Liquidity

Liquidity Services include: Mutual Fund Sweeps, Line of Credit Sweeps and Zero Balance Accounts (ZBA)

Mutual Fund Sweep Accounts*

A sweep account automatically transfers excess balances from a commercial checking account to an account with investment options.  At the same time, these balances stay readily available to cover your payables.

Cash Sweep Action Diagram

How your company benefits:
  • Efficient use of funds – Automatically keeps excess cash invested and earning a competitive yield
  • Increased liquidity – Your funds are available overnight
  • Diversification of investments – Multiple fund choices are available
  Consider this service if your company:
  • Has excess funds available to invest
  • Has a need for liquidity of funds
  • Would like a higher rate of return

Line of Credit Sweep Accounts

First American Bank will automatically transfer available funds from your line of credit to your checking account should additional funds be needed to cover incoming debits. We offer an additional service that will automatically transfer excess funds from your checking account to your line of credit or term loan to reduce your interest expense.

One-Way Sweep: Transfers money from your line of credit to your checking account when your balance drops below a predetermined level, protecting you from overdrafts or maintaining your account with the amount of cushion you prefer.

Two-Way Sweep: Not only transfers money into your checking account when it drops below a certain level, but also transfers money out of your checking account when it exceeds a predetermined amount and uses it to pay down any outstanding principal on your line of credit or term loan.

How your company benefits:
  • Provides the convenience of automatic transfer
  • Improves cash flow
  • Reduces interest expense
  Consider this service if your company:
  • Has a line of credit or a term loan as well as a checking account with First American
  • Requires certainty that funds will always be available to cover incoming debits
  • Wants to reduce interest expense     [top]

Zero Balance Accounts (ZBA)

A Zero Balance Account (ZBA) is a checking account that is designed to maintain a zero balance, even as checks are written against it. The ZBA is funded by a primary account that generally receives all deposits and disburses funds to the ZBA only when necessary to cover checks that have been presented for payment. More than one ZBA can be linked to a centralized primary account.

How Does a ZBA Work:
Each day, debits accumulate in the ZBA as checks clear against it. At the close of the business day, funds from the primary checking account are swept to the ZBA, bringing its balance back to zero. This sweep function eliminates any possibility of overdrafts as long as the primary account is properly funded.

How your company benefits:
  • Flexibility - separate your different types of payments:
    - Payroll
    - Health Care
    - Vendors
    - General Payables
    - Multiple accounts for divisions or locations
       with decentralized authority
  • Increased Control - concentrate your funds in a single account to make sure that each account only receives the funds needed, while making any additional funds ready for investment.  It also eliminates idle balances in multiple disbursement accounts.
  Consider this service if your company:
  • Has different accounts for different payables i.e. payroll, health care, accounts payable etc.
  • Processes deposits from different locations that need consolidation to one account
  • Streamline process of deposits
  • If you have multiply store locations and want to consolidate receivables     [top]

*Disclosures
You will receive a prospectus. Please read it carefully before investing or sending money. Not FDIC Insured. May Lose Value. No Bank Guarantee. An investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

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