Auto Sweep, a feature offered by lot of banks to automatically move money from one’s savings account to a fixed deposit if the balance exceeds a certain threshold limit. This is popularly known as the auto sweep facility. Banks have different nomenclatures assigned to this facility.
Modus-Operandi
Banks define a “base limit”, and money up to that limit resides in the form of cash in one’s savings account. Any amount exceeding the base limit will be converted into a Fixed Deposit. The amount upto the base limit will earn normal interest rate applicable for savings account. The amount exceeding the base limit will earn FD returns on that part of the money.
In case money is needed, the money residing in the Fixed Deposits is transferred back into the savings account and one can withdraw the amount accordingly.
Full article @
No comments:
Post a Comment