What is Fixed Deposit sweep-in?
You may or may not have heard about this term, ‘Fixed Deposit sweep-in’ facility which is offered lately by some of the banking institutions in our country. This is a good option if you have a good amount of cash in hand and are looking for good returns.
How does it work?
If you opt for this facility, either the bank requires you to open a savings account which is then linked to your Fixed Deposit account, or if you an existing Fixed Deposit account, you gain access to a savings or current account. Then you need to choose the minimum amount you would like to maintain in your savings account and anything in excess of that automatically gets transferred to your Fixed Deposit. So, you enjoy the interest rate of the Fixed Deposit and in addition, the extra amount swept into your Fixed Deposit account helps you earn additional interest as well.
While some of the banks give you the option to determine the minimum amount that you can transfer from your savings or current account, some others have a fixed amount which would be automatically swept in from your savings account to your Fixed Deposit account.
Who gets to benefit?
The Fixed Deposit sweep-in option is ideal for small businesses and current account holders, as it gives them the option to have some extra cash in their Fixed Deposits which they can withdraw, without having to worry about overdraft or pay any overdraft fee as well.
The sweep-in facility is also beneficial for savings account holders as they get to earn the interest of a Fixed Deposit when the excess cash in their account is transferred to a Fixed Deposit. So in case you were earning only around 3.5% interest on your savings account currently, you can earn up to 8% or more in case you opt for the sweep-in facility.
Eligibility Criteria
In order to avail the benefits of a sweep-in facility in a bank, you need to open a premium amount where the monthly/quarterly minimum balance is between Rs. 25,000 and Rs. 1 lakh. Alternatively, you can also open a Fixed Deposit account of Rs. 25,000 or more and you can avail the sweep-in facility.
You may have saved money all these years by keeping it in a savings account mostly or in a Fixed Deposit, but here’s your chance to earn some more by opting for a sweep-in facility. It’s your turn to earn some more with the Fixed Deposit sweep-in option knocking on your door!