This facility is called Swipe in facility and many banks offer it. Some terms and conditions are also applicable with this facility.
There is a fixed rate of interest in banks for saving accounts. Currently, this interest rate is between 3 to 6 percent. Do you know that you can get more interest on your savings account than the fixed interest rate. Yes, banks also provide this facility.
This facility is called Swipe in facility and many banks offer it. Among the banks offering this facility are many banks like SBI, HDFC, Bank of India, Punjab National Bank, ICICI.
What is a sweep in facility?
Under the sweep in facility, when the savings account deposit exceeds a certain limit, the surplus amount is converted into FD and at the amount of this FD, the bank gets interest at the fixed rate of interest for FD.
Savings account holders have double benefit from this scheme. First- the customer gets fixed interest on the deposit of the budget account. With this, fixed interest for FD is converted on sweep-in.
What if the balance falls below the fixed limit
The FD made under the sweep in facility will last as long as the deposit in the savings account will be more than the fixed limit.
If the balance of the savings account falls within the stipulated limit, then the FD created under the sweep in will end.
The money will come back to the savings account and interest on the savings account will start accruing on it again. This is called sweep out.
More than one FD
One advantage of the Swipe in facility is that you can get more than two FDs in it.
There is also a fixed deposit limit for FDs made under this scheme.
No more money can go in that FD than that limit.
As the surplus amount increases, you can keep more than one FD and can enjoy more interest.
Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.