Bank of India sweep-out FD

What is the Bank of India sweep-out FD?

Bank of India sweep-out FD is a facility where, if your savings account balance falls below the required threshold due to a transaction (e.g., a cheque payment or ATM withdrawal), the necessary funds are automatically swept in from the linked FD to cover the shortfall. The primary goal is to provide customers with high liquidity in a savings account while allowing them to earn higher Bank of India FD interest rates.

Advantages of Bank of India Sweep-out FD

Some of the important advantages and benefits of the Bank of India sweep-out FD facility are given below.

• Higher Interest: Your surplus money automatically moves from your FD to a low-interest savings account, maximising your earnings.
• High Liquidity: You can access your funds at any time, as the feature automatically transfers money back to your savings account when you need it, without you having to manually break the FD.
• No Penalty on Reverse Sweep: The bank typically does not charge a penalty for breaking a portion of the FD when funds are automatically swept out from the FD to your savings account to cover a shortfall.
• Convenience: The process is fully automated. Once you set up the account, you don't need to worry about manually managing transfers between your savings and FD.
• Partial Withdrawal: In sweep out FD, premature closure only withdraws the required amount, allowing the rest of the deposit to continue earning interest.

How to Activate the Bank of India sweep-out FD

Depositors can activate the sweep-out feature online or offline. Here are the details: 

1. Online Activation

   Bank of India does not appear to offer a direct online facility to activate the sweep-out/flexi-deposit feature on an existing standard savings account. The sweep-out feature is tied to specific, dedicated account products designed for this purpose.

   •  Open a Dedicated Account: Open a savings account linked with your FD to enable the sweep-out facility. 
   •  Link FD with Savings Account: Once your savings account is active, link it with FD by setting auto sweep threshold and conditions under . 
   •  Fill the Application Form: You will need to fill out an application form and provide the necessary KYC documents.
   •  Explain the Requirements: By visiting the branch, explain the threshold amount, minimum balance, and other important details.

2. Offline Activation

   To activate the Bank of India sweep-out FD offline, you need to follow the steps given below: 

   • Visit a Bank Branch: To activate the sweep-out facility, you must visit your nearest Bank of India branch.
   • Open a Dedicated Account: You will need to open a special account, such as the BOI Savings Plus Scheme, which is designed to automatically link your surplus funds to a fixed deposit.
   • Fill Out the Application Form: A bank representative will assist you in filling out the application form for the designated account type.
   • Provide KYC Documents: Submit the necessary Know Your Customer (KYC) documents, such as your Aadhaar card, PAN card, and proof of address.
   • Explain Requirements: Clearly communicate your preferences regarding the threshold amount and any other specific requirements for the sweep-out feature.

Conclusion 

Bank of India's sweep-out FD facility is for individuals and businesses who typically use their account for different kinds of transactions. It effectively addresses a common problem: transaction failure due to insufficient funds in a savings account. The primary benefits of this facility are its ability to maximise interest earnings and provide convenient, automatic access to funds without the need for manual transfers or premature withdrawal penalties on the swept-out amount.