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| Sweep Account |
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A bank account that, at the close of each business day, automatically transfers amounts that exceed (or fall short of) a certain level into a higher interest earning investment option. Commonly, the excess cash is swept into money market funds.
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In a sweep program, a bank's computers analyze customer use of checkable deposits and "sweep" 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.
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