SBI Auto Sweep Limit: State Bank of India (SBI) has made an important change for its customers. The bank has increased the minimum limit of auto sweep service. Now this limit has been increased from Rs 35,000 to Rs 50,000. That is, now when the balance in your savings account goes above Rs 50,000, it will automatically convert into fixed deposit (MOD) and give you more interest.

What is SBI’s MOD scheme?

MOD or Multi Option Deposit is a special scheme. In this, the bank automatically transfers the extra money lying in your savings account to term deposit. This gives you more interest than the savings account. If there is shortage of money in the savings account, the bank puts the money back from MOD to your account. This is called reverse sweep. This money can be partially or fully swept.

What does the new limit mean?

Earlier this limit was Rs 35,000, i.e. money above that limit was converted into MOD. Now this limit has been increased to Rs 50,000. That is, now the process of becoming MOD will start only when there is a balance of Rs 50,000 or more in the account.

Interest and payment terms

The interest rate on MOD is higher than that on savings account.

Interest is paid on a quarterly basis and is compounded.

If you break the MOD, that is, withdraw the money, then interest is paid at the rate for that period and a small penalty may be levied on it. Interest on the rest of the deposit continues to be paid as normal.

TDS (Tax Deduction) is applicable on interest.

Benefits for senior citizens

SBI offers senior citizens extra interest rate on MOD. However, super senior citizens above 80 years of age do not get any extra interest.

How is reverse sweep done?

The reverse sweep takes place in units of Rs 5,000. If the balance in the term deposit is reduced to Rs 15,000, the bank puts the entire amount back into the savings account. The withdrawal rule is LIFO i.e. Last In First Out i.e. starting from the latest MOD. If the customer wants, he can also choose the option of FIFO First In First Out.

What happens on maturity?

When MOD is completed, the entire amount including interest is automatically transferred to the savings account.