SBI MODS: The biggest bank in the country, State Bank of India (SBI), has introduced a significant update to its auto-sweep scheme, known as MOD (Multi Option Deposit). To take advantage of this facility now, you need to keep a minimum balance of Rs 50,000 in your savings account. Previously, this threshold was Rs 35,000.
This means that the scheme will still provide better returns for those who maintain higher balances. The returns from SBI’s Multi Option Deposit Scheme are comparable to those of fixed deposits (FDs), but unlike FDs, investors can withdraw their money at any time. In an FD, your money is locked for a set period, while in this scheme, it stays in your account.
Actually, SBI’s Multi-Option Deposit Scheme is connected to a customer’s current or savings account. This setup allows customers to access their funds whenever they need them. Any leftover funds are treated as fixed deposits. The Multi-Option Deposit Scheme requires you to establish a limit. If your balance goes over this limit, it automatically turns into fixed deposits. You earn interest on the excess funds just like you would with a fixed deposit.
Advantages of MODS
1. Interest like FD: When you invest in the Multi Option Deposit Scheme, you earn high interest similar to that of a fixed deposit.
2. Instant withdrawals – You can take out funds directly from an ATM or via check, just like you would with a savings account. There are no penalties involved.
3. More convenience than an FD – If you break an FD, you lose the entire amount and face a penalty. But with this scheme, you can withdraw only what you need, and the rest continues to earn interest, just like an FD.
4. Transactions in multiples of 1,000 – With the Multi Option Deposit Scheme, you can deposit or withdraw funds in increments of 1,000. There’s no limit on withdrawals.