Know About Sweep in Fixed Deposits and Their Benefits

Updated on: 4 Dec 2024

While fixed deposits are a secure option to earn interest, you must pledge a significant amount for sizeable returns. This may restrict access to your savings, which may become a problem in case of emergencies. To solve this issue, banks introduced a sweep-in fixed deposit facility.

With this option, you can earn interest while maintaining a fixed account balance without continuously monitoring your funds.
Read on to learn the meaning of the fixed deposit sweep-in option, how it works, its benefits and more.

What is Sweep-in Fixed Deposit?

It is a type of savings or current account, which is linked to an FD account. Whenever your account balance exceeds the threshold limit, the extra money is redirected towards an FD. This is an automatic feature which helps you earn higher interest on any surplus money you have.

To understand it with an example, assume you open a bank account with a sweep-in facility with an account balance of ₹50,000. If you set the limit or threshold of ₹30,000, the additional ₹20,000 gets redirected into an FD account. Multiple FDs may be created of ₹5,000 each. Now, say you need to pay a bill of ₹35,000, the ₹30,000 account balance is utilised first and the rest comes from the FD account of ₹5,000.

This leaves ₹15,000 in your FD account, which is then transferred to your account since its balance is under the limit you’ve set. This way, you benefit from optimal usage of your funds, access to liquidity and the option to earn more as interest.

Whenever you add money to your bank account, any amount over the threshold that you set will again get deposited into the FD account. The cycle continues until FD matures, based on the tenure you choose. This is usually up to 5 years but you can select a shorter timeline too.

Sweep-in FD Interest Rate

The payout you earn from this option is dependent on the tenure and financial institution as the rates are similar to normal FD rates. The following are some of the interest rates from top banks in India for deposits under ₹3 crores.

Bank	FD Interest Rate for Regular Citizen (Per Annum)	FD Interest Rate for Senior Citizen (Per Annum)
Axis Bank	3% – 7.25%	3.50% – 7.75%
Bank of Baroda	4.25% – 7.15%	4.75% – 7.65%
Canara Bank	4% – 7.25%	4% – 7.75%
HDFC Bank	3% – 7.40%	3.50% – 7.90%
ICICI Bank	3% – 7.25%	3.50% – 7.80%
IDFC FIRST Bank	3% – 7.75%	3.50% – 8.25%
IndusInd Bank	3.50% – 7.75%	4% – 8.25%
Kotak Mahindra Bank	2.75% – 7.40%	3.25% – 8.14%
Punjab National Bank	3.50% – 7.25%	4.30% – 8.05%
SBI Bank	3.50% – 7%	4% – 7.50%
YES Bank	3.25% – 7.75%	3.75% – 8.25%

Disclaimer: These rates are current as of November 2024, are subject to the bank’s policy and can change anytime. Please check the latest rates before you proceed.

Benefits of Sweep-in Facility

By choosing the sweep-in fixed deposit, you can enjoy the following:

Achieve an easy balance between your current financial needs and investment goals
Set the threshold limit based on your financial obligations
Manage financial emergencies without worry
Get interest rates are competitive and better than savings account interest rates
Auto renewal facility so that you can continue your investment without the need for constant monitoring

Things to Consider

If you are choosing a sweep-in fixed deposit, consider the following factors for lucrative terms.

Compare the Interest Rate: Compare and choose a bank that offers the highest interest rate for the best returns
Auto-Renewal Facility: This option allows you to renew FD without filing for paperwork or any delays, so you don’t miss out on any interest-earning opportunity
Easy Application Process: This is a complimentary facility, so you don’t have to apply for it separately
Minimum Limit: Choose the threshold limit that fits your banking needs and expenses
Withdrawal Options: Some banks also have sweep-out frequencies that determine how many times you can withdraw your money, so check these before you proceed

While a sweep-in FD can be ideal to meet evolving financial requirements, sometimes savings may not be enough to bridge urgent financial gaps. During such times, opt for the Fibe Instant Personal Loan of up to ₹5 lakhs.

With Fibe, you can enjoy a streamlined digital application with minimum documentation, easy repayment across up to 36 months and 0 foreclosure charges. Moreover, there are no end-use restrictions that allow you to use it for debt consolidation, bill payment, travel and more. Simply instal our Personal Loan App or visit our website to apply now!