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What’s a money sweep account or sweep account?
A money sweep account mechanically transfers uninvested money — usually from a financial institution or brokerage account — to higher-yielding accounts or investments, corresponding to banks, cash market funds or short-term Treasury securities. These choices are typically low danger and hold money simply accessible.
Uninvested money would possibly embrace account deposits, dividends or curiosity from investments, or proceeds from an funding sale.
The primary function of a money sweep account, additionally referred to as a sweep account, is to earn curiosity on cash that may in any other case sit idle.
Many sweep accounts additionally supply banking options corresponding to digital funds and check-writing providers. The pursuits charges on sweep accounts can differ.
Chances are you’ll be requested to decide on a money sweep program when opening an funding account, or you could be mechanically enrolled in a single.
Some applications are free, whereas others might cost charges corresponding to account administration or upkeep charges. Some money sweep accounts even have minimal account steadiness necessities.
Each entities have money protection limits of $250,000 per buyer.
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