up^ “Citibank” . Citigroup. January 1, 2006 . Retrieved 2007-03-08 .
  2. Jump up^ “Cash Management Services” . Pacific Western Bank. January 1, 2007 . Retrieved 2007-03-08 .
  3. Jump up^ “Sweep Investment Account” . Guaranty Bank. January 1, 2007 . Retrieved 2007-03-08 .