Rules, tax & how-to
Savings Account vs FD vs Sweep-in
How much to keep in savings and how much in FDs — interest difference, liquidity and how an auto-sweep FD gives you both.
Updated 27 September 2026 · 26 banks trackedBest effective rate on ₹10 lakh
5.65%
IDFC FIRST BankWhat you need to know
A savings account gives instant access but usually only 2.5%–3% at large banks. A 1-year FD pays about 6%–7%. An auto-sweep (sweep-in) facility moves surplus above a threshold into FDs automatically and breaks them when you need money — often the best home for an emergency fund.
Comparison
| Savings account | Sweep-in FD | Fixed deposit | |
|---|---|---|---|
| Typical rate | 2.5% – 3% (large banks) | FD rate for days held | ≈ 6% – 7% (1 year) |
| Access | Instant | Instant (auto-break) | Penalty to break |
| Tax | Slab rate; 80TTA/80TTB (old regime) | Slab rate; TDS on FD part | Slab rate; TDS |
| Best for | Monthly spending | Emergency fund | Known goals |
Rule of thumb
- Keep 1–2 months of expenses in savings for bills and UPI.
- Keep 3–6 months of expenses as an emergency fund in a sweep-in FD.
- Put money for known goals in FDs matched to the date you need it.
Frequently asked questions
How much interest do I lose keeping ₹5 lakh in savings?
At 2.5% vs a 6.5% FD, about ₹20,000 a year before tax.
For information and comparison only. Confirm rates, charges and rules with your bank.