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POSTED BY ON March 19, 2012 8:57 pm COMMENTS (21)
Dear Experts,
Which Bank has the best sweeping facility?
SBI has this by the name of MOD whose return normally lies in between 5%-6%.
HDFC has a sweeping facility and the Return is of FD but has a charge of 1% if we withdraw the money before the time period.
Kindly suggest the best bank in terms of interest and the charges involved in it.
Regards
Abhishek
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Abhishek,
i agree to your points. Well thanks everybody this thread did help me gain some additional information, different perception on Sweep Account facility. I sign off on this thread.
I spoke to HDFC customer care executive so as to get more clarity on the subject .
The interest rate of the bank varies with the time period. if a person goes for a sweepin for a time period of 1 year and 1 day he will get 9.25% (FD interest), whereas the interest rate for 1 month and few days is just 7%. It has various slabs to which the customer can put the money in as per his convienience.
If we pull out some of the money from the sweepin during the course of the tenure, then the amount which was withdrawn will only get the interest rate as per the time period.
Ex. If a person goes for a sweepin of 1 L for 1 year and 1 day he will get the full 9.25%. If he withdraw 10k in the second month. He will get 9.25% on the 90K and 7% on the 10k.
Regards
Abhishek
Just was googling….. DCB has auto sweep facility.
http://www.dcbbank.com/individuals/savings_account/premium_savings_account/premium_savings_account.html
they also have some charges that one should be aware of.
They are offering 9.5% for 13 months. Does it mean i would get 9.5% if i choose tennure for FD to be 13 Months ?
Ashal,
i could be wrong, the thing i wanted to highlight is, if SBI sweep Facility is just offering 5 to 6%, Would it not make sense to go to private bank offering higest rate of interest would offer better interest rates?
Let me put my question in different way :LVB is offering 10.5% interest. Does it not make sense to park money in LVB instead of SBI. I have deposited some money in LVB for FD.
I also invested some money in Canara bank when they were offereing 10.5% for 10 years for senior citizen. I guess 1 lakh matures to 2.9 odd lakh in 10 years.
I do hopp banks when i see there is noticable difference in returns. Yes keeping track is headache but some how i manage. it.
Assumption :LVB should be offering Sweep facility. In long run this difference in % could result in good amout of difference.
Willing to learn and get corrected.
Ashal, i feel the same, as i hav mentioned above.
Abhishek
wealthucreate u r ryt,,,
i feel person should use the bank with whom they deal the most,, The bank in which they have the ECS of their investment,loan or anything. Who knows when a person is short of money or forget to put the money so as to clear ther ECSs. Then this sweepin facility will act as a saver of all the penalties. At the same time we can enjoy high return of a FD than saving.
I think its the best place to keep the emergency fund(in the same bank in through which we have all our investment linked).
Regards
Abhishek
If we focus only on the concept of Auto Sweep Facility, it gives the flexibility of savings bank account and the high interest rate of FD. Generally all private banks with ATM and Internet facility should be ok to considre for having this account.
More over, with an assumption that Sweeping facility gives the same interest that is applicable for FD. One can look out for bank paying highest paying interest and then call up to check if they have sweep facility.
I am sure sweep facility are great product for lazy people like me.
Dear Wealthucreate, you are again complicating things for yourself. No reason to run here & there for a 0.25% or 0.5% higher return on these FDs. All banks, be it private or PSU, now a days are offering these sweeping FDs. So it’s advisable to have these FDs with your existing bank.
Thanks
Ashal
Ashal, u r right, i totally agree with you.
Karthik, Thanks for the suggestion. i will go with the sweepin which will act as an emergency fund.
Regards
Abhishek
Hi Abhishek,
Sweep Out – This is for the people who has FDs and who has less expenses and more surplus funds every month so that he can increase the FD amount.
Sweep In – This is for the people who has FDs and who has more expenses for which they had to break the FD frequently. The two options are
‘SuperSaver’ is for people who uses the overdraft facility(negative balance) and want to pay the interest for the amount borrowed from FD instead of breaking FD.
‘SweepIn’ is for people who just want just to break the FD with reduced interest rate as penalty.
You can convert the salary account or you can create new account. If you are creating a new account, then you had to transfer your surplus funds to the new account from your salary account whenever you have surplus funds. Also please map your current debit card to this new account.
No comments on the third question as I am not exactly aware of the other bank’s facilities
Regards
Karthik
Dear Karthik, Thanks for the info. Please answer the below:
1) Will you please let me know which of the 2 is more beneficial 2 have Sweepin or Sweep out and how? And whats the catch in each of these.
2)Secondly, is it fruitful to convert the salary account to saving max. Or should i open a different account altogether.
3) Do you feel i should go with HDFC or any other bank has somthing better to offer.
Regards
Abhishek
Dear Abhishek, in addition to inputs already given by dear Karthik, I w’d ask you to do not concentrate too much on the return side. Please treat these sweeping FDs as the Icing on the Cake & not the Cake itself.
Thanks
Ashal
Dear Abhishek…
This response is only for HDFC(Personal Experience) related Sweep Facilities.
There are two types of Sweeping Facilities.
Sweep In – From FD to Savings Account – Eg. SuperSaver and SweepIn
Sweep Out – From Savings Account to FD – Eg. MoneyMaximizer
I suppose you are validating the option for Sweep Out. i.e Moving the excess funds into higher rate of interest FD(Normally 1 Yr and 1 Day rate).
This is available only on specific accounts known as ‘SavingsMax’ and ‘Kid’s Advantage’.
If you have a normal Salary Account, then you can only do Sweep In(FD to SB A/C).
You had to convert your account type from salary account to ‘SavingsMax’ and you should enable a facility called ‘MoneyMaximizer’
http://www.hdfcbank.com/personal/accounts/savings_accounts/money-maximizer.htm.
Regards
Karthik
I was thinking of taking HDFC since i have my salary account and i use it frequently aswell.
Something came up in my which i want to share. How about keeping 50k in hdfc and 50k in SBI.
Abhishek
Dear Abhishek, your money your choice.
All I can say.
Thanks
Ashal
Dear Ashal, I have an emergency fund of around 1lac.. Was thinking to utilize in a much better way.Someone in this forum suggested me to keep the emergency fund in sweepin rather than saving.
So i called up HDFC(customer care) to find more info about it. From there i came to know about the charges(1%) and the other features.
Vignesh: Saw this in one of the articles.
Just now i came across an article of manish which says the same.
http://jagoinvestor.dev.diginnovators.site/2011/03/auto-sweep-bank-account.html
Regards
Abhishek
Dear Abhishek, now you have to decide, what do you want to do for this sweeping FD?
Thanks
Ashal
Dear Abhishek, the main aim of sweeping FD is not to earn super super returns but to have liquidity with a return better than SB account rate. So the 5 or 6% is indeed better than 4% offered on SB account. If return is your sole aim, then liquid or short term plans of debt MFs are the ones for you.
Thanks
Ashal
Hi
I am having SBI savings plus in which it is automatically converted into FD. pls can you explain how it provides 5 to 6 percent?
Regards
Vignesh
Oriental Bank of Commerce provides one of the best sweeping facility account ‘SB Smart SAVE’. If the balance in the savings account exceeds Rs.25,000 the amount in excess of 25,000 will be sweeped to flexi deposit in mutliples of 5000.
Check out Kotak Mahindra. They sweep out if any amount over 1 lac is lying in the bank account.
Regards
BFA