Auto Sweep Facility: Banks List, How to Activate & Benefits?

If you often leave extra money sitting in your savings account, you may be losing out on better returns. That’s where the automatic sweep feature comes in. Many people search for what is auto sweep facility because it promises higher interest without you having to lock your money away.

You can think of it as a smart upgrade to your regular savings account. Whenever your balance crosses a limit chosen by you, the bank quietly moves the extra amount into a small fixed deposit. Your money starts earning a higher FD rate while you still enjoy the freedom to withdraw anytime. It’s simple, effortless and a great way to make your idle funds work harder.

What is an Auto Sweep Facility?

An auto sweep facility is a smart banking feature that helps you earn more from your savings without changing the way you use your account. It works by connecting your savings account to a small FD in the background. When your balance goes beyond a limit you set, the extra amount is automatically shifted into this FD.

Two simple actions make the feature work:

• Sweep-in: The bank moves your surplus balance into the FD so it can earn a higher interest rate.
• Sweep-out: If you need to withdraw more money than what is in your savings balance, the bank automatically pulls the required amount back from the FD.

This way, you enjoy better returns on your idle funds while still having complete access to your money whenever you need it.

How Does the Automatic Sweep Facility Work?

Here’s how the auto-sweep facility works:

• Set a threshold limit: You choose a minimum balance for your own account.
• Sweep-in happens automatically: When your balance crosses this limit, the extra money is moved into an FD. This FD earns a higher interest rate than your savings account.
• Full liquidity remains: If you withdraw an amount that is higher than your savings balance, the bank automatically uses sweep-out to break the FD partially and give you the money.
• Interest keeps growing: Only the required portion is broken, so the remaining FD keeps earning interest.

Here’s an example:

If your threshold is ₹25,000 and your balance comes to ₹40,000, then the excess ₹15,000 will be moved to an FD automatically. So if the FD interest is 6 percent, you earn higher returns on this ₹15,000 instead of the usual savings rate.

How to Activate Auto Sweep Facility?

Here’s an easy step-by-step guide to activate your auto sweep facility:

Step 1: Log in to your bank’s net banking or mobile app
Step 2: Look for the ‘Deposits’ or ‘Sweep Facility’ option in the menu
Step 3: Choose the savings account you want to link
Step 4: Enter basic details like your threshold amount, sweep cycle and start date
Step 5: Verify the request using the OTP sent to your registered mobile number
Step 6: Submit the request. You’ll receive a confirmation once the facility is activated

Also Read: Best Banks For Savings Accounts In India

Pros and Cons of the Auto Sweep Facility

Here are some of the pros and cons of availing of the facility of auto sweep in a savings account:

Pros

Pros	How It Helps
Higher returns	Extra funds earn FD-like interest instead of the lower savings rate
Easy liquidity	You can withdraw anytime. The bank automatically uses sweep-out if needed
Flexibility	You can choose your own threshold limit and FD tenure
Better money management	Idle funds get utilised automatically without any manual effort

Cons

Cons	What to Know
Possible charges	Some banks may apply a fee for activating or using the sweep facility
Premature FD penalty	Breaking the FD early may lead to a small penalty deduction

Auto Sweep Facility Banks List

Many financial institutions in India offer this feature on savings accounts. Here are some of the leading banks allowing you to opt for the auto-sweep facility:

• Bank of India
• State Bank of India 
• HDFC Bank 
• ICICI Bank 
• Kotak Mahindra Bank
• Bank of Baroda
• IDFC First Bank

You can visit your bank’s branch or contact customer support to know if the facility is offered for your savings account. You can also visit the bank’s website and log in to your account.

The money lying in an auto sweep account helps you create a corpus for emergency expenses or long-term goals. However, if you ever fall short on cash for your lifestyle needs, you can also rely on Fibe’s quick and hassle-free Instant Cash Loan. 

You can get up to ₹5 lakhs and enjoy instant disbursal with affordable interest rates and flexible tenures going up to 36 months. Download the Personal Loan App or log in to our website to secure a loan with an easy and simple application process.

FAQs on Automatic Sweep Facility

Is auto-sweep good or bad?

The auto sweep in a savings account is ideal if you often have a large balance in your account that you don’t need to access frequently. 

What is the minimum balance for an auto-sweep account?

The minimum balance in an auto-sweep savings account depends on the bank and your account type. 

Can I withdraw money from the auto-sweep account?

Yes, an auto sweep account offers the same level of liquidity as a regular savings account, which means you can easily withdraw the excess money whenever you need.

Do sweep accounts pay interest?

Yes, the automatic sweep facility offers interest on the savings account as well as the FD account created after the sweep-in. Moreover, the auto sweep account interest rate is generally higher than that of a regular savings account.