On the one hand, there is huge interest in other savings accounts, including bank FD; On the other hand, very low interest is generally given on bank deposits, but you can earn more interest on your savings account or current account like FD. In fact, all banks offer their customers the automatic sweep service, something that many people do not even know about. Through this you can get up to three times more interest on your account. To benefit from this service, you only have to go to the bank and request authorization for this service. Let us know about it…
Plus interest on excess funds
First of all, let’s talk about Auto Sweep service, then let us tell you that it is a facility that helps customers to earn more interest on surplus funds. If you enable it, in case the amount deposited in your savings account exceeds a certain limit or there are surplus funds, it is automatically transferred to fixed deposit i.e. FD. In such a situation, you will get the benefit of interest rate on bank FD instead of interest on savings account.
This is how the service works
By understanding this Auto Sweep Service provided by all banks in simple language, if you have enabled Auto Sweep Service in your savings account, you can earn more interest on the account opened with this service. Actually, when the amount deposited in your checking or savings account crosses the sweep limit, the auto sweep feature is activated. If you look at the way it works, you have to set a limit on your account and then your deposit is directly converted into FD.
For example, suppose you have set a limit of Rs 20,000 in your account and have deposited Rs 60,000 in this account, then under this facility the amount above Rs 20,000 i.e. additional amount of Rs 40,000 , it becomes FD and interest will be given to you. on this amount as per the interest rate on fixed deposits in the concerned bank (FD interest rate), while On a deposit of Rs 20,000, only the interest fixed on the savings account will be available.
Inspires you to save more
A special advantage of this service is that obtaining higher returns on the money deposited in their bank account motivates the customer to save more. This also increases people’s regular savings. Apart from this, through this feature you can also track your expenses and set a budget. At Auto Sweep Service, you get rid of the hassle of manually transferring money to FD because it is an automatic process.
Used as a savings account.
Generally, banks give an average interest of 2.5 percent on savings in a bank account. However, this varies from bank to bank. The average interest rate on FDs is 6.5 to 7 per cent. That means the benefit of up to three times more interest on the amount deposited in the account. But you can treat it like a savings account, i.e. you can withdraw the money converted into FD whenever you want, whereas in case of fixed deposits, you cannot withdraw it before the maturity period ends.
