Please guide me on SBI Auto Sweep Account

POSTED BY v28rod ON September 9, 2014 5:43 pm COMMENTS (2)

Hi, I had placed an application to convert my dads savings account to savings plus account with a threshold of 10000. The branch executive converted it, amount of 50000 above threshold of 10000 has been converted to a single MOD. I was of the view that 50000 would be converted into 50 MOD units, each unit of Rs. 1000/- so that LIFO method can be followed during withdrawal. I am confused. SBI branch guys have no in depth knowledge about this. It would be helpful if you can guide me further. Thank You.

2 replies on this article “Please guide me on SBI Auto Sweep Account”

  1. ramakantp says:

    At every sweep out, one FD will be created with the amount greater than defined threshold(10000 in your case). In case you issue a cheque with amount more than the remaining amount, the MOD account will be broken in the multiple of 1000, till the point where it is sufficient to serve the cheque.

    MOD account will continue with rest of the amount.

    e.g. saving account initially has 15k, with 10k limit defined, a FD of 5K will be created. Now if you issue cheque of Rs. 12K, in that case 3K will be withdrawn from FD along with the interest on 3K for the period it was part of FD. Lets assume the interest is Rs 30.

    In this case 3030 will be deposited to saving account and 12K will be withdrawn to serve the cheque. Leaving 1030 as balance in saving account, and 2000 balance in FD.

    Hope it helps.

    1. Thanks for sharing that point Ramakant 🙂

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