SBI Auto Sweep Interest Rate Calculator

Compound Interest Formula:

\[ A = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Principal Amount (P):

₹

Annual Interest Rate (r):

Compounding Frequency (n):

Time Period (t):

years

Future Value (A):

Interest Earned:

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1. What is SBI Auto Sweep Account?

An SBI Auto Sweep account automatically transfers excess funds from a savings account to a fixed deposit, earning higher interest rates while maintaining liquidity. This calculator helps estimate the compound interest earned through this facility.

2. How Does Compound Interest Work?

The calculator uses the compound interest formula:

\[ A = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Where:

\( A \) — Future value of investment (₹)
\( P \) — Principal amount (₹)
\( r \) — Annual interest rate (decimal)
\( n \) — Compounding frequency per year
\( t \) — Time period in years

Explanation: Interest is calculated on both the initial principal and accumulated interest from previous periods, leading to exponential growth.

3. Importance of Compounding Frequency

Details: More frequent compounding (monthly vs annually) results in higher returns due to interest being calculated and added to the principal more often.

4. Using the Calculator

Tips: Enter principal amount in rupees, annual interest rate as percentage, select compounding frequency, and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the current SBI Auto Sweep interest rate?
A: Interest rates vary and are subject to change. Please check SBI's official website for current rates applicable to auto sweep fixed deposits.

Q2: How does auto sweep differ from regular FD?
A: Auto sweep automatically creates FDs from excess savings balance, providing higher returns while maintaining instant access to funds through reverse sweep.

Q3: Is there a penalty for premature withdrawal?
A: SBI may charge a penalty for premature closure of auto sweep FDs, typically 0.5-1% lower than the contracted rate.

Q4: What is the minimum balance for auto sweep?
A: The minimum threshold amount varies by account type, typically starting from ₹25,000-₹50,000 for the sweep-in facility to activate.

Q5: Are auto sweep accounts taxable?
A: Yes, interest earned is taxable under Income Tax Act, and TDS is deducted if interest exceeds ₹40,000 (₹50,000 for senior citizens) annually.