Accounting Dictionary

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Sweep Account

Definition: A sweep account is a bank account that is linked to an investment account. The bank automatically sweeps incoming cash from the sweep account and into the investment account if there is an excess funds balance in the sweep account, or it may shift cash back into the sweep account if the controlling entity has specified a target cash level for it, and cash levels are currently below the target level. Sweep accounts are used to concentrate cash for more effective investment and centralized payment activities.