Fixed Deposit Sweep-in

The sweep-in facility permits you to set a limit on savings account and auto transfer the excessive sum from it to a fixed deposit sweep-in account. Most banks allow the limit to be set in multiples of ₹ 1,000 . For availing the sweep-in facility, having a savings account linked with a fixed deposit account is a must. Banks and non-banking financial entities offer the facility of sweep account to eligible account-holders. The tenure ranges anywhere from one year to five years. 

Various banks operate the fixed deposit sweep in accounts in different names. State Bank of India offers sweep in facility where the additional amount is generated in multiples of ₹ 1,000 to the FD accounts. The fixed deposit sweep in HDFC offers provides the same facility and so does ICICI bank. However, the sweep-in facility of ICICI bank has been termed as Flexi deposit. 

The sweep in FD facility can be availed in the two following methods.

• Online: by visiting the net banking page of the respective bank or non-banking financial entity.
• Offline: by visiting the branch of the respective bank or non-banking financial entity.

For availing the facility either online or offline, follow these few steps.

• Link the savings account to the fixed deposit account.
• Set the account limit in accordance with your requirement.
• Select the required tenure offered by the respective bank or non-banking financial entity.
• The excess amount will be auto-generated to the FD account each time it crosses the pre-set account limit.

The functionality of the sweep account is quite simple. All you need to do is link the savings account with the FD account and then set the account limit along with tenure. Each time the sum in the savings account crosses the pre-decided limit, the excessive amount gets transferred to the FD account and interest on the excessive amount is accrued as per the interest rate of the FD.

Here is an illustration for a better understanding of the sweep in facility.

Suppose, you have set the savings account limit for ₹ 30,000 . The current balance in your savings account is ₹ 45,000 . In this scenario, ₹ 15,000 (₹ 45,000 - ₹ 30,000 ) will be generated to your sweep in FD account.

Here are the advantages that come with the sweep-in facility.

• Enjoy seamless liquidity as sweep-in allows automatic transfer from a savings account to FD accounts.
• One saving account can be liked to multiple FD accounts ensuring high liquidity.
• There is no added charge or fee for availing the sweep-in facility.
• The facility keeps an amount separated that can be used during emergencies without having to disrupt FD investments or regular investments.
• No penalty is charged for pre-mature withdrawal.

✅How does a sweep account work?

Account-holders are required to link their savings account to their fixed deposits and set an account limit. Once, the sweep account is created, the excess amount from the account is automatically transferred to the fixed deposit accounts.

✅What is the benefit of sweep account?

Sweep account has following benefits:

• Sweep account generates higher returns since the interest rates on Fixed Deposits are higher than standard savings accounts.
• Sweep accounts ensure high liquidity.
• No additional charge is required to maintain sweep accounts.

✅Are sweep accounts safe?

The sweep accounts are safe as they are operated by the same bank you have invested in. It is advisable to keep track of the sweep accounts to ensure that you do not end up paying huge fees or charges and thus losing a big amount from your corpus.