State Bank of India (SBI) has changed the rules for its auto sweep service. Earlier, the minimum limit for auto sweep was ₹35,000, but now it has been increased to ₹50,000.
This means whenever your savings account balance goes above ₹50,000, the extra money will automatically convert into a fixed deposit (called MOD) and earn you higher interest.
What is SBI’s MOD Scheme?
The MOD (Multi Option Deposit) scheme allows the bank to move extra money from your savings account into a fixed deposit.
This gives you more interest than a savings account.
If your savings account balance falls short, money from MOD is automatically transferred back (called reverse sweep).
The money can be partly or fully withdrawn from MOD whenever needed.
New Auto Sweep Limit
Earlier: Money above ₹35,000 was moved into MOD.
Now: Money will be transferred only if the balance crosses ₹50,000.
Interest and Withdrawal Rules
Higher interest than savings accounts.
Interest is compounded quarterly and paid accordingly.
If you break (withdraw from) MOD, you get interest for the period completed, but a small penalty may apply.
Interest on the remaining deposit continues as usual.
TDS (Tax Deduction at Source) applies on the interest earned.
Benefits for Senior Citizens
SBI gives extra interest on MOD to senior citizens.
However, super senior citizens (above 80 years) do not get any additional interest benefit.
Reverse Sweep Process
Money is transferred back to the savings account in units of ₹5,000.
If the MOD balance falls below ₹15,000, the whole amount is moved back.
Withdrawal is done on a LIFO basis (Last In First Out), meaning the latest MOD is withdrawn first.
Customers can also choose FIFO (First In First Out) if they prefer.
Maturity of MOD
Once the deposit matures, the entire amount with interest is automatically credited back to the savings account.
Why is MOD Scheme Useful?
Helps you earn higher interest without any extra effort.
Money is instantly available whenever required.
Saves you from the hassle of opening separate fixed deposits.
