A scanning account combines two or more accounts in a bank or financial institution and moves funds between them in a predetermined manner. Sweep accounts are useful for managing a constant cash flow between a cash account used for scheduled payments and an investment account that allows cash to get a higher return. The amount of cash available for a cash-sweep is calculated as follows: If the first calculations are done correctly, interest on money and returns on investments should yield a sufficient return that increases the total value of the scanning account. Some companies choose to transfer all their funds to a sweep account if they think the higher profits will offset more than the fees they would have been given if they had left the money in their account. Other companies calculate the approximate amount needed to clean up royalties, and then scan only funds above that amount. Eurodollar sweeps are transfers of legal funds to the bank`s offshore units, whereas they are essentially an accounting technique that allows banks to lend the funds in full without having to pay the required reserves normally required and without having to pay FDIC insurance (since the sweep is not insured). Essentially, the funds are only unsecured liabilities of the bank and, therefore, the highest interest rates are offered by the bank on day-to-day loans. The financial innovation of scanning accounts is particularly interesting because it has been stimulated not only by the desire to avoid costly regulations, but also by a change in delivery conditions, in this case technology. “repo sweeps” are for companies that are concerned about the security of the bank. In this contract, funds deposited with the Bank are secured by a portion of the Bank`s outstanding loans. If the bank were to fail, the depositor would receive only the bond holdings and then sell the bonds to get their money back (unless something happens in the interim with bond prices). In the banking sector, scanning accounts are mainly used as a legal circumvention to prohibit the payment of interest on business current accounts. [Citation required] In this system, funds are described as “swept overnight” in an investment vehicle.

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