Central Bank of India Sweep-out FD

What is the Central Bank of India Sweep-out FD

The Central Bank of India sweep-out FD is an automatic facility where you can apply for this facility for sweeping out the required funds from the FD to a savings account. This feature allows you to link your savings or current account to a fixed deposit, and by not breaking the full FD, you continue to earn high returns from Central Bank of India FD interest rates and maximum returns on your surplus funds.

Advantages of the Central Bank of India Sweep-out FD

• Liquidity and Convenience: The entire process is automated. You don't need to manually monitor your savings account balance or open and close FDs. The bank's system handles the transfers, making it a hassle-free way to manage your savings and investments.
• Avoids Transaction Failures: The automatic sweep-out feature acts as a safety net. It ensures that your transactions, such as a large cheque payment, won't be declined due to insufficient funds in your savings account, thereby preventing potential penalties or embarrassment.
• No FD Breaking: The system typically uses a Last-In, First-Out (LIFO) method for the FD, where you don't need to break the full FD; just the latest part of it breaks, helping you avoid premature withdrawal.
• No change of Interest: The interest rate on the fixed deposit is the same as the prevailing rate for that specific deposit period.

How to Activate the Central Bank of India Sweep-out FD 

1. Online Activation 

   Activating a Central Bank of India sweep-out FD for the Cent Samvridhi Savings Account or Cent Samvridhi Current Account. Here are the typical online steps:

   • Netbanking: Go to the official Central Bank of India website 
   • Search for Open an Account Online: Look for "Open an Account Online" or "Video KYC" option.
   • Select the Right Account: Choose which mentions an "auto-sweep" or "sweep-out" facility, such as the Cent Samvridhi accounts.
   • Fill Out the Application: Complete the online application form with your personal details.
   • Complete Video KYC: The bank may use a Video KYC process to verify your identity
   • Set the Threshold: Set the threshold amount for your account
   • Review and Submit: Review all the details you have entered and submit the application.

2. Offline Activation 

   • Visit a Branch: Go to a Central Bank of India branch
   • Request Account: Ask to open a special account with an auto-sweep feature, such as the Cent Samvridhi Savings Account.
   • Complete Application: Fill out the account opening form with your personal details and submit your KYC documents.
   • Set Parameters: On the form, specify your initial deposit and the minimum balance threshold for the sweep-out feature.
   • Review and Sign: Review the completed form and sign to finalize the account setup.

Conclusion 

The Central Bank of India's sweep-out FD is a strategic financial facility designed to maximise returns on your savings while ensuring continued liquidity. As an inherent feature of specific accounts like the Cent Samvridhi Savings and Current Accounts, it automates the process of moving surplus funds into a higher-earning fixed deposit. The key advantage of this is that it automatically draws funds from the FD, with No Loss of Interest, and No Breaking the FD to cover any shortfall in your savings account.