What is Auto-Sweep Facility? Meaning, definition and how it works
Auto-sweep facility in banks works on a simple idea: most people don’t use every rupee sitting in their savings account on any given day, so there’s no reason to let it earn a flat savings rate when it could earn more.
Banks built this feature by linking a regular savings or current account to a fixed deposit, sometimes called a sweep-in FD or linked fixed deposit, so the two function as one unit behind the scenes.
You set a threshold balance when you activate the facility, either at a branch or through net banking.
Any amount above that threshold moves into the linked FD automatically, usually in fixed increments such as multiples of 1,000 rupees.
If your balance later falls below the threshold, the bank breaks just enough of the FD to top it back up.
Savings account interest rates in India have been deregulated since 2011, so each bank sets its own rate, and most large banks currently pay between 2.5% and 4% on regular savings balances.
Fixed deposit rates run several percentage points higher depending on tenure, which is the entire reason auto-sweep facility exists. It captures that gap without asking you to actively move money between accounts.
Did you know? SBI has held its savings account rate at 2.50% per annum since June 2025, even as its fixed deposit rates for shorter tenures moved between roughly 3% and 6.4% through 2026. That gap is exactly what an auto-sweep facility is built to capture.
How does Auto-Sweep Facility work?
Auto-sweep facility moves money in one of two directions, and banks aren’t consistent about which direction they call “sweep-in” and which they call “sweep-out.”
Some label the savings-to-FD transfer as sweep-out and the FD-to-savings transfer as sweep-in; others use the opposite labels. The direction matters more than the name your bank gives it.
- You fix a threshold balance with your bank, for example ₹50,000, when you activate the facility online or at a branch.
- The bank checks your balance against that threshold, usually once a day.
- If the balance is higher, the surplus above the threshold moves into a fixed deposit, typically in increments such as multiples of ₹1,000 or ₹5,000 depending on the bank.
- That swept amount earns the bank’s prevailing FD rate for whatever tenure its sweep scheme applies, not the flat savings rate.
- If a withdrawal, EMI, or bill payment pushes your balance below the threshold, the bank automatically breaks enough of the FD, in the same increments, to restore the minimum balance, usually within the same business day.
Pro tip: Ask your bank exactly which FD tenure its auto-sweep facility defaults to before assuming you’re getting the best available rate. A facility that defaults to a 1-year slab can pay meaningfully less than a 3-year slab if your bank’s rates aren’t flat across tenures.
Example of Auto-Sweep Facility with real numbers
Priya, a 35-year-old marketing manager in Bengaluru, keeps her salary account at SBI with the auto-sweep facility switched on, threshold set at ₹50,000.
Her June salary credit takes her balance to ₹1,50,000. The bank sweeps the ₹1,00,000 above her threshold into a linked term deposit, in multiples of ₹1,000, leaving exactly ₹50,000 in her savings account.
| Amount | Rate (SBI, general citizen, June 2026) | Annual interest | |
|---|---|---|---|
| If it all stayed in savings | ₹1,50,000 | 2.50% | ₹3,750 |
| Retained in savings | ₹50,000 | 2.50% | ₹1,250 |
| Swept into FD | ₹1,00,000 | 6.40%* | ₹6,400 |
| Total with auto-sweep | ₹1,50,000 | N/A | ₹7,650 |
*Indicative SBI rate for a 2-to-3-year term deposit slab in June 2026. The actual rate depends on the tenure your bank’s sweep scheme applies, so check current rates before relying on this figure.
By activating the facility, Priya earns roughly ₹3,900 more a year on the same money, with no change to how she uses her account. Three weeks later she needs ₹20,000 for a car repair.
SBI breaks ₹20,000 worth of the FD and credits her savings account the same day, without a branch visit or any loss of access to the remaining FD.
Types of Auto-Sweep Facility
Auto-sweep facility isn’t a single fixed product. Banks vary it by which account it’s linked to and how the swept money is held, and the right type depends on whether you’re managing personal spending or business cash flow.
Savings-to-FD sweep
This is the standard version most retail customers use.
Surplus from a regular savings account moves into a fixed deposit once it crosses the threshold, and the FD breaks automatically to cover any shortfall. SBI, HDFC, ICICI, and most other large banks offer this as a feature you switch on within an existing savings account.
