ICICI Bank Money Multiplier account Linked FD feature

POSTED BY JayaprakashReddy ON February 23, 2011 12:03 am COMMENTS (28)

Did anyone use the facility of ICICI bank money multiplier account? Till now my account was linked to icici trading account so couldn’t use this facility.

For those who dont know about this facility here is the link. I remember that earlier there was same kind of facility where in if you activate this, they used to auto sweep your money in/out from linked FD based on the minimum balance of 10k.

Now my question is they have removed auto sweep facility to move money from your savings account to FD when the balance is above 15k, but the reverse is still there. Now we need to create FD in multiples of 5K to avail this facility. Are there any problems in using this facility, other than service, such as penalty on breaking FD or any other kind of issues.

If anyone used it and faced any issues please let us know. That will help me and others to be aware of those issues and avoid, if using this facility.

28 replies on this article “ICICI Bank Money Multiplier account Linked FD feature”

  1. rakesh saini says:

    we invest 5000/ please let me which plan..

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  2. Rajkumar says:

    I understand cheque but what about ECS & SI payments, will it take the requirement money from my FD automatically? As in is my ECS and SI payments taken as equal to cheque.

    Also is the penal rate for early closure of FD only reduced on the interest amount or total deposit amount?

  3. Prakash says:

    When I withdraw money by breaking the FD, do they charge penalty for the whole FD amount/only for the money which broke down ?

    For example i made money multiplier FD for 50,000
    my savings account balance is 11,000
    then after 6 months I withdraw 20,000
    then my FD will be 40,000
    now my question is the penalty will apply for only to the 20,000 or to the whole 50,000 ?

    1. Deb says:

      Hi Prakash,

      As I understand, the penalty will depend on tenure of your FD (> 1 yr – 1%) and applicable only to the amount being withdrawn. So if you are withdrawing 20000 after 6 months from FD of 50000 of 1 yr period, the interest you will get on the 20000 being withdrawn is not 8.5 %, but 7 % (applicable for deposits of 6 months) minus the penalty of 1% i.e, you will get interest of 6 % on 20000 for 6 month period. Your balance 30000 will continue to earn 8.5 % for the entire FD period.


  4. Sachin says:

    Dear Ashal,
    I have a salary account with icici bank,
    Kindly clarify if i can use this facility as my account has Zero minimum Balance.

    1. Dear SAchin, please contact ICICI for converting your existing zero balance account to Money Multiplier account. Before converting, please do check the pros & cons of conversion.



  5. prateek says:

    Hey Ashal,

    Thanks for the reply. Wanted to ask what is that difference?

    I checked http://www.icicibank.com/interest-rates.html

    I didn’t find any difference. A FD of 390 days would earn same interest as 1 year 1 month. Then what interest difference are you talking about?

    1. Dear Prateek, earlier there were differential rates (& a bit higher) for odd maturity FDs say 390 or 590 or 790 days. It’s only for past few months that the difference is not there. Now you have the option to go for normal or odd maturity as per your own choice. So practically there is no such difference for the sweeping FDs we are discussing.



  6. Dear Prateek, the difference lies in the interest rates offered on the 2 types of FDs.



  7. prateek says:

    I tried to “Apply for Money Multiplier Account” and got the following two options:

    1.Special Money Multiplier Account

    To earn Special Rate on your Linked Fixed Deposit, please select 390/590/790/990 days in the Tenure of Deposit (Days) option given.

    2. Standard Money Multiplier Account

    Tenure of Deposit :-
    Tenure of Deposit :- Minimum – 1 Year, Maximum -10 years.

    Does anybody know the difference between the two kinds?

  8. AB says:

    Thanks JP and Ashal

    My first doubt is still unclear.

    I want to know if I can withdraw from savings account without affecting FD or not?

    As far as i understood the concept, a part of money gets converted into FD and other part gets normal savings interest.
    Suppose I have 50k in my account. I want to know how much amount will goto FD? Is it decided by bank or i can decide? After FD is created, I want to keep FD unaffected as much as possible and i wish to withdraw from my savings balance only. Is this possible?

    1. Dear AB, is you do have a positive balance in your SB account i.e. more than minimum balance limit but less than FD cut off limit, your transactions ‘ll be honored. In case money is falling short for balance in your SB account, your FD ‘ll be re adjusted & a part of your FD money ‘ll be redeemed & ‘ll kept in the SB account.

      If you do not want to touch that FD, please try to maintain the minimum balance if not more in that SB account.



  9. AB says:

    One more..

    Can we set any amount as minimum balance which is 10K default i guess?

    1. Dear AB, some banks provide freedom to set limits where as in most banks the cut off limits for such sweeping FD accounts are pre fixed.



  10. AB says:

    Hi All

    I want to use this facility. Before that I would like to clear some basic queries:

    1. If i set the min balance as 10,000 and I have a total of 50 K in my account. I will get an FD of 40 k, (correct me if i m wrong).

    a) Now i wish to withdraw 5k through atm, my FD will remain untouched and savings balance will becom 5k?

    b) WITHDRAWING 15000 : In this case, 10k will be deducted from savings and 5k from FD?
    If so, will the entire 40k FD break or 35 k fd will remain ?

    c) Consider case (a) i.e savings balance 5k. When i credit 10,500 to my account, what will be my savings and fd balance? Do we need to set any particular date on wich sweep takes place?

    d) what are the FD tenures and interest rates available?

    e) Are there any charges for using this facility?


