A Flexi Fixed Deposit facility allows a depositor in the FD to transfer money from savings bank or current account, with which the FD is linked, to the FD and vice versa. It is also known as Sweep in-Sweep out facility or auto sweep facility.
A depositor can instruct the bank to transfer any excess amount from the Savings Banks account to an FD, for tenure of 1 year. This transferred amount earns a higher rate of return compared to a Savings Bank Account. Most Savings Bank Accounts offer 3.5% interest a year.
If there is insufficient balance in a savings bank account or current account, as per the depositor’s instructions, funds will be swept from the fixed deposit into that account.
You can make a withdrawal from these Fixed Deposits for any emergencies, without affecting your savings or even breaking the deposit. Interest will only be lost on the amount that’s swept and not on the full deposit.