How to increase income from Savings account?

Are you getting income from your savings account? If you have a lot of cash, lying idle in your savings Bank Account, and at the same time you don’t want to commit to long-term investment, and you still want to still gain some income from your account?

Then, you enable the Auto-Sweep facility in your Savings Bank account.

This will make sure you earn good interest on a major part on the cash lying in your Savings account.



What is Auto-Sweep Account ?

“Auto Sweep” is a facility which provides, the combined benefits of a Savings Bank account and fixed deposits. Auto-Sweep facility interlinks your saving bank account with a Deposit account and helps you to get extra amount on the money lying in your bank account.

 How ‘Auto Sweep’ works?

You need to define a “threshold limit”, and money up to that limit will be in the form of cash in your savings account and any amount above this, “limit” will be automatically be converted into a Fixed Deposit and you will start earning normal FD returns on that part of the money. At any point in time, if you need money more than is lying in your bank account, the money lying in the Fixed Deposits is Reversed-sweeped into your savings account and you can withdraw the amount you wish.

Example:

Suppose your account has Rs 1 lac for 1 year, it will earn 3.5% interest on it (for normal Savings bank account), which is Rs 3,500 for a year. However if you have auto-sweep enabled in your savings account with threshold limit of Rs 20,000, the additional 80,000 will actually be in form of a fixed deposit and it will earn an interest of 8% (varies with your bank). In this, you will earn 3.5% of 20,000 which turns out to be Rs 700 and 8% of 80,000 which is Rs 6,400 , a total of 7,100 , which is almost 100% more than the first case .

Facility in different banks

• IDBI Bank – Sweep-in Savings Account


• Axis Bank – Encash 24


• Union Bank – Union Flexi Deposit


• HDFC Bank – Super Saver Facility


• Bank of India – BOI Savings Plus Scheme


• Oriental Bank of Commerce – Flexi Fixed Deposit Scheme


• State Bank of India – Multi Option Deposit Scheme


• Allahabad Bank – Flexi-fix Deposit


• Bank of Maharashtra – Mixie Deposit Scheme


• Corporation Bank – Money Flex


• United Bank of India – United Bonanza Savings Scheme

 How it will help in tax deduction?

As per section 80TTA, Savings account interest up to Rs 10,000 is exempted from tax

A normal savings account cannot give such 10k interests..

So why waiting? Rush to your bank immediately and convert your savings account immediately.