Purpose

• Sweep repurchase agreements are automatic investment strategies that use a checking account's excess funds for earning power. Funds are automatically used to purchase securities. The securities are then sold the next day. The Federal Deposit Insurance Corporation regulates whether the funds are covered under the insurance protection provided by the FDIC. The FDIC regulations stress many factors, including the depository institution's responsibility to inform depositors whether the FDIC covers the sweep account amounts.
  
  

Process

• A checking account has an established target balance. Each day, the amount above the target balance is automatically swept into a repurchase agreement investment account. The money is used to buy securities in investments outside of or within the depository institution. Each day or month, depending on the bank, earnings from the sweep investment account are credited back into the checking account.
  
  

Benefits

• Sweep repurchase agreements offer an automatic way of investing for depositors. The securities are automatically purchased and used to make money. Idle money is used for making money and you don't have to take any action.