What is auto-sweep facility in savings bank account?

Are you busy and not having enough time to effectively utilize the idle money in the savings bank account?. Then, this article would provide you a useful tips to utilize the auto-sweep facility available  in most of the banks to maximize the returns for your idle money. This article explains about the auto-sweep facility and pros and cons of that feature. This would be perfect for the person with busy schedule and not able use the fund sitting in the savings bank account. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

What is auto-sweep facility in savings bank account?

Auto sweep facility combines the benefit of savings bank account and fixed deposit account. It is normal case where most of the people have huge amount in the savings bank account for the long time which earns meagerly 4% p.a. The intention or benefit of this facility is to attain the high degree of liquidity in your savings bank account with maximum returns.

This facility has the threshold amount of certain limit, if you have the excess of the threshold  amount in the account, this facility automatically move the excess amount into the fixed deposit.  It earns the highest interest rates then in the savings bank account. Auto Sweep is the common term used to mention this scheme, but different banks has different scheme which you can read out in the next section.

What is Super Saver and Sweep-In Facility by HDFC Bank?

How it works?

If you have a savings bank account and the cut-off amount for the auto sweep is set as Rs.25000, when you have excess amount in the account, it will be moved to the fixed deposit with the higher interest rates. The feature of this facility is different from each bank and cut-off amount also will be different. There may be minimum sweep amount will be specified in the some banks.  The following are the steps explaining how it works:

  1. You have savings or current account.
  2. This account must be enabled with the auto sweep facility. Note that the name of the scheme is different for each bank. The following are the list of scheme names for few banks:
    1. Axis Bank – Encash 24
    2. Axis Bank – Encash 24
    3. Union Bank – Union Flexi Deposit
    4. HDFC Bank – Super Saver Facility
    5. Bank of India – BOI Savings Plus Scheme
    6. Oriental Bank of Commerce – Flexi Fixed Deposit Scheme
    7. State Bank of India – Multi Option Deposit Scheme
    8. Allahabad Bank – Flexi-fix Deposit
    9. Bank of Maharashtra – Mixie Deposit Scheme
    10. Corporation Bank – Money Flex
    11. United Bank of India – United Bonanza Savings Scheme
    12. IDBI Bank – Sweep-in Savings Account
  3. Each bank has their won threshold amount to enable the auto sweep facility.
  4. The tenure of the fixed deposit booked would be different from each bank. For example, SBI allows the fixed deposit from 1-5 years where as AXIS bank allows maximum of 181 days.
  5. If the savings account lacks of the minimum balance after withdrawing the money or lack of money to clear any cheques, the fixed deposit will be broken and move the fund to savings bank.

Advantages of auto sweep facility

  • You need not worry on idle cash on the savings bank account.
  • Amount in savings bank will be effectively utilized to earn more income.
  • Banks automatically park the amount to high interest rates.
  • This would be very good option for those who do very less transaction in the savings bank and have the excess amount.

Dis Advantages of auto sweep facility

  • There may be service charges applicable to the transactions. Before opening the auto sweep facility, read the instructions carefully.
  • This facility will not be suitable for those who do lot of transactions in the savings account.
  • When you have multiple FDs created, the order of breaking the FDs might affect the returns. Few banks first break the low earning FDs then will move to the high interest rates.

Summary

Auto Sweep facility is must have for the account holders who have the excess amount in the savings bank account for long time. It is observed that huge number of professionals who are salaried get their monthly salary on their savings bank account. But, they left un-utilized  for the months which kept idle. This facility will benefit you lot to earn higher interest rates. If you have any doubts, please post it in the comments section.

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Comments

  1. says

    Please specify that if my amount transferred in various times in super saver account,then what type of interest rates will be decided by the bank?

  2. GS PRASAD says

    First time I entered your site and very useful information I required on auto-sweep bank a/c and its advantages over conventional SB a/c. Thank you very much

  3. Gourab says

    Hi Krishna/Any learned person,
    when I will try to withdraw a amount from ATM higher than cut off amount(amount lying in savings ac), Can I perform that transaction..?
    Or I need to visit the bank & follow the traditional procedure to encash the money deposited as “Fixed” amount…

    Kindly let me know…..

  4. harpreet singh says

    i want to open auto sweep account either in hdfc or sbi bank.
    which is better in term of
    1.low threshold amount
    2.penality if any
    3. any other benifit
    i will be thankful if u guide me.
    thanx.

  5. raju says

    sir,
    how the intrest is calculated if fd is broken in auto sweep a/c ?
    how do we know the amount of intrest got for broken fd?

  6. Rakesh Mishra says

    your explanation is so clear that even a normal person could understand. Thanks for posting such useful post. I have first visited your site and bookmarked it. Like it very much. . . . Thanks again.

  7. Vishal patel says

    Hello sir, i opened csp account in sbi , as usual dey opened silver? Bt when i came to knw that i suffice d criteria of gold, i askd them they said they hv converted it to gold, bt still i have silver debit card, so would it work as gold? And in auto sweep ,in csp, what if i want to withdraw frm atm d amount which is nt available bt it is in fd amount? Lets say i hv 10k in acc. And 30k in fd part, and want to withdraw 20k through atm??

  8. natarajan says

    Sir, You have clearly mentioned about the auto transfer of fund required in the savings account from fd a/c. what is the rate of interest,is there any penalty for premature transfer. on the other hand after the sweep transfer transfer again my sb a/c shows excess amount will it transfer to auto sweep a/c and what is the period of this fd.
    pl. reply by mail so that I can open a sweep a/c
    natarajan

  9. Sunny says

    Hi Krishna,
    Great article. I wanted to know if tax is deducted by the bank on the interest earned on the sweep deposits. Usually banks deduct interest earned on fixed deposits, so wanted to know if taxation is the same for sweep in fixed deposits also.

    Thanks,
    Sunnyt

  10. Sunny says

    Hi Krishna,
    Great article. I wanted to know if tax is deducted by the bank on the interest earned on the sweep deposits. Usually banks deduct interest earned on fixed deposits, so wanted to know if taxation is the same for sweep in fixed deposits also.

    Thanks,
    Sunny

  11. swarup says

    what is the minimum balance for salary a/c with multy option deposit scheme.is there any penalty if minimum level dose not maintained in the a/c.if so what is the penalized amount

  12. Monaj Saha says

    i want to open auto sweep account either in hdfc,axix or sbi bank.
    which is better in term of
    1.low threshold amount
    2.penality if any
    3. any other benifit
    i will be thankful if u guide me.

    when I will try to withdraw a amount from ATM higher than cut off amount(amount lying in savings ac), Can I perform that transaction..?
    Or I need to visit the bank & follow the traditional procedure to encash the money deposited as “Fixed” amount…
    thanx.

    Reply

  13. Mohan says

    can we withdraw the amount from auto sweep FD a/c before maturity? is there any extra charges applicable in this case?

    • says

      Hi Mohan,

      Sweep in facility is provided by all the banks with different features. The rules may vary for each bank. I would suggest you to talk to the bank customer service to know more details.

      Thank you for reading my blog!!.

      Thanks,
      Krishna

  14. rajarshi says

    in a Super Savings A/c.at BOB, more than Rs.20000/- transfer to fdr for 181 days. now my question is if i have 60000/-.on 14.01.13 rs.40000/- trf to fdr and on 16.01.13 i withdraw rs.30000/- then the fdr automatically closed and at the end of the day again rs.10000/- will be moved as FDR. Now what will be the rate of interest of Rs40000/- which was moved on 14.01.13 & closed on 16.01.13.

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