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Enhance interest earnings on excess funds with an automatic investment sweep.
Available to institutions and public entities, our Institutional Cash Management Account optimizes interest earnings with automatic sweeps to an overnight repurchase agreement (repo). This provides interest on excess funds and eliminates any surplus cash position, allowing specified cash levels to be maintained.
Based on a predetermined threshold balance, excess cash in your checking account is automatically transferred to or from your investment account as needed. This enables you to earn competitive daily interest while also covering disbursements from your checking account. With this account, you’ll be certain that the most is being made of your surplus cash.
The Advantages
Security: Fully collateralized (up to 102%). Securities underlying repurchase agreements are securities from the Bank’s general investment portfolio and include US Treasury Securities, US Agency Securities and Agency Guaranteed Mortgage Backed Securities.
Interest Earnings & Increased Cash Productivity: Excess funds in your checking account can be automatically invested every day, earning competitive rates.
Liquidity: Ready access to cash with unlimited checkwriting ability.
Convenience: Automatic transfers between your checking and investment account saves you the time and expense of anticipating when disbursements will clear.
Cost Savings: The threshold balance maintained in your checking account should represent the collected funds necessary to offset charges for your First Midwest deposit services. Plus, invested dollars in the repo are not charged for FDIC insurance as they are not FDIC insured.
Documentation: A daily notice will provide dollar amount and collateral for easy record keeping and auditing.
PC Banking Option: With Bank-On-It, maintain depositories and move funds to your First Midwest Bank Cash Management Account quickly and easily with ACH transfers initiated from your office.
How it Works
Once a one-time master repurchase agreement is executed, your company’s checking account is automatically linked to an overnight repurchase agreement. When cash in your First Midwest checking account exceeds the established threshold, this cash is automatically invested in a repurchase agreement that offers competitive yields. Likewise, when your checking account balance drops below the established threshold, the process is reversed and cash automatically flows from your repurchase agreement into your checking account.
1. Threshold Balance: All cash above a certain predetermined amount in your checking account is automatically swept at the end of the business day and invested into an overnight repurchase agreement.
2. Interest Earned: Interest is earned on every dollar invested until the funds are needed to cover your cleared checks.
3. Automatic Funds Movement: If your checking account balance drops below the preset threshold balance, money is automatically swept back from the repo to maintain that minimum balance.
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