Current account sweep
Businesses and traders use this version to park working capital that sits idle between payment cycles. Because business balances fluctuate more, banks often apply shorter default FD tenures here than they do for personal savings sweeps.
Multi Option Deposit Scheme (MODS)
SBI markets its version under this name. Rather than creating a separate FD on every sweep, MODS treats the term deposit portion as a single flexible deposit that can be partially withdrawn in increments of ₹1,000, which works slightly differently from a bank that opens a fresh mini FD each time.
Salary account sweep
Some banks bundle auto-sweep into premium salary account variants, sweeping out the leftover balance after monthly expenses and reversing it just before the next salary credit.
This suits salaried professionals who don’t want to manually move money every month.
Quick comparison
| Type | Linked account | Best suited for |
|---|---|---|
| Savings-to-FD sweep | Regular savings account | Individuals with irregular spending |
| Current account sweep | Current account | Businesses and traders |
| MODS | Savings Plus account (SBI) | SBI customers wanting partial withdrawal flexibility |
| Salary account sweep | Premium salary account | Salaried employees with predictable expenses |
Banks offering Auto-Sweep Facility in India
Most large Indian banks offer some version of auto-sweep facility, though the product name, minimum threshold, and sweep increment differ.
Always confirm current terms with the bank, since thresholds and minimum sweep amounts are usually set per customer and change over time.
| Bank | Product name | Typical minimum threshold | Sweep increment |
|---|---|---|---|
| State Bank of India | Auto Sweep / Savings Plus (MODS) | Customer-set, often ₹25,000 to ₹35,000 | Multiples of ₹1,000 |
| HDFC Bank | Sweep-in facility (MoneyMaximizer) | ₹35,000 to ₹1,25,000 depending on account variant | From ₹1; linked FD starts at ₹10,000 |
| ICICI Bank | Money Multiplier / Sweep-out FD | Customer-set | Multiples of ₹5,000 |
| Axis Bank | Encash 24 / Auto Sweep | Customer-set | Set by bank at activation |
| Kotak Mahindra Bank | ActivMoney | Customer-set | Set by bank at activation |
| Bank of Baroda | Auto Sweep and Reverse Sweep | Customer-set | Set by bank at activation |
| IDFC FIRST Bank | Auto Sweep Savings Account | Customer-set | Set by bank at activation |
| Punjab National Bank | Sweep-in / Sweep-out | Often ₹5,000 minimum sweep | Multiples of ₹5,000 |
SBI, HDFC, and ICICI come up most often in search results mainly because they’re India’s largest retail banks by customer base, not necessarily because their sweep terms beat smaller banks.
IDFC FIRST Bank and Kotak Mahindra Bank, for instance, typically waive the premature withdrawal penalty that SBI and ICICI charge when the FD breaks early.
Key components of Auto-Sweep Facility
- Threshold balance: The level your account balance must cross before the sweep activates. You set this when activating the facility, and it commonly ranges from ₹25,000 to over ₹1,00,000 depending on the bank and account type.
- Sweep increment: The fixed unit in which money moves, such as multiples of ₹1,000 at SBI or ₹5,000 at ICICI and PNB. You can’t sweep an arbitrary amount like ₹1,234.
- Linked deposit tenure: The fixed deposit holding the swept funds carries its own tenure and rate, which the bank’s sweep scheme assigns by default rather than letting you choose from every available FD slab.
- Reverse sweep mechanism: The automatic process that breaks part of the FD to restore your balance when it dips below the threshold, usually completed the same business day without any request from you.
- Premature withdrawal penalty: Whether breaking the FD early costs you anything. This varies by bank: SBI and ICICI typically deduct 0.5% to 1% from the applicable rate, while some others waive it.
Benefits of Auto-Sweep Facility
- Higher returns on idle cash: Money above your threshold earns the bank’s FD rate instead of the flat savings rate, a gap that ran roughly 2.5 to 4 percentage points at most large Indian banks through 2026.
- No loss of liquidity: The reverse sweep happens automatically the same day you need funds, unlike a standalone FD that locks your money for the full tenure unless you pay a penalty to break it.
