Are you curious to know what is auto sweep facility? You have come to the right place as I am going to tell you everything about auto sweep facility in a very simple explanation. Without further discussion let’s begin to know what is auto sweep facility?
Auto Sweep Facility stands as a popular banking feature that optimizes your funds, ensuring they work efficiently to earn maximum interest while being easily accessible when needed. This article is a detailed exploration of the Auto Sweep Facility, its mechanisms, benefits, drawbacks, and how it operates across various banks.
What Is Auto Sweep Facility?
The Auto Sweep Facility is a smart banking feature that automatically transfers surplus funds from a savings account into a fixed deposit (FD) or linked investment option to maximize returns. It ensures that idle money in your savings account doesn’t remain dormant but earns higher interest.
What Is Auto Sweep Facility In Sbi?
State Bank of India (SBI) offers the Auto Sweep Facility, known as Multi Option Deposit Scheme (MODS), wherein surplus funds above a threshold in the savings account are swept into term deposits, providing higher interest rates.
What Is Auto Sweep Facility In Bank?
Various banks offer Auto Sweep Facility with different names, such as HDFC Bank’s Sweep-In Facility, PNB’s Auto Sweep Facility, or Canara Bank’s Flexi Fixed Deposit, all designed to help customers earn higher interest on their idle funds.
How Does Auto Sweep Facility Work?
When the balance in a savings account exceeds a predefined limit (threshold), the excess amount is automatically transferred into a fixed deposit or a linked investment scheme, typically in multiples of a certain amount, ensuring liquidity and earning higher interest simultaneously.
What Is Auto Sweep Facility Example?
For instance, if the threshold limit is set at Rs. 25,000 and your savings account has Rs. 40,000, Rs. 15,000 will be moved to a fixed deposit. This way, your idle funds start accruing higher interest rates.
Auto Sweep Facility Banks List
Numerous banks like HDFC, SBI, PNB, Canara Bank, and more offer Auto Sweep Facility with varying terms, interest rates, and minimum thresholds.
Disadvantages Of Auto Sweep Account
While this feature offers higher interest, withdrawing funds might affect the overall interest earned, as it may break the linked deposits prematurely, resulting in lower interest rates on the withdrawn amount.
How To Deactivate Auto Sweep Facility In Kotak Mahindra Bank?
Deactivating the Auto Sweep Facility in Kotak Mahindra Bank usually involves visiting the bank branch or using the online banking portal to modify account settings as per your preferences.
Auto Sweep Interest Rate
The interest rates offered on Auto Sweep accounts vary among banks and depend on the tenure and amount of the linked fixed deposits.
Conclusion
The Auto Sweep Facility serves as a dynamic tool for maximizing returns on idle funds, balancing liquidity with higher interest earnings. It’s crucial to understand the specifics and terms offered by your bank to make informed decisions regarding the allocation and management of your finances.
In a nutshell, the Auto Sweep Facility empowers individuals to make the most of their savings by intelligently allocating surplus funds, earning optimal interest rates without compromising on accessibility.
FAQ
Is Auto Sweep Better Than Fd?
Normal fixed deposits are ideal for individuals who have a lump sum amount to invest and are looking for a fixed return at a fixed tenure. Auto-sweep FDs are better suited for individuals who maintain a high balance in their savings account and require flexibility in their investments.
What Is Auto Sweep And How It Works?
With an auto-sweep account, your savings account is linked to a fixed-deposit account and a monetary limit is defined. Whenever the amount in the savings account crosses that defined limit, the excess money is transferred automatically into the fixed deposit.
Which Bank Is Best For Auto Sweep Facility?
Banks with Auto Sweep Facility
- Bank of Maharashtra- Mixie Deposit Scheme.
- Bank of India- BOI Savings Plus Scheme.
- Kotak Bank Sweep in Bank Account.
- ICICI- Money Multiplier Account.
- Axis Bank- Encash 24.
- Allahabad Bank- Flexi Fix Deposit.
- HDFC Bank- Sweep in Facility.
- Kotak Bank Sweep in Bank Account.
Can I Withdraw Money From Auto Sweep Account?
When the money in the account exceeds this threshold limit, the excess amount will automatically be transferred to your fixed deposit account. This procedure is referred to as sweep-in. Remember that both these accounts will receive their interest earnings. But, it does not mean you cannot withdraw the excess amount.
I Have Covered All The Following Queries And Topics In The Above Article
What Is Auto Sweep Facility In Sbi
What Is Auto Sweep Facility In Bank
What Is Auto Sweep Facility In Hdfc Bank
What Is Auto Sweep Facility In Pnb
Disadvantages Of Auto Sweep Account
What Is Auto Sweep Facility Sbi
What Is Auto Sweep Facility Hdfc
What Is Auto Sweep Facility Example
Auto Sweep Facility Banks List
How To Deactivate Auto Sweep Facility In Kotak Mahindra Bank
Auto Sweep Interest Rate
Auto Sweep Facility In Canara Bank
What Is Auto Sweep Facility
