If you have an amount of lakhs in your savings account, then by keeping this amount in the savings account for a long time, you are causing loss to yourself. It is better that you start the auto sweep facility in your account. With this, you will start getting FD interest on the savings account itself.

Most people keep their hard-earned money safe in the savings account. But there is not much benefit in keeping a big amount in the savings account because you do not get much interest on it. In most savings amounts, the interest is only between 2.5% to 4%. It is better to invest this amount somewhere. But after investing, you cannot withdraw money from that account in the middle because there is a lock-in period. In such a situation, it is better that you go to the bank and activate the Auto Sweep Facility. This is a great facility that turns your normal savings account into a smart, high-yielding account. Know its benefits

What is this Auto Sweep Facility?

Auto-sweep is a banking facility that links your savings account to your fixed deposit (FD) account. While activating this facility, you set a threshold limit, say Rs 30,000. Now as soon as the amount in your savings account exceeds this limit, the extra money will automatically be transferred to an FD. On this FD, you will get more FD interest than a savings account. At the same time, when you need money and you withdraw money from your account, due to which the balance falls below the set limit, then the same amount will be automatically withdrawn from the FD and returned to your savings account. In this way, you will not have any shortage of money and you will also keep getting more interest on your extra amount.

4 big benefits of auto-sweep facility

Higher Returns

This is the biggest benefit. While savings accounts get 2.5% to 4% interest, you can get 6% to 7.5% interest on FDs linked to auto-sweep facility. This interest is almost double compared to savings accounts. This increases your savings rapidly.

High Liquidity

There is a penalty for breaking a normal FD before time. But this is not the case with auto-sweep. This facility gives you FD interest as well as liquidity like a savings account. You can withdraw money whenever you want through ATM, cheque or online transaction. The money will automatically come to your account from the linked FD.

Convenient and automated

Once you activate this facility, you do not have to do anything. The bank's system automatically puts the extra money in the FD and withdraws it when needed. You get rid of the hassle of opening or breaking FD again and again.

Both benefits in a single account

You get the benefits of savings account and FD in a single account. You do not need to open or manage a separate FD account.

How to activate auto-sweep facility?

Banks provide different means to provide this service to their customers. Here we are telling the way to activate this facility for SBI customers. SBI customers can activate it through internet banking and YONO app. Know its process-

- Sign in to internet banking and go to the fixed deposit option from the menu.

- Clicking on the 'More' option from the drop down menu will open the auto sweep facility page. Click on its link here.

- After this, choose the account in which you want this feature and fix your amount. Here you will also have to choose the time frame of the deposit.

- After this, click on OK and submit it. You will have to enter OTP here or transaction PIN/password. Your bank will enable this service in the next few working days.

How to enable this feature on YONO app

- Go to the mobile app and open the e-fixed deposit option from the menu.

- Here choose the multi option deposit option from the menu and select the account in which you want to enable the feature.

- Submit. After this you will be asked to enter OTP or transaction PIN/password. This feature will be enabled in your account once the process is completed by the bank.

FAQs

1. Is there any charge for auto-sweep facility?

Usually banks do not charge any additional fee for this facility. It is a value-added service that comes with your account.

2. What is the minimum threshold limit in auto-sweep?

This can vary from bank to bank. Usually it ranges from Rs 10,000 to Rs 1,00,000. You can choose it as per your convenience.

3. Is TDS deducted on FD made through auto-sweep?

Yes, if your interest income from FD in a financial year is more than Rs 40,000 (Rs 1,00,000 for senior citizens), then the bank will deduct TDS as per the rules.

4. Can I stop this facility anytime?

Yes, you can deactivate this facility whenever you want by visiting the bank or through net banking.

5. If my FD is broken, will I get less interest?

When the money comes back from the FD to your savings account, you get interest according to the interest rate applicable for the period the money remained in the FD. There is usually no penalty for this.