A sweep account is a type of bank or brokerage account that automatically transfers (or "sweeps") excess cash into a different account or investment to maximize returns or manage liquidity.
How sweep accounts work:
- At the end of each business day, any cash that exceeds a predetermined balance is automatically swept into higher yielding investment or separate account.
- The funds remain liquid and can be accessed when needed.
- Sweep accounts help you earn interest on idle cash or optimize cash flow.
Benefits of sweep accounts:
- Maximizes returns: your idle cash earn interest.
- Automatic transfers: funds exceeding a set threshold are automatically moved to a higher - yielding account.
- Simplified financial management: Sweep accounts can help businesses and individuals streamline their cash flow and financial management.
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Concentration of Funds: Sweep accounts can help businesses consolidate their cash balances in a single location, making it easier to track and manage.
Types of sweep accounts offered at Panacea:
At Panacea we offer ICS (Insured Cash Sweep) accounts and ZBA (Zero Balance Account). Click on each one of the hyperlinks to learn more.
The main difference is that a Zero Balance Account (ZBA) maintains a zero balance by automatically transferring funds to and from a master account, while an Insured Cash Sweep (ICS) account allows you to deposit large sums of money while maintaining FDIC insurance coverage for amounts exceeding the standard $250,000 limit per depositor.