HDFC Bank - Fixed Deposit (FD) Sweep-in

FD don't have flat rates.. FD rates are in the incremental fashion..  if you are getting 6.5% in 2 years..

So it will start with around 2.5% for the first 7-14 days and gradually increase to 6.5% at the end of your tenure..

So if you sweep fd after 5 days.. you might not get any interest or will get around 2.5%

If you don't have this facility of sweep in, they generally charge 1% of current interest rate as penalty.. if your FD is 6 months old and current rate in that fd is 4.5%.. they will give you interest at 3.5%

it will be deducted/broken from FD amount and I'll get interest at 6.5% p.a. for 5 days, is that true? - He is right.
That's the benefit of sweep-in facility. It will keep on calculating the interest on your current FD balance. Also, until and unless you use your entire FD amount before it matures you won't be penalised as well. (This was the info given to me by my advisor)

Sweep in is not unique to HDFC...

Interest of 6.5% for 5 days is not true.

FD interest is based on number of days money is kept in FD. Eg you have created FD of 15 months at 7% interest, now say after 5 days some amount assume 1000 was sweep into linked saving amount...Than this 1000 rs will earn interest that is applicable for (5 days - 0.5 % penalty) or original Interest 7% - 0.5% which ever is lower... Amount still in FD continue to be under 7% interest 

Sweep in amount is same as premature withdrawal with all penalty (which is on interest part)

MrKool_JJ wrote:

it will be deducted/broken from FD amount and I'll get interest at 6.5% p.a. for 5 days, is that true? - He is right.
That's the benefit of sweep-in facility. It will keep on calculating the interest on your current FD balance. Also, until and unless you use your entire FD amount before it matures you won't be penalised as well. (This was the info given to me by my advisor)

I guess what you and I were told is wrong.

I specifically said this to my RM that it sounds too good to be true. Found this on website :

So, basically, everything is same, the only difference I see with sweep-in facility is that as and when excess amount is needed, that amount in multiple of Re. 1 will be withdrawn from FD. The premature withdrawal rules stay applicable.

For such nonsense, I'm better off parking my idle funds over 1 lac in Bandhan Bank savings account at 6% p.a.

Never go for such sweep in - out.   At the last- Your pass book will be too messy. And actual interest will be too difficult to keep track on. 

sahil1033 wrote:
I guess what you and I were told is wrong.

I specifically said this to my RM that it sounds too good to be true. Found this on website :

So, basically, everything is same, the only difference I see with sweep-in facility is that as and when excess amount is needed, that amount in multiple of Re. 1 will be withdrawn from FD. The premature withdrawal rules stay applicable.

For such nonsense, I'm better off parking my idle funds over 1 lac in Bandhan Bank savings account at 6% p.a.

Bit confusing for me so what if i withdraw 50k out of 1lakh secured in FD and enabled for sweep-in?
Tnc says i'll be penalised with 1% only....

MrKool_JJ wrote:
Bit confusing for me so what if i withdraw 50k out of 1lakh secured in FD and enabled for sweep-in?
Tnc says i'll be penalised with 1% only....

I guess, the only advantage sweep-in gives is, one can withdraw amount from FD in multiple of Re. 1 and the remainder amount shall stay invested.

And for the amount withdrawn from FD, the standard penalty of 1% on interest rate shall apply for the number of days that amount stayed invested.

All of this is really messed up, how can one give such false information. Interestingly, what I was told yesterday when I called up phonebanking service was altogether different. They said that, say, one withdraws 50k out of 1L FD with sweep-in enabled, if that 50k isn't added back, the whole FD will liquidate and if 50k is added back, the FD will stay continued and that amount will be added back to FD. According to phonebanking representative, sweep-in is like any other FD with 24 hours of mercy time to save your FD from liquidating/breaking.

I'm much much better off keeping excess liquid money in Bandhan Bank savings account at 6% p.a.

Sweep-in is same as liquidating an FD (partially or fully). The advantage HDFC is giving is that you can do a partial liquidation if you need only part of the FD amount. The amount of interest you will get on the liquidated amount will be based on the rate of interest at the time the FD was created minus 1 percent, minus TDS and will be calculated for the number of days the liquidated amount was kept in FD.

You can test this by clicking Liquidate FD in Netbanking and choosing a particular FD. Before you can click the confirm button, it will show you a page with all the details (rate of interest, interest amount, etc). Do not hit the confirm button!!!

sahil1033 wrote:
I guess, the only advantage sweep-in gives is, one can withdraw amount from FD in multiple of Re. 1 and the remainder amount shall stay invested.

And for the amount withdrawn from FD, the standard penalty of 1% on interest rate shall apply for the number of days that amount stayed invested.

All of this is really messed up, how can one give such false information. Interestingly, what I was told yesterday when I called up phonebanking service was altogether different. They said that, say, one withdraws 50k out of 1L FD with sweep-in enabled, if that 50k isn't added back, the whole FD will liquidate and if 50k is added back, the FD will stay continued and that amount will be added back to FD. According to phonebanking representative, sweep-in is like any other FD with 24 hours of mercy time to save your FD from liquidating/breaking.

I'm much much better off keeping excess liquid money in Bandhan Bank savings account at 6% p.a.

This is so confusing
@ontherocks