Savings Accounts with FD-like Interest: Unlock Higher Returns and Liquidity

• Many banks now offer 'high-interest savings accounts' or 'auto-sweep accounts' that provide FD-equivalent interest rates while maintaining liquidity.
• Auto-sweep accounts automatically convert funds above a set limit into a linked Fixed Deposit, earning higher interest.
• This facility allows instant access to funds by automatically breaking the FD when needed, avoiding penalties for early withdrawal.
• Benefits include higher interest earnings on idle savings, maintaining liquidity, and avoiding the hassle of managing separate FDs.
• Disadvantages can include taxability of interest, potentially lower rates than regular FDs, and penalties for premature closure if the balance drops.

Why It Matters: Auto-sweep savings accounts offer the best of both worlds: high FD-like interest rates and easy access to funds.