Defining Sweep Accounts

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Sweep accounts take the excess revenue from a stock and place it into another investment so that the money can work harder. Learn about the popularity of sweep accounts in an online trading platform with help from a registered financial consultant in this free video on investing and money management.

Part of the Video Series: Investment Basics
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Video Transcript

This is financial adviser Patrick Munro talking about defining a sweep account. Basically a stock account will generate various rates of return and things of that nature throughout the course of action. When you participate in a stock it will generate excess revenue. What happens is a sweep account can be installed to come in behind there and harvest out the excess revenue and place it into another investment and therefore making the two investments work even harder side by side. So as one sweeps off money and this works by the way in a bullish market as opposed to a bearish market, the sweep account will just like a kitchen, sweep up the various tidbits of money and put them into a place that's working even harder. It's an efficient strategy that primarily is done nowadays through an electronic trading platform. But this is what we're talking about when we define sweep account. This is financial adviser Patrick Munro.


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