Kotak Mahindra Bank Sweep-out FD

What is Kotak Bank Sweep-out FD?

The Kotak Mahindra Bank Sweep-out facility automatically sweeps out funds above a threshold into your Current / Savings Account from a Fixed Deposit (FD) Account. In case of an inadequate balance in your account, the FD will be prematurely broken, and the amount required will be transferred to your account. This will enable customers to gain higher Kotak Bank FD interest rates on their savings.

Kotak Mahindra Bank Sweep-out FD is for the depositors who have a savings account with Kotak Bank. The NRE will have the FD period for 1 year. 

Advantages of Kotak Mahindra Bank Sweep-out FD

Kotak Mahindra Sweep-out facility comes up with plenty of facilities for its savings account holders. Read carefully to understand them better - 

• Liquidity: Enjoy the liquidity and flexibility of linking your savings or current account with the FD account.
• Customizable Threshold: You can typically set a threshold amount (for example, Rs. 25,000 for Kotak 811 accounts), and only the money above this limit will be swept into the FD. This gives you control over how much money you keep liquid in your savings account.
• No Lock-in Period on Swept Funds: The funds that are swept out from the FD back into your savings account are not subject to a lock-in period, as is the case with the underlying FD (e.g., 180 days with ActivMoney). You can have access to them whenever you require.
• No Manual Transaction Needed: The whole process is automated. After you activate ActivMoney and specify a threshold amount (e.g., Rs. 25,000 on some accounts), the bank automates the process of transferring excess funds from a linked FD to savings. You do not have to create FDs or manage FDs manually.
• No Penalty on Partial Premature Withdrawal: Kotak Mahindra Bank has no penalty on partial premature withdrawal of the FDs created using the ActivMoney facility. In case the funds are swept back into your account, you will just forfeit the FD interest on the particular amount that was broken.

How to Activate Kotak Bank Sweep-out FD Facility 

The steps to activate the online Kotak Mahindra Bank sweep-out FD facility and follow the steps to avoid any confusion - 

• Savings / Current Account: Apply for the Kotak Mahindra Bank Savings/ Current Account (if you don't have one).
• Kotak 811 Application: Log in to your Kotak account with your credentials
• Navigate to the “Bank” Tab: After logging in, go to the bank tab. 
• ActivMoney Options: Look for the ActivMoney option in the menu 
• Instructions: Some instructions will appear on the screen.
• Follow the instructions: You need to follow the on-screen instructions to activate the facility. 
• Confirm: Click on the confirm button to get it activated.

Conclusion

Kotak Mahindra Bank's auto sweep-out FD facility has the advantages of both a savings account and a fixed deposit. By automatically moving funds from FDs to savings accounts at the time of an emergency, ensuring complete liquidity without any penalty on partial premature withdrawal. This blend of high returns, liquidity, and automation makes ActivMoney an ideal financial tool for individuals who maintain a high balance in their accounts.