Take care of your banking with four clean sweeps.
- What is a sweep account?
- How does it work?
- What is the target balance?
- How are the funds invested?
- What are the benefits of a sweep account?
- How do you apply for a sweep account?
What is a sweep account?
Sweep accounts automatically transfer excess cash in your checking account into an investment account, so that the funds you aren’t using earn a competitive rate. Interest income is earned daily and dividends are automatically deposited into your checking account each month.
How does it work?
The bank sets a “target balance” for your account. When your balance exceeds the target balance, the excess funds are swept automatically from your business checking account into an investment account called a “Sweep Fund.” Interest is earned on the Sweep Fund balance each day at market rates and credited to the account monthly. In order to pay checks drawn on the checking account, all funds are swept back each day from the Sweep Fund to the checking account.
What is the target balance?
Your target balance is set at an amount which estimates the balance necessary to eliminate monthly activity charges on the checking account. Although it does not earn interest, the target balance uses an earnings credit to avoid service charges. Your target balance is computed based on estimated account activity and may change from time to time due to a change in account activity or a change in the earnings credit rate.
How are the funds invested?
South Central Bank is now offering a Sweep Account Program through SEI Investments, one of the world’s leading providers of sweep accounts. SEI manages over $288 billion in assets and has the exclusive endorsement of the American Bankers Association and 15 State Banking Associations.
The funds in your Sweep Account will be invested in a daily Sweep Fund called the Treasury Fund. The Treasury Fund is a mutual fund investing exclusively in U.S. Treasury bills and notes.
South Central Bank’s SweepAccount.com provides an integrated approach to commercial banking with remote deposit capture and sweep accounts for small business corporations, partnerships and entrepreneurs, medium-sized corporations, local branches of large corporations, organizations, associations and other not-for-profit groups.
What are the benefits of a Sweep Account?
- Safety, liquidity and yield.
- Access to professional money managers.
- Diversification.
- Funds seek to maintain a stable net asset value of $1/Share.
- Flexibility to earn income while maintaining access to your operating funds.
- Earns competitive mutual fund yields.
- Easy-to-read monthly statements showing all fund activity and income earned.
How do you apply for a sweep account?
Ask a personal banker for more information or e-mail rribordy@banksouthcentral.com or call Bob Ribordy at (312) 491-7118. When applying for a sweep account, you will be asked to sign an agreement authorizing South Central Bank to transfer funds between your checking account and the Sweep Fund and to pay interest on the Sweep Fund balances.
