The State Bank of India (SBI) has increased the minimum threshold limit for its auto-sweep facility in savings bank accounts from Rs 35,000 to Rs 50,000. This change is effective immediately and will benefit customers by providing them with higher interest rates on their surplus funds. The auto-sweep facility, also known as the Multi-Option Deposit (MOD) facility, is a type of fixed deposit linked to a customer’s savings or current account.
When the balance in a customer’s savings account exceeds the threshold limit of Rs 50,000, the excess amount is automatically transferred into an MOD. The MOD earns fixed deposit interest rates, which are higher than the normal savings account interest rate. This allows customers to earn a higher interest rate on their surplus funds without having to manually transfer them into a fixed deposit.
In case a customer’s savings account balance is insufficient to honor a debit mandate, SBI will partially or fully transfer the money back from the MOD scheme into their account. The interest on MOD is paid quarterly or on a compounded basis, and customers can withdraw their MOD prematurely, although a penalty may be applicable.
The SBI MOD scheme is designed to provide customers with a higher interest rate on their surplus funds, while also ensuring that they have sufficient liquidity to meet their financial obligations. With the increased threshold limit, customers can now keep a larger amount in their savings account before it is automatically transferred into an MOD.
The change is expected to benefit SBI customers who maintain a high balance in their savings accounts. The increased threshold limit will allow them to earn a higher interest rate on their surplus funds, while also providing them with greater liquidity and flexibility. Overall, the SBI MOD scheme is a convenient and flexible way for customers to manage their surplus funds and earn a higher interest rate, and the increased threshold limit is a welcome change for customers.