If you are into brokerage and investment, you might have come across the word sweep account. Let me explain what is a sweep account.
Get home loans at the lowest interest rate only at NoBroker and avoid hefty paper work! Sweep account meaning:A sweep account is a type of brokerage account that directly transfers the amount that exceeds or falls short of a certain amount into a higher interest-earning investment option at the end of every day. Generally, the excess amount of money is transferred into a money market fund. This is what is sweep transfer means.
I will try to make you understand the concept in a simpler manner.
Sweep accounts are helpful as it helps to minimise the cash drag by capitalising on the immediate availability of higher-interest accounts.
A sweep account service is not free all the time. You may need to pay an amount to your broker that might make the sweep less attractive on a regular basis.
A sweep account ensures a regular flow of money rather than an amount of cash sitting in a low-interest bank account. Some banks also offer an auto sweep feature where the sweep account is linked to a non-sweep account and a transfer occurs when the thresholds are crossed. I hope you know what is a sweep account now.
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Authors Of The Question
What is a sweep account?
Siddharth
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2 Year
2022-10-11T10:01:43+00:00 2022-10-14T12:53:48+00:00Comment
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