This how you can increase interest on savings A C #shorts #finance
Written by ABC AUDIO on July 10, 2022
A lot of us have spare cash in our accounts kept as emergency money or we haven’t decided where to invest it for the long run yet. This is where the “sweep-in” facility helps for larger sums lying idle. It allows your bank to transfer any sum in excess of the amount stipulated by you from your savings account to a sweep-in deposit. The tenure of the deposit varies from bank to bank, some banks take weighted average days and hence the interest rates also vary accordingly. But by and large, the amount transferred is likely to earn you a higher rate than your savings account. Then if during emergency, you do require more money the money will be automatically deducted from the FD (Sweep out facility)
Things to check before you avail the sweep in and sweep out facility:
(Ask your RM or go to your bank, online information on this is tricky to understand)
1) Eligibility – Not all banks offer this services to all customers for all types of accounts.
2) Withdrawal fee – There shouldn’t be a premature withdrawal fee incase money is taken from FD when there is a shortfall in the main account. Ask explicitly that when you withdraw if there are any charges on that, sometimes they are not outrightly stated and deducted from the interest credited.
3) Tenure of FD – Is it weighted average days of the money in FD or is it a fixed tenure. Understand the details here.
4) Other Details – You might need to create a FD of nominal amount before you start this facility, check how much is that amount, check how much is the minimum balance you need to take into your account, at what amount the excess money will automatically transfer to the FD.
The facility does work well for those who maintain substantial idle balance in their savings/current account upwards of 3 lakhs or so. But do take into account if you are better off investing the surplus in other instruments that work better for your overall financial goals.
#anushkarathod #finance #personalfinance #interest #bank
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