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The Sweep Account

What is it all about?
The Sweep Account is designed for the large deposit customers, generally commercial. It provides automatic cash management of funds by utilizing repurchase agreements (or REPOS). REPOS are short term debt obligations of the bank. REPOS are not FDIC insured but are collateralized by U.S. securities, held by a correspondent bank, which are fully guaranteed by the United States or one of its agencies.

With no FDIC maximum insurance guidelines, the customer is able to maintain secured balances in excess of $100,000.

How does it work...and who does the work?
The Sweep Account is two accounts in one. The first is the Non-Interest Account, which is used to make deposits and write checks. The normal monthly service charges for checking accounts will apply to this account. Any collected balance in excess of a predetermined amount (target balance) is automatically swept into the second account (sweep account). The sweep account is the interest bearing account.

When the funds are needed in the regular checking account to cover checks which have been written, funds will be automatically transferred from the sweep account to return the balance in the checking account to the target balance. Funds will be transferred between the accounts in $10,000 increments.

How does it earn...when is interest paid?
Interest is paid on sweep accounts according to various daily balance levels (or blocks). Sweep account rates are market related and may change at any time. Each depositor will receive a daily confirmation by fax, mail, or e-mail on the securities used for securing their Sweep Account.