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## 2.3 Target Balance/Minimum Balance

This topic provides the information about the Target Balance/Minimum Balance method.

There are two different types of the target balance as follows:

- Constant Target Balance/Minimum Balance: The system ensures that a specific amount is present in the child account by moving the balances from the child accounts to the parent account and vice versa. The balances in the child accounts are constant and cannot be zero.
- Fixed Target Balance: The system ensures that a fixed target balance is present while moving funds from child accounts to parent account. When the child accounts have a debit balance, the parent to child sweep from parent account to the child account is equal to the debit amount on child account which brings the child account to zero balance.

Child to Parent Scenario

If the child account balance is above the minimum balance, the system sweeps the positive difference between the child account balance and minimum balance to the parent account (sweep balances above the minimum balance from the child account). If the child account balance is below or equal to the minimum balance, the system does not execute the sweep instruction.

Parent to Child Scenario

If the child account balance is below the Minimum\Target Balance, the system tries to bring the child account balance to the target amount (Constant Target).

If the child account balance is positive but below the Target Balance, the system tries to bring the child account balance to the target amount (Fixed Target).

If the child account balance is negative and below the Target Balance, the system tries to bring the child account balance to zero (Fixed Target).

If the minor balance is below the minimum balance or is overdrawn, and the parent balance is negative or not sufficient to cover the OD + minimum balance the system does not execute any sweep instruction.

If the balance in the parent account is not sufficient to cover the overdraft in the child account either sweep is not executed or sweep is executed up to the balance available in the parent account.

If more than one child account is in negative balance, the transfer from the parent account is based on the priority set at the child account (Least numeric is given top priority) and the available balance on the parent account.

When sweeping from parent account to child account, the parent account balance cannot go below Zero if unlimited OD is not selected at the account level. If it is checked, sweeps can be executed without any limit to cover the child overdrafts till all the child account balances are set to zero.

Parent topic: Cash Concentration Methods