Sweep and Target Balance work together to help you efficiently manage the cash in your business accounts.

What is a Target Balance?

A Target Balance is the specific balance you want maintained in your business checking account. For example, if you would like for your business checking account to always have a balance of $5,000.00, your target balance would be $5,000.00. Your banker will help you decide what target balance makes the most sense for your business, based on your needs and activity. Target balances may be set to the amount needed to offset service charges or to zero (this is often referred to as a Zero Balance Account).

What is a Sweep Account?

A Sweep Account automatically transfers money between accounts based on parameters that you set. Your business checking account is reviewed daily and excess funds are automatically "swept" into an overnight borrowing account to earn interest or to a line of credit to pay down balances. When you need the funds, the money is swept back into your business checking account. The type of account (overnight borrowing account or line of credit) used with your sweep account will depend on the specific needs of your business.

How does a Target Balance account work with a Sweep?

• You establish a general operating account, typically this is a business checking account.
• Your business checking is generally linked to one or more Target Balance accounts.
• Each Target Balance account is assigned a specific disbursement function, such as payroll, taxes, operating expenses, or an individual depository location or division.
• As funds come out of the Target Balance account, transfers are made to cover checks and other debits drawn on the account, as needed.
• At the end of the day, funds exceeding the "target balance" are automatically transferred or "swept" into your general operating account.

Benefits of Using a Target Balance Account and Sweep Together

• Save staff time by replacing the need to monitor account balances with the convenience of automation.
• Reduce or eliminate idle balances
• Put your available cash to use by pooling it in your general operating account or applying it to your line of credit.
• Completely customize your account set-up, based on your business needs and structure.

Which Businesses would benefit from using a Target Balance Account?

A Target Balance Account or Zero Balance Account would make sense for your business if:

• Your business has multiple depository or disbursement accounts
• You want to reduce staff time spent monitoring and transferring funds between separate accounts
• You want to fund an account on an "as needed" basis