Bank Sweep Account Agreement
Scanning accounts are a typical business tool, especially for small businesses that depend on daily cash flows but want to maximize the return potential on cash reserves. A company sets a minimum balance for its main current account, through which funds are paid into a higher interest rate investment product. If the balance falls below the threshold, the funds are rejected from the investment account to the current account. a. Description of the program. The FDIC Bank Sweep program automatically sweeps your eligible free assets into an interest deposit account (“deposit account”) held in one or more participating banks (“Programmbank (s)”). You do not have a direct account relationship with the Program Bank (s), unless you have a separate account in that bank outside of the FDIC bank`s scanning program. In any case, your money is held in an omnibus account in the name of “DriveWealth, LLC as an agent and administrator for the exclusive benefit of its customers.” You have an economic interest in the Omnibus account equal to the total amount of your free balances. DriveWealth keeps records of your ownership of the fund; Your position is not directly held in the Bank Program`s records.
There is no need for a minimum fund to participate in the FDIC bank`s sweeping program and there is no permanent minimum deposit requirement. There is also no minimum period during which your eligible funds must be deposited with a program bank, nor is there any limit on the number or total value of withdrawals DriveWealth can influence under the FDIC Bank Sweep program. B. FDIC insured accounts. The FDIC Bank Sweep Program offers you the security of the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage. FDIC Insurance is supported by the full and solvent faith of the U.S. government. FDIC insurance protects your eligible funds in the event of a deposit of funds with a bank program under the Bank Sweep to the maximum limits allowed in the event of a bank failure.
Currently, the maximum deposit guarantee is two hundred and fifty thousand dollars ($250,000) per legal category of account ownership in the Bank Program, if aggregated with all other deposits that you may hold in the same legal category of account at the Program Bank. Funds you deposit with a program bank outside the FDIC Bank Sweep program are not taken into account when deciding whether to sweep eligible free funds to the program banks. You are solely responsible for controlling the total amount you have with the program bank (s) in relation to the FDIC insurance limits. Depending on your individual facts and circumstances, additional funds may be available for FDIC coverage. For more information, see FDIC summary at the end of this document. Individual accounts. If your account is a single account, the FDIC has aggregated all the accounts you have in the same bank and insures those accounts up to the coverage limit of $250,000. Starting in 2016, some brokerage accounts had similar functions that allowed investors to obtain an additional return for unused cash. Scanning accounts are simple mechanisms that allow you to sweep any money above or below a threshold set in a current account to a better investment vehicle.