Mumbai: India’s largest public sector bank, State Bank of India (SBI), has announced a change to its Auto-Sweep (MOD) facility. The bank has increased the minimum threshold from Rs 35,000 to Rs 50,000.
SBI shared this update through emails to its customers. The message said, 'The minimum threshold limit for the auto sweep facility in Savings Bank accounts has been increased from Rs 35,000 to Rs 50,000. So, the next MOD (Multi Option Deposit) will be triggered at Rs 50,000.'
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The MOD facility is a special feature linked to your Savings Account. When the balance in your account goes above a certain limit, the extra money gets automatically transferred to a fixed deposit (FD). This is called an Auto-Sweep.
Now, with the new change, the auto-sweep will happen only when your balance crosses Rs 50,000, instead of the earlier Rs 35,000.
Why Is MOD Useful?
The main benefit of the MOD facility is that the extra money earns a higher FD interest rate, which is better than regular savings interest.
If you need money and your savings account balance is low, SBI will automatically pull money from your MOD deposit and credit it back into your account. This is called a reverse sweep.
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Interest on the MOD is paid quarterly or compounded, depending on the terms. If you withdraw early, you will get the interest for the actual period held, minus a small penalty.
The rest of your money in the MOD continues to earn FD interest, and TDS (Tax Deducted at Source) is also applied as per rules.
