sweep account

Definition

A bank account that automatically transfers excess funds to higher-yielding investments overnight, then sweeps them back for daily operations. Like having a very diligent financial butler who never sleeps.

Example Usage

Our corporate sweep account moves idle cash into money market funds each evening, maximizing returns on our $50 million balance.

Origin

Banking terminology from the 1970s when regulations limiting interest on checking accounts created demand for automated cash management.

Fun Fact

Sweep accounts became controversial when banks were caught sweeping customer funds into proprietary investments that benefited the bank more than customers.

Source: Corporate treasury and cash management

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Index Fund

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statement

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Bond

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rollovers

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appreciation

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