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How Does Auto Sweep Help You Earn Interest on Idle Funds in Your Current Account
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A Current Account does not bear interest, but many businesses and professionals still keep large sums parked in it—for easy access, quick payments and daily operations. The downside? That idle money earns nothing, even if it sits untouched for weeks.
That’s where the auto-sweep facility comes in. A feature designed to quietly shift surplus funds into interest-earning deposits, without interrupting how you use your account. In this blog, we look at how this smart setup works and how it helps your money do more in the background—without disrupting your daily transactions.
Understanding the auto-sweep facility of a Kotak Current Account
Managing large sums in a Current Account can feel like a balancing act. You want liquidity but also don’t want idle money to earn nothing. That’s where the Auto-Sweep facility comes in—it helps your surplus funds earn interest, while keeping them easily accessible when you need them.
How the auto-sweep facility works
The Auto-Sweep facility links your Current Account with a Fixed Deposit (FD). You set a threshold limit (say Rs. 3,00,000). Any balance above that amount is automatically transferred into an FD. These FD starts earning interest at specific rates, unlike your Current Account which earns no interest.
When you need to make a withdrawal or payment that exceeds your available Current Account balance, the system automatically reverses the required amount from the FD. This feature is called reverse sweep-in and works in the background without manual intervention and without incurring any cost. So, your idle funds don’t sit idle—they work quietly, earning returns while remaining liquid.
Scenario 1: Managing seasonal business surpluses
Who it helps: Retailers, traders and businesses with high cash inflow during festivals or seasonal sales.
How it works:
Let’s say you’re a garment wholesaler who receives bulk payments in November and December. Your Current Account crosses Rs. 10,00,000 during this period, but you don’t need that entire amount immediately.
With Auto-Sweep activated and a Rs. 3,00,000 threshold, Rs. 7,00,000 gets moved to FDs, earning interest. In January, if your inventory payment of Rs. 5,00,000 comes up and your Current Account has only Rs. 3,50,000, the system will automatically move Rs. 1,50,000 from the FD to cover the transaction. No delays, no paperwork, no additional cost—just smarter money management.
Scenario 2: Startup managing investor funds efficiently
Who it helps: Founders and finance heads of early-stage startups.
How it works:
You’ve just raised a Rs. 2 Crore seed round. While your immediate burn rate is low, most of this capital sits in your Current Account.
Rather than let it remain idle, you set a sweep-in threshold at Rs. 5,00,000. Now, Rs. 1.95 Crore gets placed in short-term FDs, earning interest until you need it for expansion or marketing. If you suddenly need Rs. 10,00,000 for vendor payments, the system sweeps back the amount instantly from the FD.
It’s a way to be capital-efficient without sacrificing liquidity.
Scenario 3: Freelancers or consultants handling irregular payouts
Who it helps: Individuals who receive large, infrequent payments from clients.
How it works:
You’re a freelance UI/UX designer who just received a Rs. 7,50,000 payment for a 3-month project. Your monthly expenses rarely cross Rs. 1,00,000.
By setting a threshold at Rs. 2,00,000, the remaining Rs. 5,50,000 goes into an FD. Over the next few months, you withdraw what you need and if any payment overshoots your Current Account balance, the sweep-in pulls just the shortfall.
This way, your freelance earnings aren’t just sitting in a zero-interest account—they’re actively earning till you need them.
Kotak ActivMoney: Let your idle funds start earning effortlessly
Why let your money stay inactive when it can earn interest without any extra effort? With Kotak ActivMoney, your Current Account works harder by automatically transferring extra funds into interest-earning Fixed Deposits—while keeping them accessible whenever you need them. It’s seamless, smart and designed to give you more value from the money you already have. Ready to make your Current Account more rewarding? Activate Kotak ActivMoney today.
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