Sweep Account

Loading the player...

DEFINITION of 'Sweep Account'

A bank account that automatically transfers amounts that exceed (or fall short of) a certain level into a higher interest earning investment option at the close of each business day. Commonly, the excess cash is swept into money market funds.

BREAKING DOWN 'Sweep Account'

In a sweep program, a bank's computers analyze customer use of checkable deposits and "sweeps" funds into money market deposit accounts.

This is done to provide the customer with the greatest amount of interest with the minimum amount of personal intervention. That said, sweep accounts were originally devised to get around a government regulation that limited banks from offering interest on commercial checking accounts. Now, some brokerage accounts have similar features that enable investors to gain some additional return for unused cash.

RELATED TERMS
  1. Money Market Account

    An interest-bearing account that typically pays a higher interest ...
  2. Current Account, Savings Account ...

    CASA accounts are most prominent in middle and southeast Asia, ...
  3. Checking Account

    A transactional deposit account held at a financial institution ...
  4. Asset Management

    1. The management of a client's investments by a financial services ...
  5. Bank Card

    Any card issued against a depositary account, such as an ATM ...
  6. Account

    1. An arrangement by which an organization accepts a customer's ...
Related Articles
  1. Investing Basics

    How Does a Sweep Account Work?

    A sweep account is a banking arrangement that transfers – or sweeps – balances from one account into an investment account at the close of each day.
  2. Personal Finance

    Get A Short-Term Advantage In The Money Market

    This investment vehicle is often the perfect stop-gap measure for growing your money.
  3. Options & Futures

    Getting To Know The Money Market

    If you need liquidity and safety on a sum of money, don't forgo potential interest by keeping the funds as cash.
  4. Retirement

    The Money Market

    If your investments in the stock market are keeping you from sleeping at night, it's time to learn about the safer alternatives in the money market.
  5. Investing Basics

    Financial Markets: Capital vs. Money Markets

    Financial instruments with high liquidity and short maturities trade in money markets. Long-term assets trade in the capital markets.
  6. Term

    How Time Deposits Work

    A time deposit is an interest-bearing bank deposit that has a specific maturity date.
  7. Mutual Funds & ETFs

    2016's Most Promising Money Market Funds

    Learn information on some of the most promising money market mutual funds for investors to consider adding to their portfolio in 2016.
  8. Term

    Understanding Treasury Yield

    Treasury yield refers to the return on an investment in a U.S. government debt obligation, such as a bill, note or bond.
  9. Investing Basics

    Financial Markets: Capital Vs. Money Markets

    Two commonly used components of the financial market are money markets and capital markets. Find out the similarities and differences between them.
  10. Investing Basics

    Defining The 3 Types Of Investments

    The first step to being a successful investor is knowing what is and isn't an investment.
RELATED FAQS
  1. What types of money are included in money supply?

    There is no universal definition of the money supply; economists and central banks use different measures based on analytic ... Read Full Answer >>
  2. What are examples of popular companies in the financial services sector? (BRK.A, ...

    The financial services sector includes banks, insurance firms, credit and payment processing companies, and real estate companies. ... Read Full Answer >>
  3. Are mutual funds considered cash equivalents?

    Though all mutual funds are considered liquid assets, only certain funds are considered cash equivalents. What Is a Cash ... Read Full Answer >>
  4. Why is my 401(k) not FDIC-Insured?

    401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit ... Read Full Answer >>
  5. What are some examples of money market funds?

    Money market mutual funds are designed to offer savers low-risk, liquid and short-term investments. They are normally offered ... Read Full Answer >>
  6. For what types of accounts are demand deposits available?

    There are essentially three types of accounts available as demand deposits: checking accounts, savings accounts and money ... Read Full Answer >>
Hot Definitions
  1. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  2. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  3. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  4. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
  5. Godfather Offer

    An irrefutable takeover offer made to a target company by an acquiring company. Typically, the acquisition price's premium ...
Trading Center