Fixed Deposit (FD) Sweep-in

Fixed Deposit (FD) Sweep-In allows you to automatically withdraw funds from your FD without any penalty while offering better returns for regular transactions.
FD Sweep-in
3 min
28-April-2025

A sweep-in FD, or fixed deposit sweep-in, is a facility that automatically moves surplus funds from your savings account into an FD account. This allows you to earn higher interest rates on idle money while maintaining easy access to your funds whenever needed, especially during emergencies.

How does a sweep-in Fixed Deposit (FD) work?

A sweep-in FD facility works by linking the depositor’s savings or current account to their FD account. The depositor has to set a threshold limit for their linked savings or current accounts. Every time the funds in the linked savings account exceed this present limit, the bank auto-transfers the surplus to the linked sweep-in FD account.

Here’s how a sweep-in FD works: Suppose your savings account has Rs. 50,000 and you’ve set a sweep-in threshold of Rs. 30,000. When your salary of Rs. 30,000 gets credited, your balance becomes Rs. 80,000. The bank will automatically transfer the surplus Rs. 50,000 into your linked FD account, where it earns FD interest rates. You can withdraw this surplus anytime for short-term needs without paying penalties.

Components of fixed deposit sweep-in

Parameter

Details

Investment tenure

The investment tenure for a sweep-in FD account can range from 1 to 5 years.

Linked accounts

A sweep-in FD can be linked to a current or savings account held in the same bank.

Minimum investment amount

Banks auto-transfer funds from linked accounts in multiples of Rs. 1,000. However, the sweep-in amount can vary from one bank to the next.

Interest rate

The applicable interest rate is similar to regular FDs and depends on the length of the investment tenure.

Withdrawals

Partial withdrawals from the excess amount in the sweep-in FD account are allowed, typically free of charge.

Eligibility

Investors with an existing FD of Rs. 25,000 or premium account holders with a minimum balance requirement of Rs. 25,000 to Rs. 1,00,000 can opt for the sweep-in FD facility.


You can Calculate FD interest rates using FD Calculator

How to apply for a sweep-in FD facility

To initiate a request for the FD sweep-in facility, you need to follow these steps:

  • Step 1: Log in to your net banking account using your credentials.

  • Step 2: Navigate to the ‘Fixed Deposit’ section and click the ‘FD Sweep-In’ option.

  • Step 3: Enter details of your savings account and FD accounts you wish to link via the sweep-in facility.

  • Step 4: Set the threshold limit for the linked savings bank account. Surplus funds over this limit will be auto-transferred to the FD account.

  • Step 5: Select a term for the auto sweep-in facility.

  • Step 6: Review all the information provided and click ‘Confirm’ to activate the facility.

Advantages of Fixed Deposit Sweep-in

  • Automated savings optimisation: The FD sweep-in facility automatically manages your finances by transferring surplus funds to ensure better earnings without manual interventions.
  • Better interest yields: The FD interest rate for 1-year deposits tends to be much higher than the interest paid on savings account deposits of the same value. By auto-sweeping the excess funds to the linked FD account, the sweep-in facility allows depositors to benefit from higher FD interest rates. Moreover, you only lose interest on the amount withdrawn.
  • Easy liquidity: Sweep-in FD accounts offer ample liquidity benefits to the depositor. You can easily withdraw funds from the surplus deposited into the FD account to meet financial emergencies. In other words, you can maintain liquidity without breaking the FD.
  • No add-on charges: There are no additional charges on sweep-in FD accounts. Even premature withdrawals made from the account are free from penalties.
  • Flexibility: The sweep-in facility offers investors the flexibility to choose the period of activation as well as the threshold for their linked accounts. This way, you can maintain a disciplined yet flexible approach to saving and investing.

Also Read: Right Time to Invest in a Fixed Deposit

Difference between a sweep-in and flexi deposit

Both flexi FDs and sweep-in FD accounts offer depositors the benefits of high interest rates and easy liquidity. Under both, investors can prematurely withdraw funds without breaking the FD. While their goals are similar, both differ in terms of structure and operation. Firstly, the sweep-in feature can be introduced into an already existing regular FD account. However, a flexi deposit is a completely different fixed deposiaccount.

Secondly, for flexi FDs, depositors need to manually deposit funds into their fixed deposit accounts. In the case of sweep-in FD accounts, this deposit system is automated. Funds exceeding the mandated threshold limit in the depositor’s linked savings accounts are auto-transferred by the bank into the FD account. Depositors only need to set a one-time mandate for the same.

Conclusion

A sweep-in FD account is perfect for investors looking for liquidity without losing out on higher returns. The auto sweep-in facility also helps streamline financial management by eliminating the need to open multiple FD accounts as you keep accumulating idle funds. Instead, this facility allows the bank to auto-transfer surplus funds to the linked FD, where they earn higher interest than savings accounts until withdrawal or maturity.

If you want higher yields on your FD investment, opt for a corporate FD. Options like the Bajaj Finance FD bring you high interest rates of up to 7.95% p.a. on a low minimum investment amount. Additionally, with flexible tenures and payout options, you can customise your Bajaj Finance FD to suit your liquidity requirements and financial strategy.

Calculate your expected investment returns with the help of our investment calculators

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Frequently asked questions

What is FD sweep-in?

A Sweep-In FD is very much similar to a Regular FD. But in case of a financial emergency, it allows the account holder to use funds from the FD Account without breaking the FD. With the Sweep-In facility, you can link one or more Savings or Current Accounts to the FD Account.

Is it possible to get a sweep-in with repeated deposits?

Yes. Several banks allow you to link multiple FDs to your sweep account.

Can anyone with an existing fixed deposit avail of the sweep-in facility?

Investors with their savings and fixed deposit accounts in the same bank can opt for the sweep-in facility. Moreover, this facility is usually available to resident Indians, HUFs, and public and private firms.

What is sweep-in facility for FD?

A sweep-in facility for FD automatically transfers surplus funds from your savings account into a fixed deposit once a set threshold is crossed. This helps you earn higher FD interest rates while maintaining liquidity. It combines the flexibility of a savings account with the returns of a fixed deposit, making your idle funds work harder.

Is there any penalty in sweep-in FD?

Generally, sweep-in FDs do not impose penalties on premature withdrawals. When you need funds, only the exact required amount is withdrawn from the FD, while the remaining deposit continues earning interest. However, the interest rate may be slightly lower than regular FDs for the withdrawn portion, depending on the bank's policy.

Can I withdraw money from sweep FD?

Yes, you can withdraw money from a sweep-in FD at any time. The amount needed is broken from the FD in multiples set by the bank, without affecting the rest of the deposit. This flexibility allows you to meet short-term needs without closing the entire fixed deposit prematurely or facing heavy penalties.

Is sweep-in FD taxable?

Yes, sweep-in FD interest is taxable. The interest earned from the sweep-in FD is treated as ‘Income from Other Sources’ under the Income Tax Act. It is added to your total income and taxed according to your applicable income tax slab. Banks may also deduct TDS (Tax Deducted at Source) on the interest.

What is the disadvantage of sweep-in FD?

One major disadvantage of a sweep-in FD is that the premature withdrawal of funds may earn lower interest rates compared to the original FD rate. Additionally, frequent withdrawals can reduce the effective return on your savings. Also, since interest earned is taxable, it could impact your overall post-tax earnings.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.