What Is Cash Sweeping?
Cash sweeping is the name given to the centralized deposit of daily cash receipts from your retail business into your checking account.
Before the monetary system became digitized and electronic, this was done daily by the employees of a business when they got to work.
They would go through all the tills and tot up the money from each till.
Then they would place the money into a cash bag, and a member of staff would take the cash bag and deposit it into a bank account. In a way, this is what cash sweeping still is. A cash bag has now become digital.
You can choose to have the funds transferred into your business bank account at the end of the day, at the end of the week or at the end of the month.
Whatever suits your business needs is best for you, and for most businesses, it is the best way to manage your finances.
Within financial accounting, cash sweeping is defined as effectively moving cash from a low interest bearing account to a high interest bearing one.
It can also be seen as transferring the profits of your business which is better managed by bankers than yourself.
Cash sweeping is also known as cash rides and inter-account transfers, and the main purpose is to move cash around to make the most effective use of your finances. There will be balances from day to day, depending on the business, and cash sweeping makes it easier to manage that balance.
How Robo Advisors Are Utilizing Cash Sweeping
Accounts To Generate Passive Income?
Over the past year or two, robo advisors have been one of the hottest topics in the financial planning world … and for good reason. Low fees, automated investing, and the lowering costs of technology are combining into a perfect storm that’s going to make a lot of traditional advisors obsolete.
Of course, the immediate reaction from financial advisors is to create their own robo advisor so they can compete.
These advisors are doing a slew of different things in order to fight back, but most of them are taking the same technical approach. They create an algorithm, plug in some numbers, and let their robots handle the process from there.
But there’s another fascinating approach that a few advisors are taking. In fact, this approach may be even more powerful than the robo advisors. It’s called cash sweeping and it can be an incredibly powerful tool for passive income and cost-savings.
What Is a Cash Sweep
To begin, we’ve got to define what a cash-sweep is before we dig into the goodness. Cash-sweeping simply refers to the reinvestment of dividends and interest, rather than adding it to a brokerage account.
What's the Catch?
The advantage of these programs is the chance to win big prizes without going through the trouble of gambling. The downside is that you're expected to join a bunch of other players to be eligible, and many sweepstakes participants complain about the difficulty in winning a sweepstakes. Normally, you must fill out an entry form, wait for a response, and then hope that you win. However, with Cash-Sweeping, you will have to wait no longer.
Cash-Sweeping is a variation of the Sweepstakes. It is a great opportunity for everyone to learn what free money is all about. Many people love the idea of winning money without having to play a lottery or bet on a gaming machine, but with Cash-Sweeping it is easy to win. It is basically like playing a lottery simply because you join many people who enjoy the same thing way too much. Therefore, it is easy to win big and easy to win little. It is an opportunity to learn a lot more about the internet and software today.
Cash-Sweeping offers a great chance for people to try and win cash prizes while using the internet in order to find information. Today, there are many websites that offer users the opportunity to win money and prizes without having to gamble. Cash-Sweeping is the best example of this. With only a few clicks of the mouse, you will have a chance to win whatever prize you want.
Summary
A cash-sweeping account is a type of account that has the ability to ‘sweep’ any interest and dividends gained into a designated investment. Usually, this account will have a set interest rate that will be given to that account regardless of the amount of money the account holds. But at the same time, if the interest rate is set to a higher level, the account will typically be setting high minimum balances for opening and maintaining the account. Some rules of any new account will be that they should set a minimum times that each week or month the funds should be swept or moved from the account.
The primary advantage of cash-sweeping accounts is that if other accounts of this type have the ability to increase the amount of money deposit interest and other compounding interest. The funds are moved from one account to the next and therefore increase the interest rate of the investment account. If the interest rate is increased, more money will remain in the new account increasing the amount of money to be invested in the long run.