In which type of ‘Bank Account’ does the deposit in excess of a particular limit automatically get converted into a fixed deposit?

Correct option is D

The correct answer is the Multi Option Deposit Account (MOD Account). A MOD Account is a special type of deposit scheme where the balance in a savings or current account is linked to a fixed deposit. When the account balance exceeds a predefined threshold limit, the excess amount is automatically swept out and converted into a fixed deposit in units (often ₹1,000 or more).
This feature enables customers to earn higher interest (as per fixed deposit rates) while still enjoying liquidity. If the account holder needs funds, the FD units created under the MOD can be automatically broken to fulfill withdrawal requirements.
Thus, the correct option is (d) Multi Option Deposit Account.
Information Booster
1. MOD is also known as Auto Sweep Account.
2. Banks like SBI, HDFC, ICICI offer MOD or sweep-in facilities.
3. It combines benefits of savings account liquidity with fixed deposit interest rates.
4. Partial withdrawal from the fixed deposit units is allowed without breaking the entire FD.
5. Helps customers optimize idle funds for better returns.
Additional Information
· (a) Fixed Deposit Account: A traditional FD with no automatic sweep-in or sweep-out feature. Money must be deposited manually.
· (b) Term Deposit Account: Another name for fixed deposit; does not auto-convert excess balance.
· (c) Recurring Deposit Account: Involves monthly installment deposits, not automatic conversion of excess funds.