Letting water collected during the day settle over night can be an effective way of improving the clearness of water by reducing turbity (very murky water) and is a cheap alternative to sand filtering.
However you must leave undisturbed for a sufficient period of time (at least 10 hours), out of sunlight (at night), in a sealed container is best.
Warning: Must be used in conjunction with Filtering. This is only a pre-treatment to make Filtering more effective!!