Louis Mangione

Innovations in Education, Inc.

Bank Sweep Repurchase Agreement

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The Insured DDA Cash Sweep has been designed for commercial clients who want to invest holdings in excess of $250,000 and certainly get high interest rates for your investment. The funds are invested daily among a pool of banks participating in the ICS program and distributed among several banks. Each bank will have less than US$250,000 to maintain FDIC coverage. This approach offers a high level of liquidity and, if customers prefer, they have the option of excluding certain banks from holding their assets. The largest corporate bank accounts are charged many fees for each of the services offered by the bank (for example. B a fee per cheque deposited), but the bank charges these fees based on the company`s account balances in a process known as account analysis. Some businesses choose to scan all their funds into a scan account if they think the increase in revenue will offset more than the fees they would have reimbursed if they had left the money in the account. Other companies calculate the approximate amount needed to pay the fees and then only sweep away funds in excess of that amount. Sweep/repurchase contracts are guaranteed commitments of the bank. All amounts placed on sweep/repurchase contracts are not bank deposits, are not insured by the FDIC and are not guaranteed in any way by the United States or any of its branches A sweep account combines two or more accounts at a bank or financial institution and moves funds between them in a predetermined manner.

The options for scanning investments are often the following: MONEY MARKET funds and “eurodollar sweeps” or “repo sweeps”. Note: the interest rates of sweep/repurchase contracts are set by the Bank and may change daily. “Repo-sweeps” (“repo” means “retirement”) refer to companies concerned about the security of the bank. In this agreement, the funds deposited with the Bank are guaranteed by part of the Bank`s bond assets. If the bank defaulted, the depositor would only receive the bond holdings and could then sell the bonds to get his money back (unless bond prices occurred in the meantime). If the first calculations are done correctly, the interest rates on cash and investment returns should generate a return high enough to increase the total value of the sweep account. Eurodollar sweeps are legal transfers of money to the bank`s offshore units, while they are essentially just an accounting technique that allows banks to lend the funds in full without the required reserve requirements and without having to pay for FDIC insurance (the sweep is not insured). For the most part, the funds are only unsecured liabilities of the Bank and therefore receive the highest interest rate offered by the Bank for overnight loans.


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