Earn more interest - Sweep in Fixed Deposit

Many of you must be knowing about it, others might have heard of it, but for those who are not yet aware of it, this article for them. All of us know of fixed deposits. Though they give us the opportunity to earn higher interests, they take away the flexibility of ready cash at disposal, which we many a times need to meet with unplanned expenses.

Sweep in fixed deposits come to our rescue in this case. We normally have to specify a minimum amount, above which the money will be transferred to a fixed deposit. In case you need money, you can withdraw it like you do from a normal savings account.

Here is an example: Udit earns 38000 per month. He needs Rs 16000 for his expenses this month but their is a possibility that he might have to lend the remaining to his friend. Hence he cannot put the remaining 22000 in a FD. What he can do is create a sweep in FD. He can specify the minimum limit as 14000 (assuming its his normal monthly expenditure). Any amount above it is automatically transferred to the FD, earning him much higher interest, which he would have lost out otherwise.

Sounds attractive..it is..go for it now.

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