A sweep account is a checking account that ________.
A)bears interest, allowing depositors to write checks without tying up money for a specific period of time
B)never has funds as they are drawn from a master account
C)automatically moves all funds in a company's checking account above a predetermined minimum into an interest-bearing account
D)need to be reviewed and updated on a regular basis

Question

Quizplus · Accepted Answer

A sweep account automatically moves funds from a company's checking account above a predetermined minimum into an interest-bearing account. This allows the company to earn interest on excess cash without having to manually transfer funds. Option A describes an interest-bearing account, but not specifically a sweep account. Option B is incorrect as a sweep account is meant to have funds available for transactions. Option D may be true, but it does not specifically describe what a sweep account is.

A Sweep Account Is a Checking Account That ________