HDFC Sweep in facitity - Charges.
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Being a investor, I am not a fan of FD’s
But since the market is ATH (All time high) I have redeemed some of my investments and some money parked in bank account.
Now, I can move this to debt/liquid funds but since the returns are low (may be less/more than FD) but I do not want to invest there (since it will be small time frame and lot of paper work) rather keep in bank account.
Now, Since Saving interest are -ve or 0 (adjusted to inflation) i want to park some in FD[which also is nearly 0 adjusted to inflation 
] (for small duration) as i will be again investing the same in stocks/mutual funds after market corrects.
Also, Please do not suggest me IDFC First or savings bank with 7% interest rates. (Even no risks, paper work i.e. IT returns make it difficult)
Now, HDFC Bank has sweep in facility. I want to know
1. Minimum Normal FD required to start sweep in.
2. How sweep in works – As far as i know, it is first in last out.
3. Charges on sweep in/sweep out.
4. If xx,xxx amount is sweeped out in less than week/months, will it give -ve returns (in-comparison to saving interest)
I will add more questions/doubts and will create a complete article about this once i get sufficient info even if it not that promising.
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for max savings account, will above 25k amount converted to fd? or above 1L?
In my experience, Every monday, excess amount over 1L goes to FD. Main account balance goes to negative for a few hrs or one day on spending any amount in excess of 1L, and eventually gets filled from FD. I tried it once about 2 weeks back, and there were no charges.
Somehow I was not comfortable with it since the tracking in my mind is not very clear. So not maintaining any excess balance in HDFC. I need to go to branch for opting out of auto sweep. I’m fine with the usual way of keeping the excess funds in manually created FDs.
On the paperwork/IT part, even the FDs created by auto sweep should be reported. Or am I missing something here?
No missing, everything has to be reported 
, I do not understand how keeping in SB makes IT returns difficult as OP mentioned.
Its better to go for IDFC first or Equitas b’cos(for short term or until u exhaust 10k exemption))
in case of Savings interest Rs10K is exempt under Section 80TTA
in auto-sweep in Rs10K interest exemption is not applicable as its kind of FD only
Even on Sweep in etc types u will have to pay tax on interest, how is it different from IDFC savings account?
You do not need to get data from 2 bank accounts
(See, its not a lot of paper work, But i dont prefer oprning x no. of accounts, primarily no one knows the charges in closing/maintaining the account)
.
Some clarifications -
1. I know interest earned from sweep-in needs to reported, this is fd only.
2. Paper work hear means, seeing the account balance of one extra account, learn about changing maintanance fees and closing account cost (if interest rates decreases)
3. I already have an account in HDFC and so funds are present there, no need to move funds. (Already using interest statement for tax)
4. Know that 10,000 is exempted via 80TTA
5. I somewhar agree with @chotabheem, that’s why i asked if sweep in we can get give -ve returns than savings.
I will do more calculations as per input.
I think I get how they calculate the FD. Once i spend time on this.
I will come back with the numbers.
Thanks Dimers, For past 1 year I am thinking to understand this (with numbers) but did not get time/am lazy. But, I kind of get inner feeling for starting it might be worst then savings in the same bank.
Also for simplcity, ignore the TTA part /assume person already earns 10K in interest.
@andromeda, interest should be reported, So, Charges could be like (less interest, and sometime it is less than savings)
So, There are points that need to be considered
https://www.hdfcbank.com/personal/resources...es
1. No interest for withdrawal/sweep-out before 7 days (The Minimum tenure for earning FD interest is 7 days.)
2. 1% low interest rates (In case of premature closure of Fixed Deposit (including sweep in / partial closure) the interest rate will be 1.00% below the contracted rate or the base rate applicable for the period the deposit has remained with the bank, whichever is lower.except for the deposits booked with tenor 7-14 days.)
So, Using this two above points it is evident, sweep will fetch you less for any holding less than 6 months.
Better do normal FD.
Ideally Sweep should fetch the interest rate as per the number of days it stayed as FD, unlike premature closure, because the customer didn’t really tell them in the first place that we creating FD so specific number of days.
I’m glad that my intuition didn’t go wrong
+kg
meri sweep account hai pnb mein. uska interest fd interest mein calculate hoga ya savings bank interest mein?
You will need to open a savings account in HDFC.
Any amount in excess of 1L is automatically converted to FD every Monday morning, with the prevailing interest on that Monday. This is called Sweep In FD.
You cannot reduce the 1L limit.
If you withdraw more than your savings account balance, the balance amount is automatically taken from the FD that was created last in line i.e. LIFO. There are charges when this happens.
There are no charges for the sweep in facility.
You get interest like any normal FD for the amount of days maintained. There is no rule like you have to maintain for a week/month.