An interest sweep is a process that is used to move excess cash from one investment option to another. This can be done in order to improve the overall returns of the portfolio, or to reduce the risk exposure of the investments. In this guide, we will discuss what an interest sweep is, and how it can be used in a variable annuity!
How Does An Interest Sweep Work
An interest sweep is typically performed on a monthly basis. The process begins by calculating the excess cash that is available in the portfolio. This excess cash is then swept into the investment option with the highest rate of return. For example, if you have a portfolio with $100,000 and an interest rate of 0.75%, you would have $750 in excess cash that could be swept into another subaccount.
What Is The Benefit Of An Interest Sweep?
An interest sweep is a tool that can be used to improve the overall returns of a variable annuity. By sweeping excess cash into the investment options with the highest rates of return, you can earn more money on your investments over time. This process can also help to reduce the risk exposure of your investments, as you are not investing all of your money in one option.
If you are thinking about using an interest sweep in your variable annuity, be sure to contact us to discuss whether it is right for you. Interest sweeps can be a great way to improve the returns of your investment portfolio, but they may not be suitable for everyone.
Do you have any questions about interest sweeps in variable annuities? Please contact us and let us know! We would be happy to answer any of your questions.
We hope that this guide has been helpful in explaining what an interest sweep is, and how it can be used in a variable annuity. If you have any further questions, please don’t hesitate to contact us. We would be happy to help! Thank you for reading!