(Bloomberg) -- Citigroup Inc. plans to offer automatic-sweep products seven days a week as banks respond to clients’ demands for higher interest rates on deposits and faster access to their cash.
Starting with the US and South Korea, the New York-based bank will now allow customers to automatically move funds into one central cash-management account every day, according to a statement Wednesday.
As the Federal Reserve rapidly pushes its benchmark rate higher, corporate customers are on the hunt for better returns on their cash. Banks are also facing increasing calls from customers to help them move their money more quickly so they can better manage their cash. Historically, corporations couldn’t automatically sweep funds on weekends and holidays, putting them at risk for overdraft fees and other charges.
“Cash concentration is a simple and efficient solution used by companies to help optimize interest income and reduce interest costs across accounts in their sweep structures,” Michael Berkowitz, global and North America head of product management, liquidity-management services in Citigroup’s treasury and trade solutions business, said in the statement.
Demand for seven-day sweeps has also increased with the growing number of companies running their businesses through weekends and holidays, “particularly among fast-moving, high-growth technology and e-commerce companies,” Berkowitz said.
(Updates with impact of rate hikes starting in first paragraph.)
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