Current Account Just Got Smarter with Auto-Sweep to Fixed Deposits

Imagine if the money sitting idle in your current account could start earning interest without you having to lift a finger. That’s exactly what Ujjivan Small Finance Bank’s new Auto Sweep Facility for its Business Maxima Current Account enables – surplus balances in your current account are automatically transferred into a fixed deposit (FD) so your idle cash generates returns.

Typically, current accounts pay zero interest on balances. Businesses often keep large sums in their current accounts for transactions but earn nothing on that money. The Auto Sweep Facility changes that by ensuring every rupee beyond a chosen threshold is put to work, earning higher interest like an FD while still remaining accessible for your day-to-day needs.

What is the Auto Sweep Facility?

An auto-sweep facility links your current account with a fixed deposit and automatically shuttles money between them to maximize returns. When your current account balance exceeds a predefined threshold, the surplus amount is "swept out" into a fixed deposit where it earns a higher interest rate. If your account balance runs low when you need to make a payment, the required funds are "swept in" from those fixed deposits back into the current account. Think of it as having the best of both worlds: you enjoy the liquidity of a current account and the interest income of a fixed deposit, without any manual intervention.

With an auto-sweep facility, surplus funds above a set limit move into an interest-earning fixed deposit, while remaining accessible for business needs. This way, your money works harder for you without sacrificing liquidity.

How Does Auto Sweep Work?

The auto-sweep feature works through a few simple steps behind the scenes:

1. Setting a Threshold

You decide a minimum balance that should always remain in your current account (with Ujjivan, the minimum threshold you can set is ₹4 lakhs). Any balance above this threshold is considered surplus.

2. Automatic Sweep-Out

At a set interval (Ujjivan’s system checks weekly, typically every Monday), any surplus above your threshold is automatically transferred from the current account into a fixed deposit. This way, the excess money starts earning FD interest without you having to manually invest it.

3. Automatic Sweep-In

If your current account needs funds – for example, a large payment exceeds your available balance – the system will automatically break the necessary fixed deposit and transfer the exact amount needed back into your account. You never have to worry about a shortfall; the sweep-in happens seamlessly so your payments go through without a hitch.

Key Features of the Auto Sweep Facility

• Automatic Sweep-Out of Surplus Funds
  Excess funds beyond your set threshold are automatically moved into an FD at regular intervals (every Monday). 
• Seamless Sweep-In on Shortfall
  If your current account balance falls below the threshold during a transaction, the needed amount is moved from your FDs to cover it. This ensures smooth transactions without any worry of payments getting declined.
• Customizable Threshold Limit
  You can choose the threshold balance according to your business needs (minimum ₹4 lakhs). In other words, you decide at what point excess funds should move to an FD, tailoring it to your cash flow.
• No Foreclosure Charges
  There are no penalties or fees for prematurely withdrawing funds from the sweep FDs. Breaking a sweep FD early won’t cost you anything.
• Partial FD Withdrawal Allowed
  Break the auto-sweep fixed deposit partially if needed, withdrawing only the required amount and leaving the rest intact. You continue earning interest on the remaining FD balance.

Benefits of Using Auto Sweep in Your Current Account

• Idle Money Earns Interest
  Funds that would otherwise sit idle now start generating returns. Surplus cash automatically moves into FDs with higher interest rates giving your business an earnings boost with no extra effort.
• Uncompromised Liquidity
  You don’t lose access to your money. If an unexpected expense arises or your business needs cash, the required amount is swept back instantly from the FD into your current account. There are no penalties on these withdrawals, so you enjoy FD-like interest without sacrificing liquidity.
• Effortless and Automated
  The entire process is automated, eliminating the manual task of moving funds in and out of deposits. This not only saves effort but also time.