what is the meaning of fixed deposit sweep in?
I was really confused about sweep in thing when I first tried opening the FD account. I asked the bank official what is fixed deposit sweep in? They were kind enough to help me understand it.
To put it simply, a fixed deposit sweep in is a banking facility where earning potential of FDs is combined with liquidity of a savings or current account. Here you FD is linked to your savings or current account. When you set a threshold limit in your linked account, any amount that surpasses this limit is automatically transferred or swept into your FD. This helps in earning higher interest than a standard savings account.
You have to decide the minimum balance of your savings/current account. If funds in your account exceed the limit, your balance is shifted into your FD in multiples specified by the bank.
That’s not it, if you need extra funds in your savings account, the bank will automatically transfer the required amount back from your FD.
Sweep in FD is a good way to earn high interest, get easy liquidity options and there are no penalties on partial withdrawals.