Sweep Accounts

Sweep Accounts

For virtually any size business, the Business Sweep service is the ultimate cash management tool. The sweep system automatically settles your cash position at the end of each banking day, allowing you to minimize interest paid and maximize interest earned.

How It Works

After all debits and credits have posted to your account, the system invests your excess funds. The system can also be set up to manage your borrowings against a line of credit. A target balance can be set so that a sufficient collected balance stays in the account to offset service charges.

Investments

Excess funds are invested in an overnight repurchase agreement (repo). The repo investments at Pinnacle may include U. S. Treasury securities, such as bonds or T-Bills, and other agencies of the U. S. government. The initial investment must be at least $1,000, with additional funds invested in $1,000 increments.

Borrowings

The sweep system can also be used to minimize interest expense incurred from borrowing against a line of credit. The system creates a link between a checking account and a line of credit. If the ending collected balance in the account is less than zero, the system will draw the amount needed from the line to get the balance back to the established target balance. The minimum draw amount is $1,000, with additional funds drawn from the line in $1,000 increments. When the ending collected balance in the account is greater than the established target balance, the sweep system will pay down the line of credit in $1,000 increments.

Investment and Borrowing Combination

When an account is set up for overnight investments and is tied to a line of credit, the sweep system will first use excess funds to pay down the line of credit. Investment transactions are considered only when there is no outstanding balance on the line of credit.

For more information about our services, call your Pinnacle financial advisor or contact one of our treasury management advisors.

Middle Tennessee 615.743.6200
East Tennessee 865.766.3031
Toll Free 866.839.2781
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