    1. JayaprakashReddy says:

      Hi Abhi,


      1. You cant set minimum balance as 10k, that’s decided by bank and its same for all general savings acocunts in ICICI. Above this 10k balance you can create linked FD with remaining balance in multiples of 5k.

      2. If you withdraw 5k from atm, your min balance 10k will remain as is and they will withdraw 5k from linked FD and keeps 35k FD as is.

      3. If you withdraw more than 10k then same amount will be withdrawn from your FD and remaining FD amount is kept as is provided total FD is greater than 5k. If FD value falls below 5k then it is automatically broken.

      4. Linked FD is not created automatically when your balance is more than 10k. You have to create linked FD in multiples of 5k with the amount more than 10k in your balance

      Regular interest rates which are given on their website are applicable for the duration you keep that FD. Even if you create FD for 1yr at interest rate of 8%, but if you break that FD within a month then interest rate of 30 days tenure (5%) is applied minus 1% pre-closure charges on interest earned.

      Interest rates are available here:http://www.icicibank.com/interest-rates.html#fd

      Hope this clears your doubt.


  11. Dear Nayan, yes you may create FD of 5K but be sure that you really need this facility.

    Yes activation of netbanking is available through phone & netbanking.



  12. Nayan Bhattacharya says:


    1. I would like to know that I’ve the balance of 15k. Can I create one FD of 5k ?

    2. Is it possible to activate or request for money multiplier activation through netbanking ?


  13. Anirban Ghosh says:

    1. Has anyone faced any issues while withdrawing money from ATM or via cheques after enabling the Money Multiplier feature? Especially where the amount withdrawn makes it necessary for one/more of these linked FDs to be broken.

    2. Will the reverse sweep also kick in if I’m doing an online transaction (e.g., NEFT transfer)?

    It would be great if some of the existing users of this feature could reply.


    1. JayaprakashReddy says:

      Hi Anirban,

      1. No, never faced any issue. I’ve withdrawn money from ATM and FD automatically broken after that. Never tried cheque issue with that.

      2. Yes

  14. JayaprakashReddy says:

    I’ve clarified all the doubts from the bank directly. Here are the clarifications:

    1. If you break it prematurely there is no penalty as these FD accounts are treated separately.

    2. Even on premature withdraw they will pay the interest for the period you kept money in that FD with the same interest rate which you have chosen at the time of opening that FD.

    3. Though there is no automatic transfer of money from your savings account to FD but the reverse is available. You can create FD of any amount above savings account balance of 10k in multiples of 5k, but while reverse sweep they only transfer the required money in multiples of 5k instead of breaking the full FD. Example: you have created FD of 50k, you have current balance in your account as 12k. If you try to withdraw 20k from ATM, they will transfer 20k from FD account to savings and remaining 30k will be there as is in the FD account.

    1. JayaprakashReddy says:

      Its been 4 months since I’m playing with this money multiplier facility and I observed couple of things in this and want correct my above statements from the experience I had with this facility. Also want to provide more details which I observed during this time.

      All the points mentioned in the above post dated Feb 24th 2011 are based on the information I got from ICICI customer care. As usual it proved that customer care executives are ignorant about the features.

      1. If you break it prematurely there is no penalty as these FD accounts are treated separately.
      Correction: This is wrong. Premature withdrawl penalty is applicable for this facility as well. In ICICI if you break FD partially or completely they will calculate the penalty based on the tenure of the FD. If tenure is below 1yr then it will be 0.5% if it is more than a year than 1% and if it is more than 5yrs then 1.5%. For example you have created FD for 790 days (9.25% interest rate) and you break this FD after 31 days then your effective interest for the period you hold the FD is 4% (31days period interest rate 5% – penalty for FD tenure more than a year 1%).

      2. Even on premature withdraw they will pay the interest for the period you kept money in that FD with the same interest rate which you have chosen at the time of opening that FD.
      Correction: Completely wrong. Refer calculation in above point. Interest will be considered of the duration you hold the FD.

      3. I said reverse sweep (FD to bank account) is multiples of 5k.
      Correction: No, reverse sweep amount depends on the amount required to fill the min balance limit in bank account. If min balance is 10k and after some transaction account balance is 9890, then only reverse sweep of 10 is done. If after some reverse sweep transactions FD amount goes below 5k then they will break complete FD automatically.

      After savings bank account interest is increased to 4%, I would suggest use money multiplier facility only if you want to keep the money in FD for more than 31 days and tenure of FD is less than 1yr. If tenure is more than 1yr then you should keep the FD for more than 46 days in order to get more interest (effective after penalty) than savings account interest (4%).

  15. Atul says:

    Hi Jayaprakash,

    I have been using this facility for the last 10 years and there is no penalty for breaking the FDs often.



    1. JayaprakashReddy says:

      Hi Atul,

      That’s really good motivating point.

    2. JayaprakashReddy says:

      If it is broken before maturity, then do they pay any interest for the period you hold and what is that interest rate?

      Say, I choose 1yr option and at 8% interest rate, then if I broke it after 5 months, in this case do they pay me interest for 5 months at 8% rate or any other lesser rate which is applicable for that less period?

      Any idea?

      1. Ram says:

        Isn’t there a penalty of between 0.5% to 1.5% for premature withdrawal in FDs with ICICI? Check this link – http://www.icicibank.com/interest-rates.html, under the “Penalty on Pre-mature withdrawal” table.


  16. Anand says:

    I have opened one recently. The payout frequency of interest is annual and you can’t change it. The entire balance is available to you through cheque and ATM. I have opted for 590 days which gives you 9% interest. If the interest in the year exceeds 10,000 then the bank will cut some tax before giving you the interest.

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