In today’s fast-paced financial world, smart money management is key. One such powerful tool offered by banks is the Auto Sweep Facility—a feature that allows you to earn higher interest on your savings without losing access to your funds. This facility blends the benefits of a savings account and a fixed deposit (FD), offering convenience, returns, and liquidity all in one.
What Is Auto Sweep?
The Auto Sweep facility works by automatically transferring any surplus amount (above a set threshold) from your savings account into a fixed deposit. These FDs are typically created in small multiples (like ₹1,000 or ₹5,000), and they earn higher interest rates, similar to regular fixed deposits.
When you need funds, and your savings balance is low, the bank automatically breaks these FDs to maintain liquidity, ensuring your transactions go through smoothly.
Key Benefits:
- Higher Earnings: While regular savings accounts earn 2.5%–3.5% interest, swept-in FDs can earn 6% or more, depending on the bank.
- Instant Liquidity: You don’t lose access to your money—it’s automatically pulled back when needed.
- No Manual FD Creation: The process is automatic; you just need to enable the feature once.
- Customizable Limits: You can set the minimum balance limit and FD size as per your convenience.
| Bank Name | Sweep Facility Name |
|---|---|
| SBI | Savings Plus Account |
| HDFC Bank | Sweep-In Fixed Deposit |
| ICICI Bank | Money Multiplier |
| Axis Bank | Encash 24 Flexi Deposit |
| Kotak Mahindra | Sweep-In Facility |
Important Points to Note:
- Some banks may apply penalty charges for premature FD withdrawal.
- Not all savings accounts come with auto sweep—you may need to opt in at your branch or online banking portal.
- Minimum balance and sweep threshold limits vary from bank to bank.
Who Should Use Auto Sweep?
- Working professionals with regular income
- Small business owners managing daily liquidity
- Retirees who want better returns without long lock-in periods
- Anyone looking to maximize interest without sacrificing accessibility
Final Word:
The Auto Sweep Facility is a perfect tool for making your money work smarter. It’s like putting your savings account on autopilot earning better returns while staying fully accessible. If you’re not already using this facility, it’s worth exploring it with your bank.
