What Is A Facility For Auto Sweeps? How To Increase Savings Account Returns

Nowadays, almost everyone has a savings account with a bank, earning interest at a rate ranging from 2.50% to 5.50%, depending on the rules of the bank. The majority of people in India select Fixed Deposits (FDs) because they are a secure investment choice, give decent returns, and are simple to open. Many people are unaware of investments in banking products like debentures, shares, or gold.

However, there’s another comparable choice that makes your money work better and adds it to your savings account. This is a kind of automatic sweep feature that makes better use of the money in your savings account. The auto sweep service combines a fixed deposit (FD) with a savings account, meaning that a financial limit is established and your savings account is connected to your FD account.

The extra cash is immediately transferred to your FD account if your credit limit is exceeded. This enables you to generate interest at a rate that is greater than the standard interest rate on your savings account. The amount you may maintain in your savings account must not exceed a certain threshold limit, which you must specify. It is thus immediately sent to your FD account once your amount surpasses. Technically, this procedure is known as sweep-in.

For instance, the minimum balance needed for your savings account with the auto sweep feature is Rs 5,000. The threshold limit is set at Rs 10,000, and you have deposited Rs 30,000. In this scenario, the extra money, or Rs 20,000, would be paid automatically to your FD account. This will increase the interest rates you get on both accounts. Although it is advised not to make frequent transactions if your savings account has an auto sweep feature.

You don’t have to dissolve your FD in order to remove funds from your account that have been moved using the auto sweep option. The sum will be automatically moved from the FD account to your savings account whenever it reaches the lower limit. The auto sweep feature, on the other hand, offers the advantages of liquidity and the freedom to choose your EMI’s duration. Account users have access to auto sweep features via banks including the Bank of Maharashtra, the Bank of India, ICICI Bank, and others.