But do take into account if you are better off investing the surplus in other instruments that work better for your overall financial goals. The facility does work well for those who maintain substantial idle balance in their savings account. In some cases, the sweep-in facility might offer only marginally better rates than your savings account. During an account sweep, we can transfer funds from one share to another if certain. The default term of the sweep-in deposit into which your surplus amount is transferred will vary based on what your bank offers, and so will the interest rate. Sweep account transfers are an optional feature for your business accounts. While the sweep-in facility can help you make more off surplus funds, you should consider a few things before opting for it. Even if you dip into the deposit, the balance amount will continue to earn interest at the same rate. Typically, in order to be eligible for it, you have to open an FD of at least ₹25,000 with your bank.Īlternatively, you could open a premium account where the minimum balance on either a monthly or quarterly basis is in the range of ₹25,000 to ₹1 lakh.Īside from a better interest rate, another advantage the sweep-in facility offers is that it forms a separate corpus that you can dip into during emergencies, without touching your regular investments or having to liquidate FDs.Īlso, it has no fees or penalties on withdrawal. The sweep-in facility is not offered to all bank customers. The only difference between a sweep-in facility and a flexi deposit is that in the former, the bank automatically opens the deposit to sweep surplus funds into, while in the latter, you will have to manually start the sweep-in deposit and link it to your savings account for surplus funds to be transferred into it. HDFC Bank offers it as a sweep-in fixed deposit while ICICI Bank calls it a flexi deposit.
Any excess amount in the savings account is automatically transferred to a sweep-in deposit in multiples of ₹1,000. Updated AugWhat Is a Sweep Account A sweep account is a bank or brokerage account that automatically transfers amounts above a certain threshold into a higher interest-earning investment option.
#Sweep account definition plus
For instance, State Bank of India’s savings plus account basically serves the same purpose. Sweep Account means an account with and controlled by Administrative Agent for the benefit of the Lenders into which all Excess Cash Flow shall be transferred in accordance with Section 8.5 (b). Different banks have different names for the facility.
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