SBI Raises Auto Sweep Deposit Threshold to ₹50,000: Key Changes & Benefits for Investors [September 2025]

SBI Raises Auto Sweep Deposit Threshold to ₹50,000: Here’s What It Means for Investors

India’s largest public lender, the State Bank of India (SBI), has announced a significant update to its popular auto sweep facility for savings account holders.

SBI Raises Auto Sweep Deposit Threshold to ₹50,000:

As of September 2025, the minimum threshold for triggering an auto sweep into the bank’s Multi Option Deposit (MOD) scheme has been increased from ₹35,000 to ₹50,000.

sbi services customers

This change is attracting the attention of investors and personal finance enthusiasts across the country.

But what does this new rule mean, and how does it impact SBI customers? Here’s a complete breakdown for investors looking to optimize their bank returns.

Understanding SBI’s Auto Sweep Facility

The auto sweep facility—also known as the Multi Option Deposit (MOD) scheme—is a smart way for savings account holders to maximize returns on idle funds while maintaining liquidity.

Whenever the balance in an eligible SBI savings account exceeds a preset threshold, the surplus amount is automatically transferred into a MOD account—essentially a fixed deposit linked to the main account.

This system allows customers to earn higher fixed deposit interest rates on excess funds without the inconvenience of manually opening new FDs. At the same time, customers retain easy access to their money through a facility known as “reverse sweep.” When the savings account needs a top-up—for example, if a debit mandate or withdrawal exceeds the available funds—money is automatically transferred back from the MOD to satisfy the requirement.

What’s Changed: New Threshold Explained

Previously, the minimum balance required to trigger the MOD auto sweep was ₹35,000.

Under the revised rules, the threshold has been increased to ₹50,000. Now, only when the balance in a customer’s savings account crosses ₹50,000 will the excess (in multiples of ₹1,000) be swept into the MOD fixed deposit.

For example, if the savings account has a balance of ₹55,000, then ₹5,000 will be transferred into a term deposit, leaving ₹50,000 in the savings account.

Funds in MOD accounts continue to earn prevailing SBI fixed deposit interest rates, which are typically higher than simple savings account rates.

Why Did SBI Raise the Threshold?

SBI’s decision to increase the trigger threshold likely reflects the bank’s strategy to manage liquidity while incentivizing higher account balances.

By keeping the threshold higher, smaller or moderate balances stay in the regular savings account, and only significant surplus money earns the fixed deposit rate. This move may also help SBI manage the costs associated with frequent, small MOD sweeps.

Who Benefits (and Who Loses)?

• Regular savers: If only maintaining balances a little above ₹35,000, these customers may find the threshold harder to cross. They might not earn the extra FD interest as before unless their balances grow.

• High-balance customers: For those regularly holding more than ₹50,000, the auto sweep facility continues to serve as an efficient tool to maximize returns on surplus funds, making the process seamless.

• Senior citizens: SBI continues to offer additional interest rates on MOD deposits for senior citizens, which can be particularly beneficial for retirees or those dependent on interest income.

• Investors with fluctuating needs: The reverse sweep ensures liquidity, since any shortfall in the account is automatically covered by transferring funds back from the MOD without manual intervention or paperwork.

How to Use the MOD Auto Sweep Facility

Activating the MOD facility is straightforward.

Eligible salaried, NRI, and wealth customers can request the facility at SBI branches or via the bank’s online platforms.

Here’s what to consider:

• The auto sweep is triggered only when the threshold is exceeded.

• Surplus is transferred in units of ₹1,000.

• Interest on MODs is compounded quarterly and paid at maturity.

• Premature withdrawals attract a nominal penalty on the portion withdrawn. The rest of the deposit continues to earn at the promised rate.

• TDS (tax deducted at source) applies as per standard FD rules.

Impact on Savings and Investment Strategies

For disciplined savers, the move encourages accumulation of higher balances to take advantage of the auto sweep. Investors looking to balance liquidity with returns will see the MOD as a convenient middle path—combining the accessibility of savings with the higher yields of term deposits.

• It’s recommended to review account balances regularly so as to benefit from the auto sweep.

• Consider the threshold when planning monthly budgets or automatic debits to maximize interest income.

• Senior citizens should check if additional interest rates are credited automatically or require special registration.

Frequently Asked Questions

Q1: What happens if my savings account falls below ₹50,000 after a sweep?
A1: Funds above ₹50,000 will have been transferred to MOD.

If the savings account balance is insufficient, SBI will transfer funds back from the MOD to cover the withdrawal or debit.

Q2: Can I break my MOD deposit before maturity?
A2: Yes. Premature withdrawals are allowed, but a small penalty may apply to the withdrawn portion only. The remaining balance continues to earn the contracted FD rate.

Q3: Is TDS applicable on MOD interest?
A3: Yes, TDS is deducted as per prevailing laws, similar to regular fixed deposits.

Conclusion

SBI’s step to raise the auto sweep deposit threshold to ₹50,000 in September 2025 will encourage higher balances in savings accounts, and enhance the benefits of the MOD scheme for investors with larger surplus funds.

Savvy account holders can use this feature to maximize returns while staying flexible with their money.

Be sure to check with SBI about the latest terms—and adjust savings strategies to take full advantage of these changes.