While a savings account serves as a hub for daily transactions, the returns it offers may not be the most lucrative.
However, with the Auto Sweep Facility, you can transform your savings account into a dynamic tool for earning FD interest on surplus funds without compromising liquidity.
Understanding Auto Sweep Facility:
Auto Sweep Facility is a feature provided by banks on savings or current accounts, offering a dual benefit.
It automatically converts excess funds in the account beyond a set limit into a fixed deposit (FD), ensuring you earn higher FD interest.
The surplus funds are readily available in your savings account, offering flexibility and liquidity.
Benefits of Auto Sweep Facility:
- Enhanced Returns: While savings account interest ranges from 2.5% to 4%, the Auto Sweep Facility allows you to earn FD interest, potentially reaching 5 to 7%. This means higher returns on your idle funds.
- Liquidity without Penalties: Unlike traditional FDs, funds swept into an FD through this facility can be withdrawn without penalties or restrictions, providing unmatched liquidity.
- Automated Management: The process is automated, requiring no manual intervention. Excess funds are seamlessly shifted to FDs and back to the savings account based on pre-set limits.
How to Activate Auto Sweep Facility (SBI Example):
For SBI customers, activating this feature is a straightforward process through Internet Banking or the YONO app.
Through Internet Banking:
- Log in to Internet Banking and navigate to the Fixed Deposit option in the menu.
- Click on “More” and access the Auto Sweep Facility page.
- Choose the account, set the limit, and select the deposit time frame.
- Confirm and submit, entering OTP or transaction PIN/password.
- The bank will activate the service in the next working days.
Through YONO App:
- Open the “e-fixed deposit” option in the YONO app.
- Select “Multi Option Deposit” and choose the account for enabling the feature.
- Submit the request, and enter OTP or transaction PIN/password.
- The bank will complete the process, activating the feature in your account.