Bank Auto Sweep Services: Every bank provides auto sweep service to its customers on savings and current accounts, but very few people know about it. After enabling this service, you can get interest like FD on savings account.
Bank Auto Sweep Services: While on one hand, bank FD and other savings accounts get strong interest, on the other hand, bank deposits usually get very low interest, but you can get more interest on your savings account or current account like FD. Actually, every bank provides Auto Sweep Service to its customers, about which many people are not even aware. Through this, you can get up to three times more interest on your account. To avail this service, you just have to go to the bank and ask to enable this service. Let’s know about it…
More interest on surplus funds
First of all, let us talk about Auto Sweep service, so let us tell you that this is a facility which helps customers to get more interest on surplus funds. If you enable it, then in case the amount deposited in your savings account exceeds a certain limit or there is surplus fund, it is automatically transferred to fixed deposit i.e. FD. In such a situation, instead of the interest received on the savings account, you get the benefit of the interest rate on bank FD.
This is how the service works
If we understand this Auto Sweep Service provided by every bank in simple language, then if you have enabled the auto sweep service on your savings account, then you can get more interest on the account opened with this service. Actually, when the deposit amount in your savings or current account exceeds the sweep limit, the auto sweep facility gets activated. If we look at the way it works, then in this you have to set a limit in your account and after this your deposit is directly converted into FD.
For example, suppose you have set a limit of Rs 20,000 in your account and deposited Rs 60,000 in this account, then under this service, the amount more than Rs 20,000 i.e. the additional amount of Rs 40,000 will be converted into FD and interest will be given on this amount according to the interest rate (FD Interest Rate) on fixed deposits in the respective bank, whereas on a deposit of Rs 20,000, only the interest fixed on the savings account will be received.
Inspires for more savings
One of the special advantages of this service is that getting higher returns on the money deposited in your bank account motivates the customer to save more. This also increases the regular savings of people. Apart from this, through this facility, you can also track your expenses and set a budget. In Auto Sweep Service, you get rid of the hassle of manually transferring money to FD, because it is an automatic process.
Use like a savings account
Usually, banks give an average interest of 2.5 percent on savings in a bank account. However, it varies from bank to bank. On the other hand, the interest rate on FD is 6.5 to 7 percent on an average. That means you get 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, that is, you can withdraw the money converted into FD whenever you want, whereas you cannot withdraw before the maturity period on fixed deposit.
