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Know About Sweep in Fixed Deposits and Their Benefits
Reviewed by: Fibe Research Team
- Published on: 4 Dec 2024
Reviewed by: Fibe Research Team
While fixed deposits are a secure option to earn interest, you must pledge a significant amount for sizeable returns. This may restrict access to your savings, which may become a problem in case of emergencies. To solve this issue, banks introduced a sweep-in fixed deposit facility.
With this option, you can earn interest while maintaining a fixed account balance without continuously monitoring your funds.
Read on to learn the meaning of the fixed deposit sweep-in option, how it works, its benefits and more.
It is a type of savings or current account, which is linked to an FD account. Whenever your account balance exceeds the threshold limit, the extra money is redirected towards an FD. This is an automatic feature which helps you earn higher interest on any surplus money you have.
To understand it with an example, assume you open a bank account with a sweep-in facility with an account balance of ₹50,000. If you set the limit or threshold of ₹30,000, the additional ₹20,000 gets redirected into an FD account. Multiple FDs may be created of ₹5,000 each. Now, say you need to pay a bill of ₹35,000, the ₹30,000 account balance is utilised first and the rest comes from the FD account of ₹5,000.
This leaves ₹15,000 in your FD account, which is then transferred to your account since its balance is under the limit you’ve set. This way, you benefit from optimal usage of your funds, access to liquidity and the option to earn more as interest.
Whenever you add money to your bank account, any amount over the threshold that you set will again get deposited into the FD account. The cycle continues until FD matures, based on the tenure you choose. This is usually up to 5 years but you can select a shorter timeline too.
The payout you earn from this option is dependent on the tenure and financial institution as the rates are similar to normal FD rates. The following are some of the interest rates from top banks in India for deposits under ₹3 crores.
| Bank | FD Interest Rate for Regular Citizen (Per Annum) | FD Interest Rate for Senior Citizen (Per Annum) |
|---|---|---|
| Axis Bank | 3% – 7.25% | 3.50% – 7.75% |
| Bank of Baroda | 4.25% – 7.15% | 4.75% – 7.65% |
| Canara Bank | 4% – 7.25% | 4% – 7.75% |
| HDFC Bank | 3% – 7.40% | 3.50% – 7.90% |
| ICICI Bank | 3% – 7.25% | 3.50% – 7.80% |
| IDFC FIRST Bank | 3% – 7.75% | 3.50% – 8.25% |
| IndusInd Bank | 3.50% – 7.75% | 4% – 8.25% |
| Kotak Mahindra Bank | 2.75% – 7.40% | 3.25% – 8.14% |
| Punjab National Bank | 3.50% – 7.25% | 4.30% – 8.05% |
| SBI Bank | 3.50% – 7% | 4% – 7.50% |
| YES Bank | 3.25% – 7.75% | 3.75% – 8.25% |
Disclaimer: These rates are current as of November 2024, are subject to the bank’s policy and can change anytime. Please check the latest rates before you proceed.
By choosing the sweep-in fixed deposit, you can enjoy the following:
If you are choosing a sweep-in fixed deposit, consider the following factors for lucrative terms.
While a sweep-in FD can be ideal to meet evolving financial requirements, sometimes savings may not be enough to bridge urgent financial gaps. During such times, opt for the Fibe Instant Personal Loan of up to ₹5 lakhs.
With Fibe, you can enjoy a streamlined digital application with minimum documentation, easy repayment across up to 36 months and 0 foreclosure charges. Moreover, there are no end-use restrictions that allow you to use it for debt consolidation, bill payment, travel and more. Simply instal our Personal Loan App or visit our website to apply now!
Yes, for most banks, the tenure for this facility ranges from one to three years.
The threshold for minimum balance is subject to the bank’s policy. Usually, this may start at ₹25,000.
No, there are no penalties if you withdraw funds from your sweep-in fixed deposit facility.
