Sweep Accounts Question:
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How sweep account actually works?

Answer:

★ A cash account is set up first and a lump sum of money is deposited into that account.
★ A financial adviser and the client will discuss and determine an average balance that should be kept in this account. Depending on the institution's service, this amount may be pre-determined.
★ Most of the extra cash above the average balance will be invested into a money market, CD, or some other form of investment that can be easily liquidated.
★ When the balance in the cash account falls below the pre-determined average balance, some of the investment is liquidated and the proceeds get deposited into the cash account, thus maintaining the average balance.

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