- Useful for lumpy income: Freelancers, consultants, and small business owners who receive payments irregularly can let surplus cash earn more between invoices without manually managing transfers each time money comes in.
- No new account or paperwork: Most banks activate it on an existing savings, current, or salary account through net banking, so there’s nothing extra to open or maintain.
Risks and limitations of Auto-Sweep Facility
- You may not get the best available FD rate: The sweep scheme applies whatever tenure the bank defaults to, which might pay less than a regular FD you book yourself for a longer term. Compare the two before assuming the sweep rate is optimal for money you won’t need soon.
- Premature withdrawal penalty: Banks like SBI and ICICI deduct 0.5% to 1% from the rate when the FD breaks early to cover a shortfall, while banks like Kotak Mahindra and IDFC FIRST typically don’t. Check your specific bank’s policy rather than assuming it’s free.
- Fully taxable interest: Interest earned on the swept portion is taxed at your income slab, and TDS applies once it crosses ₹40,000 in a year (₹50,000 for senior citizens), the same as any other FD. Don’t treat it as tax-free savings income.
- Statement clutter: Frequent sweeps can create several small FD entries in your statement, which makes manual reconciliation harder if you track your own finances closely.
Important: Auto-sweep facility protects liquidity on money you already hold. It doesn’t increase how much your account can earn beyond what the linked FD rate allows, so don’t mistake it for an investment strategy on its own.
Frequently asked questions
What is auto-sweep facility in simple terms?
Auto-sweep facility is a feature that automatically moves money above a balance you set from your savings or current account into a fixed deposit, then moves it back the moment you need it.
It lets idle money earn a higher fixed deposit rate without you losing same-day access. Most major Indian banks offer some version of this on a regular savings, current, or salary account, usually activated free through net banking.
What interest rate does auto-sweep facility offer?
The swept portion earns whatever fixed deposit rate the bank’s sweep scheme applies for its default tenure, not the savings account rate.
As of June 2026, that gap commonly runs from about 2.5% on savings to roughly 6.4% on FDs at a bank like SBI, depending on tenure.
A common misconception is that the sweep automatically gets the bank’s best FD rate; in reality, it gets the rate for whichever tenure the scheme defaults to.
Which banks offer auto-sweep facility in India?
SBI, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Bank of Baroda, IDFC FIRST Bank, and Punjab National Bank all offer some version, though they use different names such as Money Multiplier, ActivMoney, or Encash 24.
SBI, HDFC, and ICICI show up most often in search results mainly because they’re India’s largest retail banks, not because their sweep terms beat smaller banks.
What is the minimum balance required for auto-sweep facility?
There’s no single number. You set the threshold when activating the facility, and most banks ask for a minimum of ₹25,000 to ₹35,000 to begin, though some account variants require ₹1,00,000 or more.
This threshold is separate from any minimum average balance rule on your base savings account, which several large banks have waived entirely.
How do I apply for auto-sweep facility?
Most banks let you activate it through net banking or their mobile app, under a section usually labeled Deposits or Auto Sweep, without a branch visit. You’ll set your threshold balance and confirm the linked account.
If your bank doesn’t offer self-service activation, you can request it at a branch or through customer care; the steps are nearly identical across banks, only the menu labels differ.
Auto-sweep facility kya hai?
Auto-sweep facility is a banking feature where surplus money in your savings account, above a limit you set, automatically moves into a fixed deposit to earn higher interest, and moves back the moment you need it.
You don’t have to do anything manually once it’s set up. It’s available on regular savings, current, and salary accounts at most major Indian banks.
Is auto-sweep facility better than keeping a separate fixed deposit?
Neither is strictly better; they solve different problems. A separate FD usually lets you pick the exact tenure and often the best rate the bank offers for that period, but it locks your money.
Auto-sweep facility trades a small amount of rate flexibility for automatic, same-day liquidity. If you’re confident you won’t need the money for years, a manually chosen FD may earn more.
When should I consider activating auto-sweep facility on my account?
It’s worth activating if you regularly carry a savings balance well above your monthly expenses and don’t actively move that surplus into FDs yourself.
If you already invest your disciplined surplus into mutual funds or FDs every month, the facility adds less value since you’re not leaving much idle. A financial planner can help you decide the right threshold based on your actual cash flow rather than a guess.