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Sweep-in is a facility provided by banking institutions, whereby a balance that is greater than the stipulated amount (threshold limit) is transferred to a fixed deposit. It is linked to a savings account or current account, depending on which account the individual holds with the bank. Some institutions refer to the sweep-facility as money multiplier or 2-in-1 account. It is important to note that sweep-in fixed deposits maintain the liquidity of a savings account. The yield on sweep-in fixed deposits is higher when compared with that of a savings account. To open a sweep-in FD, one can simply visit a bank branch or place a request through the company’s website (net banking).
Here is a look at some of the features and benefits of the sweep-in facility:
Following are some important points to keep in mind before availing the sweep-in facility:
An individual who wants to avail this facility must choose a savings account option that comes with the auto sweep-in facility. Once the balance in the savings account goes beyond the threshold limit, the money will be automatically transferred to a fixed deposit. It is important to note that the manner in which a sweep-in facility works will differ from bank to bank. Individuals are therefore advised to discuss the various terms and conditions with the respective banker before opting for this facility. Sweep-in fixed deposits are best-suited for risk-averse investors who are looking for higher interest, when compared with savings deposit account.
What is sweep-out facility?
Under the sweep-out facility, when the savings account balance goes beyond a pre-decided threshold, the money (the amount above the threshold) is moved to a fixed deposit account. It offers a higher yield compared to a savings account, and at the same time, maintains the liquidity of a savings deposit.
How does sweep-in facility work in HDFC?
If one has opted for the sweep-in facility of HDFC Bank, the deposits get broken down in units of Re. 1, thereby minimizing interest loss. The sweep-in of funds from fixed deposits to saving/ current account are triggered on Last in First Out basis.
How to open sweep-in fixed deposit in HDFC?
To apply for the sweep-in facility with HDFC Bank, individuals can either place a request online through the bank’s website or head to the nearest branch office. In case one opts for the online route, he or she would have to log in to the net banking account of HDFC Bank and choose the option ‘Fixed Deposit Sweep-in’ under ‘Fixed Deposits’.