A sweep account is a bank account that automatically shifts cash balances into an investment account at the end of each business day. The funds are then invested in a safe and highly liquid investment vehicle, such as money market funds. Sweep accounts are commonly used when there are a number of bank accounts that collect significant amounts of cash on a daily basis. This approach is more cost-effective and less error-prone than shifting funds manually, and should result in a modest return on investment.
The software logic used to move funds from a sweep account can also be reversed, to shift cash back into the account if the controlling entity has specified a target cash level for it, and cash levels are currently below the target level.