Introduction to Federal Reserve Account Sweeps

The Federal Reserve Sweeps feature allows banks, through an accounting process, to sweep customer balances between two transaction and non-transaction sub-accounts daily. Users are then able to search on individual customer accounts to review the Fed Reserve Sweeps balance details.

Users can also produce daily trail balances providing the balance details for all accounts within the Federal Reserve Sweep process.

For the products defined in the parameter table, when a new customer checking account is created, the system creates two additional sub-accounts. One is a transaction account (Sub-Account 1), and another is a non-transaction account (Sub-Account 2), which is utilized for the Federal Reserve Sweep process. These sub-accounts are off-balance-sheet accounts. Daily, the system sweeps funds between the two sub-accounts based upon a target balance concerning the customers' daily activity checking account.

Monthly, Temenos Transact analyzes each account associated with the Federal Reserve Sweep feature, and a new target balance is determined based upon the average prior monthly balance. The balances are then reallocated between the two sub-accounts based on the new target balance.