You can earn more interest on your cash without it leaving the safety of your savings account through a sweep-in account. It is a two-in-one product that gives you the benefit of having liquid cash, while earning fixed deposit (FD) rates. The savings account gives you 3.5% on your money, while an FD can give up to 7%.
Type 1 sweep-in account
Under this, the FD can be tapped whenever you need cash. The bank simply transfers the amount you need out of the FD into your savings account in multiples of Rs1,000. But, your FD needs to maintain a minimum limit, usually Rs25,000. Most banks don’t have a minimum savings deposit requirement.
Type 2 sweep-in account
Here, the banks set a limit for your savings account. As soon as the balance exceeds the limit, the extra cash gets converted into an FD. Mostly, this happens on Sundays. So, if the limit is Rs5,000 and your balance goes up to Rs11,000 on Friday, Rs6,000 will get converted into an FD on Sunday.