State Bank Of India Raises Auto Sweep Facility Threshold To Rs 50,000

The State Bank of India (SBI) has increased the minimum threshold for its auto sweep facility in Savings Bank accounts. Previously set at Rs 35,000, the new limit is now Rs 50,000. This change aims to enhance the benefits of fixed deposits for customers.

SBI informed its customers via email about this update. "We inform that the minimum threshold limit for the auto sweep facility in Savings Bank accounts has been increased from Rs 35,000/- to Rs 50,000/-. Hence, the next MOD (Multi Option Deposit) shall be triggered at Rs 50,000/-," stated SBI.

Understanding MOD and Its Benefits

The Multi-Option Deposit (MOD) is a fixed deposit linked to your savings or current account. When your account balance exceeds a certain threshold, any surplus amount is automatically transferred into an MOD. This allows you to earn higher interest rates compared to a regular savings account.

In situations where there isn't enough money in a customer's savings account to cover a debit mandate, SBI will transfer funds back from the MOD scheme. "The basic feature of the SBI MOD scheme is to facilitate customers to gain a higher interest rate, out of the surplus funds above a threshold limit from the Savings Bank Account is transferred automatically to Term Deposits (MODS)," read a statement on SBI's official website.

Interest and Withdrawal Details

Interest on an MOD is paid quarterly or compounded. If you withdraw prematurely, the bank pays you with a penalty at the applicable interest rate for that period. The remaining deposit continues earning interest at the original rate while TDS is deducted as applicable.

If your Savings Bank Account lacks sufficient funds for a debit mandate, SBI will execute a partial or full withdrawal from term deposits and credit it back into your account. This ensures seamless transactions without disrupting your financial plans.

Varun Yadav serves as Sub Editor at News18 Business Digital. He covers markets, personal finance, technology, and more. Varun completed his post-graduation diploma in English Journalism from the Indian Institute.

This adjustment by SBI aims to provide better returns on surplus funds by linking them with term deposits through their auto sweep facility. Customers can now enjoy enhanced benefits with this updated threshold.