Fixed Deposit Sweep-In Facility

In a Sweep-In Facility, the overdraft amount is transferred from the Fixed Deposit account to the active bank account of the customer to process any transaction that is on hold due to insufficient funds.

Let’s assume an active account is linked with a Fixed Deposit of INR 50,000. The active account has INR 24,000 but needs INR 12,000 more to clear a pending transaction of INR 36,000. In this case, the bank will transfer only the required amount of INR 12,000 to the active account so that the transaction is done successfully.

Disclaimer: If there is a shortfall in your linked Savings or Current Account, the deficit amount will be automatically swept in from your linked Fixed Deposit (FD) under the Sweep-In facility. The Bank will first mark a temporary lien on FD real time basis to honour the deficit amount. The process of sweep in is carried out during the Bank's end-of-day (EOD) processing and is not a real-time transaction.

If sufficient cleared balances are credited to the Savings or Current Account before the end-of-day reconciliation, the lien on FD will be released, and the FD will remain intact. However, if the active account continues to have insufficient funds at the time of EOD reconciliation, the Bank will prematurely break the FD to the extent required to cover the deficit amount.

Customers are advised to maintain adequate clear balance in their Savings or Current Account before the end of the day to avoid premature closure of their Fixed Deposits.

During the ASBA allotment process, sufficient clear balance must be present in the active bank account. If the savings or current account lacks sufficient clear balance, a sweep-in lien will be placed on the relevant sweep-in fixed deposit having available balance (which is not lien marked), and the sweep-in will be executed during the end-of-day settlement cycle.

In case of linkage of more than one deposit to the savings/current account for a sweep in, the system will take funds from the FD which has the nearest booking or opening date (LIFO – Last in first out).

The interest rates offered on Fixed Deposits are generally higher than those offered on a Savings Account. Considering the amalgamation of these two essential accounts, the interest earned on Sweep-In Facility will be similar to interest on Fixed Deposits. For more information on interest rates, click here.

Yes, Sweep-In Accounts are absolutely safe. They transfer the money from an internal Fixed Deposit account to an active Savings or Current Account in the same bank, so there is no possibility of a data or confidentiality breach.

Considering that a Savings Account and a Fixed Deposit account are both considered cash equivalent, we can agree that a Sweep-In Facility is a cash equivalent as well. This is because it can be easily converted to cash at any point in the agreed-upon term.