Everybody goes to the bank. But there are many people who may not know about all the schemes and rules of the bank. One such thing will be discussed in today’s article. While other savings accounts, including bank FDs, earn strong interest, bank deposits usually earn very low interest, but you can get more interest on your savings account or current account like FD. Actually, every bank offers ‘Auto Sweep Service’ to its customers, which many people do not even know about. Through this, you can get up to three times more interest on your account. To get the benefit of this service, you just have to go to the bank and ask to enable this service. Let’s know about it …
What is Auto Sweep Service?
First of all, let’s talk about the Auto Sweep service, so let us know that it is a facility that helps customers to get more interest on surplus funds. If you enable it, then the amount deposited in your savings account is automatically transferred to a fixed deposit i.e. FD if it exceeds a certain limit or has surplus funds. In such a situation, you get the benefit of the interest rate on the bank FD instead of the interest received on the savings account.
This is how the service works
Understand this auto sweep service offered by every bank in easy language, so if you have enabled auto sweep service on your savings account, then you can get more interest on the account opened with this service. Actually, when the amount deposited in your savings or current account crosses the sweep limit, the auto sweep facility is activated. If you look at the way it works, you have to set a limit in your account and after that your deposit is directly converted into FD.
For example, suppose you have set a limit of Rs 20,000 in the account and deposited Rs 60,000 in this account, then under this service, the amount of more than Rs 20,000 i.e. the additional amount of 40,000 will be converted into FD and this amount will get interest according to the interest rate received on the fixed deposit in the concerned bank, While a deposit of Rs 20,000 will get the interest fixed on the savings account.
Motivates you to save more
One of the special benefits of this service is that getting more returns on the money deposited in your bank account motivates the customer to save more. This also increases the regular savings of the people. Apart from this, you can also track your expenses and set a budget through this facility. With the Auto Sweep service, you get rid of the hassle of manually transferring money to FD, as it is an automatic process.
Used as a savings account
Usually, banks pay an average interest of 2.5 percent on savings in a bank account. However, it varies from bank to bank. At the same time, the interest rate on FD is available from an average of 6.5 to 7 percent. That is, the benefit of up to three times more interest on the amount deposited in the account.
