Almost every person uses a bank account, especially working people; there is a huge dependence on it. Usually, people open savings or current accounts in banks. People must suffer because banks do not give much return on savings or current accounts. On the other hand, if the same money is made FD in the bank, then the benefit of comparatively higher interest is available. There is a tremendous feature to bridge this gap between savings, current accounts, and FD, which we will tell you in detail here.
For Whom Is A Sweep Beneficial?
First, we learn basic things about savings, current accounts, and FD. The most significant advantage of savings and current accounts is that you can put as much money as you want in it anytime and withdraw it accordingly when needed. FD is troublesome in this case because once the money is parked in it, it gets tied up for some time. On the other hand, according to the returns, the weight of FD becomes more than the savings and current account.
The Gap Between Saving-Current and FD Goes Away.
Sweep in feature mainly works to bridge these two gaps. This feature lets you deposit and withdraw money as needed, ensuring you get FD interest. Let us know how the sweep-in feature works. What are the advantages and disadvantages of sweeping in FD?
Who Is This Feature For?
Let’s understand with an example. Suppose you also do a job and have a business or any other means of earning. Your daily expenses go out of your salary. Your salary comes from savings or a current account. On the other hand, the money from other sources is extra for you, but it is not fixed. Sometimes even 10 thousand comes from there, and sometimes even 50 thousand. There is no fixed time or interval of arrival.
In such a situation, you keep the extra money from other sources in the savings or current account, which you get nominal interest from the bank. People who get surplus income from any source can also use this feature.
How Does The Sweep-in Feature Work?
Sweep-in is a handy thing here. This feature puts the access money in your savings or current account into the FD. For example, suppose that your monthly expenditure is 50 thousand. You place a limit of 50 thousand in your account under the sweep-in feature. Any fund remaining above 50 thousand rupees in your account will become FD. This will benefit you from higher interest on your Access Fund, which will be at par with an average FD.
Will Money Get Stuck In This, Too, Like FD?
The biggest problem in getting FD is that money gets jammed in it. Suppose you get FD for 5 years for 2 lakh rupees, then your 2 lakh rupees got jammed for 5 years. Even if suddenly there is a big need, you cannot withdraw money from the FD because if you break the FD before the maturity of 5 years, there will be a loss. Sweep in feature also removes this problem.
Under this feature, in case of a sudden need, you can withdraw money from this FD for some time and later replenish it. You will not need to pay any fee or penalty for depositing the money back within the stipulated time.
How To Get The Benefit Of Sweep-in?
Now it comes to how to take advantage of this sweep-in feature. You can take advantage of this facility by talking to your bank. All major banks provide this facility to their customers. Contact the bank where you have your savings or current account. The bank will open your sweep in the FD account.
This new sweep in your FD account will be linked to your old savings or current account. You can set a sweep-in limit at your convenience. That’s it; the work is done… By doing this, you will start getting the fun of FD on a normal account.
