An interest rate is fixed for the Savings Account in the private and government-run banks in the country. It ranges from 4 to 6 percent. Generally, most banks have interest rates of 4% on Savings account but some banks also offer interest up to 6% on Savings Amount of more than 1 lakh. Account holders get interest only according to fixed rate of interest. But there is also a facility in banks whereby Savings account holders can take advantage of higher interest than fixed interest on Holders Savings Account.
This feature is a Flexi account. It is also known as the sweep in facility. Most banks are offering such facilities to their savings account holders like SBI, Bank of India, HDFC Bank, Punjab National Bank, ICICI Bank, Axis Bank etc. Let’s tell you what this feature is and how you can take advantage of it-
What is Sweep in Facility?
A maximum deposit is settled for the Savings Account in banks. Many times the customers can also decide maximums. After that, you cannot remain more in your account. In view of this restriction, banks offer facility to convert surplus amounts to FDs. Under this, when the customer’s Savings account exceeds the deposit limit, then the bank automatically convert the additional amount into the FD and at the same rate, interest is paid according to the interest rate fixed for the FD in the bank.
This is called sweep in facility. To avail this, the customer gets the interest on the savings account with this facility, as well as the interest of the FD on the additional amount is also available to the customer. This way the customer has double benefit.
Balance In Limit, FD Will Finish
If your Savings account is more than your deposit limit then your FD will continue to run automatically. At the same time, if the balance of the savings account falls into the limit or decreases, then the FD of the Surplus Amount is exhausted, i.e. the amount comes back to the savings account. It’s called sweep out. Overall, you get the FD interest only on the surplus amount and only till then the savings account remains higher than the balance limit.
More than one FD
There is also a fixed deposit limit for the FD under the sweep in facility. That is, the FD cannot be more than that limit. In this case, you have an option of more than one FD under the sweep in. That means increasing the surplus amount; you can take advantage of more interest by placing more than one FD.
This facility is available in different banks in different names
Some banks link the normal savings account to this facility, but in some it has a separate savings account. SBI is offering customers the benefit of higher interest under Savings Plus account. It can be opened in single or joint. In addition to SBI, Sweep in facility in HDFC, Savings Plus scheme in Bank of India, Money Multiplier Account in ICICI Bank, etc. This facility is presently available in different names.
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