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New Delhi. Auto Sweep Facility is a banking facility that gives the benefits of your savings account and fixed deposit (FD) simultaneously. In this, the bank automatically converts the extra money you keep in the savings account, which gives you interest like FD. Not only this, if needed, you can easily withdraw it without breaking FD, like withdrawing money from the savings account. You can go to your bank and choose the option of sweep-in-FD in your savings account.
Special things of this scheme:
Interest Rate-
The additional amount that is converted into FD in auto sweep account gets interest on FD (eg 6% – 7%, according to the bank). This interest is higher than the savings account.
Liquidity-
If you need money, you can withdraw money at any time. The amount it needs, the more FD breaks.
Threshold Limit-
The bank sets a threshold limit (eg ₹ 25,000). The money above this automatically turns into FD. The bank also gives the account holder the option to customize it according to the need.
Tenure-
The duration of sweep-in FD depends on the bank’s rules and the customer’s choice. Sweep-in FD is usually for 1 to 5 years.
Suppose your savings account is Rs 50,000 and the threshold limit is Rs 25,000. The remaining 25,000 will be transferred to FD, on which you can earn up to 6-7 percent interest. If you want to withdraw Rs 40,000, then Rs 25,000 will be from savings and Rs 15,000 will be sweep-in from FD.
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