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SBI Raises Auto Sweep Limit to ₹50,000: Here’s How Customers Will Benefit

India’s largest public sector bank, the State Bank of India (SBI), has announced a significant change for its crores of account holders. The bank has revised the minimum threshold for its popular Auto Sweep facility, raising the limit from ₹35,000 to ₹50,000. This update directly impacts customers who use the Multi Option Deposit (MOD) feature, designed to help savings account holders earn higher returns on idle balances.

What is SBI’s Auto Sweep (MOD) Facility?

The Multi Option Deposit (MOD) scheme is a smart banking service that automatically transfers surplus funds from a savings account into a fixed deposit (FD). This means customers can enjoy higher interest rates than a regular savings account without the hassle of manually creating a fixed deposit.

For example, earlier if a customer’s account balance exceeded ₹35,000, the extra amount would be converted into an MOD. With the new rule, this threshold has been increased to ₹50,000. Only when the balance crosses ₹50,000 will the automatic transfer into MOD take place.

The facility also allows flexibility. If funds are required, SBI automatically channels money back from the MOD to the savings account. This process, known as reverse sweep, ensures that customers never face a shortage of liquidity while still benefiting from higher interest earnings.

Key Features of SBI MOD Scheme

1. Higher Interest Rates:
   MOD deposits earn more interest compared to regular savings accounts. The interest is compounded quarterly, ensuring better returns.

2. Reverse Sweep Facility:
   If account holders need funds, money is transferred back in multiples of ₹5,000. Withdrawals follow the Last In, First Out (LIFO) principle, meaning the latest MOD is broken first. Customers can also opt for First In, First Out (FIFO) if they prefer.

3. Partial or Full Withdrawal:
   Customers can withdraw partially or fully depending on their needs. The remaining amount continues to earn interest.

4. Maturity Benefits:
   Once an MOD matures, the principal plus interest is automatically credited back into the savings account.

5. TDS Applicable:
   Like other fixed deposits, interest earnings are subject to Tax Deducted at Source (TDS) under existing income tax rules.

How This Change Benefits Customers

The revised limit of ₹50,000 offers customers greater control over their liquidity. Those who prefer keeping slightly higher balances in their savings account will benefit, as the automatic sweep will now trigger at a higher threshold. This reduces frequent transfers into MOD for customers who regularly maintain balances between ₹35,000 and ₹50,000.

For long-term savers, the MOD feature continues to serve as a convenient way to maximize earnings without compromising on liquidity. By simply maintaining funds in their savings account, customers can enjoy fixed deposit-level returns without separately opening or managing an FD.

Special Advantage for Senior Citizens

SBI offers additional interest rates on MOD deposits for senior citizens, making the scheme even more attractive for retirees. However, for “super senior citizens” (above 80 years), no extra benefit is provided beyond the standard senior citizen rate.

Why MOD is Considered a Smart Option

• Better returns: Higher interest than savings account rates.

• Flexibility: Easy withdrawal whenever funds are needed.

• Convenience: No separate FD creation process.

• Liquidity: Automatic transfer back to the savings account in case of shortfall.

Final Takeaway

With the updated threshold, SBI’s Auto Sweep facility continues to strike a balance between savings account convenience and fixed deposit returns. Customers who prefer both liquidity and higher earnings can benefit greatly from this scheme. By raising the limit to ₹50,000, SBI has given its account holders more breathing space to manage their balances, making the facility even more customer-friendly.

As India’s largest bank, SBI’s move is expected to positively impact millions of customers who rely on MOD for both flexibility and financial growth.