Key Takeaway
Sweep-in FDs automatically move excess savings account balance into FDs, earning 6.5–7.5% vs 3–4% in savings. When you need funds, the FD is auto-broken (LIFO) , combining liquidity with higher returns.
Sweep-in Interest Breakdown:
- Savings balance kept normal: ₹25,000.
- Balance swept into linked high-yield FD: ₹75,000.
- Total interest with Sweep facility activated: ₹1,515.
- Standard interest (without sweep): ₹739.
- Net extra returns gained: ₹776.
Advertisement
Frequently Asked Questions
What is a sweep-in fixed deposit?
A sweep-in FD links your savings account to a fixed deposit. Balance exceeding a set limit is automatically converted into an FD to earn higher interest.
Is sweep-in money fully liquid?
Yes. If your savings balance falls below zero or you swipe your card, the bank automatically breaks a portion of the FD to cover the deficit with zero manual effort.
Do sweep-in FDs charge exit penalties?
Most banks do not charge exit penalties for sweep-in withdrawals, but interest is only paid for the exact days the swept balance remained in the FD.
Get Smarter With Money Every Week
Join 10,000+ readers. One actionable money tip delivered free every Sunday.
Was this calculator helpful?
Advertisement