Fixed Deposit Sweep-in

Fixed Deposit Sweep-in is a facility provided by various banks and non-banking financial institutions that allows your lender to transfer the excess sum/amount from your savings account to your sweep-in deposit. To reap the benefits of this, one must have a savings account that is linked to a fixed deposit (FD) account. In other words, the depositor fixes an amount slab and when the deposit reaches beyond a limit, the excess amount is transferred to the linked FD account.

The amount which is transferred to the FD account usually gets higher interest as compared to a savings account, due to which this facility is popular amongst the customers. Also, different banks provide this facility in different names. For instance, an SBI saving plus account serves the purpose of a fixed deposit sweep-in. Any excess amount in this saving account is transferred to the linked FD account in multiples of Rs 1,000. Also, the same purpose is served by the Flexi deposit account of ICICI and sweep-in fixed deposit of HDFC.

Who is eligible for availing fixed deposit sweep-in facility ?

All the bank customers are not provided with this facility. The related criteria are variable from one lender to another. In general, one must open a fixed deposit account of a minimum of Rs 25,000 to avail the facility of FD sweep-in, or one may open a premium account where a monthly/quarterly basis minimum balance is in the range of Rs 25,000 – Rs 1,00,000.

How does the Sweep-in Facility Work ?

Some lenders/banks offer you the facility of opening a fixed deposit account linked to your savings account whereas in some cases, it depends on the overdrafts taken by you. Two situations may occur during the tenure. First, your saving accounts may reach a limit excess than the chosen slab. In this case, the excess amount will be transferred from your savings account to the linked FD account (sweep-in facility). Second, you may fail to maintain the minimum balance in the savings account. In this case, the money will be swept from your FD to the savings account. This amount may range from Rs 1 to Rs 1,000, depending on the bank’s rules and regulations.

Advantages of Sweep-in facility

There are numerous advantages of this facility, some are mentioned below:

Flexibility: With this facility, one can draw the exact amount required, instead of an overdraft. Also, it allows flexible options related to deposit, maturity, and payment.

One who runs a small business and has a current account need not opt for an overdraft on the fixed deposit held by them, opting for a sweep account will be more beneficial for them.

Higher FD rates: The amount which is transferred to the FD account usually gets higher interest as compared to a savings account.

No additional charges: There are no additional charges to be paid like in the case of overdraft facilities offered by banks.

Allows multiple FD accounts: You may link multiple FD accounts to your sweep deposit account, varying from one lender to another.

Liquidity: This offers a high level of liquidity option.

Frequently Asked Questions (FAQs) - FD Sweep In

Q. What do you mean by fixed deposit sweep-in?

A. Fixed Deposit Sweep-in is a facility provided by various banks and non-banking financial institutions that allows your lender to transfer the excess sum/amount from your savings account to your sweep-in deposit.

Q. Is sweep-in FD a good option?

A. In a sweep-in facility, the depositor fixes an amount slab and when the deposit reaches beyond a limit, the excess amount is transferred to the linked FD account. The amount which is transferred to the FD account usually gets higher interest as compared to a savings account, due to which this facility is popular amongst the customers and hence a good investment option.

Q. How does a sweep-in account work?

A. A sweep account is a bank or brokerage account which automatically transfers the excess amount in your savings account to your FD account. If you fail to maintain the minimum balance in the savings account, the money will be swept from your FD to the savings account. This amount may range from Rs 1 to Rs 1,000, depending on the lender’s rules and regulations.

Q. What is the benefit of a sweep-in account?

A. The sweep-in facility offers multiple benefits to the customers. This facility allows flexible options related to deposit, maturity, and payment. Also, the amount which is transferred to the FD account usually gets higher interest as compared to a savings account. There are no additional charges to be paid like in the case of overdraft facilities offered by banks.

Q. Which banks offer a sweep-in facility?

A. Top banks providing fixed deposit sweep-in facilities are:

State Bank of India
HDFC bank
ICICI bank
Kotak Mahindra bank
Bank of Baroda

Is the auto sweep option available in SBI?

Yes, SBI offers the auto sweep facility to its customers on standard terms.