Private sector bank introduces ‘ActivMoney’ auto sweep account

Mumbai: Leading private sector lender, Kotak Mahindra Bank  launched ‘ActivMoney’ auto sweep account  for customers. The new account gives customers to the benefit of fixed deposit (FD)-like interest up to 7% per annum, and the flexibility to access their money at any time from the linked savings account. Auto sweep allows a savings account holder to earn higher interest as offered in FDs while retaining the liquidity offered by a saving account.

When a customer enables this facility, then when the balance in the savings or current account crosses a preset threshold, the excess amount is automatically used to open FDs for a pre-determined tenure (also called sweep-out). Similarly, when the savings account balance falls below a pre-determined limit, the linked FD(s) are automatically closed and the proceeds credited to the savings account to make up the deficit (also called sweep-in).

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Earlier several other banks including Axis Bank, HDFC Bank, ICICI Bank, and IndusInd Bank launched this auto-sweep option.