SBI Raises Minimum Balance Requirement For Auto Sweep Facility To Rs 50,000

The State Bank of India (SBI) has revised the minimum balance requirement for its auto sweep facility in savings accounts. The threshold has been increased from Rs 35,000 to Rs 50,000. This change affects the Multi Option Deposit (MOD) scheme, which allows customers to earn higher interest by automatically transferring surplus funds into term deposits.

Understanding SBI's Multi Option Deposit Scheme

The SBI MOD scheme is designed to help account holders earn more interest compared to a regular savings account. When the balance in a savings account exceeds a certain limit, the excess amount is automatically moved into a fixed deposit. If there are insufficient funds in the savings account for transactions, money can be transferred back from the MOD.

According to SBI, "The basic feature of the SBI MOD scheme is to facilitate customers to gain a higher interest rate, out of the surplus funds above a threshold limit from the Savings Bank Account is transferred automatically to Term Deposits (MODS). In case the amount falls short in the Savings Bank Account for honouring the debit mandate, partial/ full withdrawal (reverse sweep) from term deposits will be executed and credited back into the Savings Bank Account."

SBI MOD Interest and Withdrawal Details

Interest on MODs is typically paid quarterly and compounded. If an MOD is broken before maturity, it incurs a penalty but continues earning interest at the original rate for any remaining amount. Tax Deducted at Source (TDS) applies as per regulations. Senior citizens benefit from additional interest rates, though super senior citizens do not receive this extra benefit.

As per SBI guidelines, "In units of Rs 5,000/- and in multiple thereof. When the outstanding balance in TDR reaches Rs 15,000/-, full amount reversal to SB, irrespective of requirement. The withdrawal of the unit will take place for the latest MOD made (LIFO). (Option is available for customers to choose FIFO or LIFO)"

Maturity Process for SBI MODs

Upon maturity of an SBI MOD deposit, any remaining balance including principal and interest minus withdrawals is automatically credited back into the linked savings account. This ensures that customers have easy access to their matured funds without needing further action.

SBI has communicated these changes via email notifications to its customers. The bank stated: "We inform that the minimum threshold limit for auto sweep facility in Savings Bank accounts has been increased from Rs 35,000/- to Rs 50,000/-. Hence, the next MOD (Multi Option Deposit) shall be triggered at Rs 50,000/-."