Sweep accounts can be an effective and easy way of investing any cash surpluses you have. A sweep account is a combination of a regular checking account and a money market account. Sweep accounts were designed with small businesses in mind since most small business owners do not have the time or the large cash surpluses necessary to take advantage of more profitable investments. By combining a regular checking account and a money market fund, sweep accounts eliminate the need for you to estimate bank balances and move funds from your checking to an investment account when necessary.

With a sweep account, you are required to maintain a certain balance in the account. The bank then "sweeps" the account and removes any funds that exceed your required balance. The bank automatically invests the excess funds in a money market account selected by you. When your account drops below its required balance, the bank automatically "sweeps" back enough money to your account to bring it up to its minimum balance.

Most banks will charge a fee for operating a sweep account and only allow a certain number of transactions per account before incurring extra transaction charges. Each check written on the account and each check deposited into the account is considered a transaction. All transactions over the maximum are subject to a separate transaction fee.

The money market fund you direct the excess funds into will determine the yield on the money market portion of the sweep account.