If you consistently have excess cash balances in your business checking account, you may be missing out on significant earnings potential on these cash resources. With an automated sweep account, excess cash is automatically transferred into an investment account at the end of each day. The beauty of a sweep account is that sweeps are daily and automatic - no manual intervention is required. When your checking account reaches a predetermined target balance, money is swept overnight from the checking account into an investment account. Funds are then swept back into the checking account as needed to cover presentments.
A non-deposit account is authorized by a cash management agreement between the customer and Soy Capital Bank. Under this agreement, funds are moved back and forth between a customer's checking account and the investment account via sweeps or automatic transfers. Fund balances in the investment account are used each day to purchase, on behalf of the customer, an interest in United States Government Bonds, which serve as collateral.
Interest is paid monthly to the investment account, at the rate of 75% of the average overnight federal funds rates for the preceding week, as reported in the Key Interest Rate column of the Wall Street Journal. Funds in an investment account are not insured by the FDIC.