A sweep account automatically moves your idle cash into a higher-earning investment whenever your checking account balance exceeds a preset threshold. At the end of each day, the "excess" is swept into a money market fund, short-term deposit, or other investment.
Example: You set a threshold of $5,000. Your checking account has $12,000 at day's end. The sweep mechanism automatically transfers $7,000 into a money market fund earning 4-5% interest. When you need cash, the funds sweep back into your checking account. It is seamless.
Sweep accounts are popular with businesses and high-net-worth individuals who maintain large bank balances. Without sweeping, that cash earns little to no interest in a regular checking account. Banks also use sweep mechanisms internally to optimize their own liquidity and meet reserve requirements.