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Sweep-In Fixed Deposits: An Investment That Maximises Returns

Due to their stability and guaranteed returns, fixed deposits (FDs) have long been a preferred investment choice for risk-averse people. Traditional fixed deposits, however, don’t always offer the flexibility that today’s investors demand. Sweep-In Fixed Deposits can be used in this situation. Sweep-In FDs, a flexible investment vehicle that maximizes your savings effortlessly with Sweep-In Fixed Deposits. Seamlessly manage your finances while earning competitive interest rates. Growth and liquidity, have grown in popularity as a result of their ability to combine the security of FDs with the ease of savings accounts. This article details Sweep-in Fixed Deposit, including its features, benefits, and operating procedure.

Understanding the Meaning of Sweep-in FD

A fixed deposit’s sweep-in feature enables investors to move extra cash from their bank accounts to their FD accounts, allowing them to earn larger profits. Depending on the bank, the auto sweep-in FD has one to five years terms. The amount investors want to keep in their savings and current accounts can be specified, and any remaining funds will be automatically moved to the sweep-in FD account.

This enables investors to receive greater returns on their excess funds and also permits investors to access their FD in times of need. Without paying any fees or incurring any penalties, investors can withdraw money from their FD to cover their immediate needs. 

Features of A Fixed Deposit Sweep-in Facility

  1. Connecting a Sweep-in FD to a Bank Account 

The current or savings account must be connected to the sweep-in FD account. Additionally, in order to use the auto sweep-in service, all banks mandate that the investor have a bank account with the same institution as the FD. 

  1. Cheap or Minimum Investment 

In multiples of INR 1,000, banks typically move excess funds from savings accounts to sweep-in FDs. However, certain institutions may permit transfers between INR 1 and INR 1,000, depending on the investor’s instructions. 

  1. Tenure 

An auto sweep-in FD might have a period of one to five fiscal years.  

  1. Mortgage Rate 

The interest rate for the sweep-in FD account will be comparable to that of any other FD and will be determined by the FD’s terms. The extra money will make the same interest as the FD on investments made using the sweep-in mechanism.  

  1. Eligibility 

An investor is qualified for a sweep-in facility if they have made a minimum investment of INR 25,000 in the FD. Alternatively, investors can choose the sweep-in facility on their FDs if they have a premium account with a minimum balance between 25,000 and 1,000,000 INR. 

  1. Withdrawals 

Without rupturing the entire FD, the excess invested in the FD using the sweep-in facility may be withdrawn. Investors only lose out on the swept-in money that is withdrawn, not on the interest earned on FDs. 

The Sweep-In Facility: How Does It Work?

Only eligible investors may use the sweep-in facility. A sweep-in feature is available to investors who meet the requirements and have a bank account with the same bank as their FD. Investors must first link their bank account to their FD account, which can be either a savings or a current one. Second, they must establish a cap on the amount that can remain in their bank account at any time. The bank will automatically transfer any extra cash from the bank account, multiples of INR 1,000, to the FD account. 

How Can You Use the FD Facility for Sweep-Ins?

The sweep-in FD facility is available to qualified investors both online and offline. Investors can use the feature online by going to the bank’s website or the net banking service. Alternatively, investors can physically visit the bank’s branch to use the sweep-in FD feature. Investors must adhere to the following procedures, whether they are online or offline:

  • Link the current or savings account to the FD account.
  • Determine the bank account limit in accordance with the needs. The bank automatically transfers extra funds beyond this cap to the FD account.
  • Decide how long the automatic sweep-in facility will be operational. Investors must choose from one of the bank’s fixed tenure choices, which are typically offered. 

Benefits from a Sweep-In FD Investment

  1. Increased FD Rates 

The depositor receives substantial interest from the fixed deposit using the sweep-in option. retaining the flexibility of a bank savings account. Additionally, compared to a savings account, more interest will be earned. Additionally, the fixed deposit’s interest is not lost. Only the amount cleaned or drawn causes them to lose interest. 

  1. Liquidity 

The best type of liquidity is provided via a sweep-in facility. The money is sent from the savings account to the FD account without any noticeable delay.  

  1. Linking Several Accounts 

More than one FD account may be connected by a depositor to a savings account. High liquidity is also ensured by this. 

  1. Flexibility 

Banks allow depositors to select the deposit period, maturity date, and payment method. The balance to be kept in the current or savings account is up to the depositor.   

  1. Zero Extra Fees 

For sweep accounts, there are no additional fees like there would be for a bank-issued overdraft facility. Additionally, there is no fee for early withdrawals. 

What Distinguishes Sweep-In FD from Flexi FD?

Both Sweep-In FD and Flexi FD offer high-interest rates and liquidity. The investor in a Flexi deposit scheme must manually put funds into their fixed deposit account. Additionally, customers can withdraw the money at any time prematurely. 

Any Flexi deposit scheme in the savings or current account is automatically transferred to the fixed deposit when using a Flexi deposit scheme. There are no fines, fees, or penalties for violating the FD. Only the interest earned on the cash taken out of the sweep-in account is lost by the depositors.

The Bottom Line-

Sweep-In Fixed Deposits bridge the gap between the stability of traditional fixed deposits and the flexibility of savings accounts. They offer an efficient way to maximize returns on idle funds without compromising liquidity. For individuals seeking a secure investment option with higher interest rates than regular savings accounts, Sweep-In FDs present a compelling choice. 

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