Whether meeting a medical emergency, getting through job uncertainties, sailing through economic ups and downs, or simply assisting you to realise your goals, investments help you do it all. Hence, you should actively invest. You should also start investing early. This provides a reasonable time to explore various investment options and build a significant corpus.
Fixed Deposit is a go-investment option for innumerable investors. It is a simple investment option that earns you fixed, decent returns. Your investment returns depend on the interest rate on FD. This means higher the interest rate, the better your investment returns. FD interest rates differ for every financial institution. You should explore the market, and compare all options, to find the best interest rate offering.
What is FD sweep-in-facility? How does it work?
The FD sweep-in-facility allows you to keep the excess funds lying ideal in your Savings Account working. You set a threshold limit for your Savings Account balance. As your account balance surpasses the threshold limit, the excess funds are swept to your FD Account. This lets you earn better interest on your money. Here’s a quick example to understand the FD sweep-in-facility better:
Suppose you set your Savings Account threshold limit as Rs. 20,000. Your current Savings Account balance is Rs. 25,000. This indicates your account balance exceeds the threshold limit. The excess funds, i.e., Rs. 5,000 (25,000 – 20,000), are swept into your Fixed Deposit account. Given this, the amount of Rs. 5,000 will earn Fixed Deposit interest rates, translating to better returns for you.
Who should use the FD sweep-in facility?
You should primarily maintain the Savings Account minimum balance requirement to avail of the FD sweep-in-facility. The minimum balance requirement differs from bank to bank. Reach out to your bank to obtain specific details. Note that the FD sweep-in-facility generally works in multiples of Rs. 1,000. The sweep in funds is held as a deposit for a tenure of one to five years. You should consider your financial requirement before availing this facility.
Benefits of FD sweep-in-facility
- Earn better returns – By opting for the FD sweep-in-facility, you can earn a higher interest rate, providing better investment returns overall.
- Enjoy high liquidity – If you want to access the excess funds deposited in your Fixed Deposit account, you make a simple withdrawal and need not break the entire deposit.
- Bear no additional cost – You can use the FD sweep-in facility at zero cost. You can avail this facility by visiting the nearest bank branch or through Online Banking platforms by completing a simple procedure.
