Key offers three Investment Sweep products:
- Repurchase Agreement (Repo) Sweep:
- An overnight investment that consists of direct obligations of, or those that are fully guaranteed as to the principal and interest by the U.S. Government or agencies. Repo investments are collateralized at 100% of market value. The Repo Sweep is specifically designed for you if you are a corporate client of Key’s and are seeking security for your funds in line with your investment objectives. Public entities that are eligible for collateralized deposit accounts are not eligible for the Repo Sweep.
- Automatic Investment Sweep:
- An Automatic Investment Sweep is an open term investment in a selection of money market mutual funds provided by Federated Investors. Investment (fund) selections are limited to those with fixed net asset values (NAV) and no redemption gates or fees. These fund selections include Government Obligation Funds (CUSIP: GOIXX), Treasury Obligations Fund (TOIXX), and U.S. Treasury Cash Reserves (UTIXX). Investments and earnings remain in the investment account until needed to restore the target balance in the bank account.
- Commercial or Public Interest Sweep
- A Commercial or Public Interest Sweep is an open term savings in an interest bearing deposit account at KeyBank. Investments and earnings remain in the savings account until they are needed to restore the target balance in the bank account. There is no limit on the number of transfers in or out per month.
KeyBank does not provide investment advice. However, some things to consider when making your decision could include your investment policy, KeyBank’s financial strength, Federated Investors financial strength, underlying investment rating and prospectuses, FDIC coverage, etc.
No, all funds in the bank account are not available to be swept out. Sweep calculations are based on Collected Balances. KeyBank sets a minimum target balance of $25,000 to remain in the bank account. Repo Sweep transfers are made increments of $2,500. Automatic Investment Sweep and Commercial or Public Interest Sweep transfers are made in any amount.
Not necessarily. Key’s system automatically considers available funds an open-term Investment Sweep accounts when determining availability for posting debits.
No, your open-term Investment Sweep account cannot receive transactions directly. The only transactions that can occur in Investment Sweep accounts are transfers to or from the bank account.
No, you cannot elect to receive your interest / dividend credit in an account other than the Investment Sweep account.
No, you do not need to maintain separate account opening documentation and signature cards for your investment account. Since Investment Sweep accounts cannot accept transactions directly, no account documentation is needed other than a Service Schedule Agreement.
Yes, Key will issue 1099s for Commercial or Public Interest Investment account earnings which are considered interest. Key will send a 1099 if the annual interest paid is $10 or more. Repo and Automatic Investment Sweep earning are not considered interest and Key will not send a 1099, you must self-report your earnings.
Yes, you will receive a separate monthly statement for your open-term investment account. Monthly statements are available for Automatic Investment sweep and Commercial or Public Interest Sweep accounts, delivered electronically via Key Total Treasury or on paper via the U.S. postal service.
In addition to being able to view transfers to and from your bank account via the Key Total Treasury Previous Day Report, there are additional reports available depending on the Investment Sweep account(s) you have.
- For Repo Sweep accounts, you will receive a Daily Sweep Confirmation that details the calculation of investable funds, the daily investment rate, daily earnings, month-to-date earnings, year-to-date earnings, and it will also identify the collateralizing security.
- For Automatic Sweep accounts, you will receive an Automatic Investment Sweep Daily Report that provides your investment account balance, purchases, redemptions, daily rate, daily earnings, and month-to-date earnings.
Overnight LIBOR and Prime Rate based lines of credit can have a Credit Sweep. 30 / 60 / 90 day LIBOR based lines, Participations, and Term Loans are not eligible to use the Credit Sweep service.
In addition to being able to view transfers to and from your bank account on the Key Total Treasury Previous Day Report, a daily Credit Sweep Report is also available. The daily Credit Sweep Report displays total commitment and rate*, previous day loan balance, net loan activity*, sweep paydown / advance amount, current day opening loan balance, and amount available*.
*For some loans, this information is not displayed on the Credit sweep Report but can be viewed in the Key Total Treasury Loan Management module.