If you have extra money lying idle in your Savings Account, wouldn’t it be great if it could earn you a higher interest rate like a Fixed Deposit (FD) while still being available whenever you need it?
That’s exactly what the Multi Option Deposit Scheme (MODS) of the State Bank of India (SBI) does.
In this blog, we’ll explain in easy-to-understand language what MODS is, its features, benefits, eligibility, and how it works.
What is Multi Option Deposit Scheme (MODS)?
The Multi Option Deposit Scheme (MODS) is a special type of Term Deposit (TDR/STDR) offered by SBI.
It is linked to your Savings Account through an Auto Sweep facility.
- When your Savings Account balance goes above ₹50,000, the extra money is automatically transferred into a Term Deposit (MODS).
- If your Savings Account doesn’t have enough money to make a payment, money is transferred back from the MODS deposit into your account (this is called Reverse Sweep).
In simple words: MODS helps you earn higher interest like FD on your extra money, while still keeping it liquid and accessible like a Savings Account.
Key Features of SBI MODS
Here are the main features of SBI’s Multi Option Deposit Scheme:
- Type of Account: TDR (Term Deposit) / STDR (Special Term Deposit)
- Purpose: To automatically move extra funds from your Savings Account into a Term Deposit, earning higher interest.
- Who Can Open: Any individual – single, joint, or minor (self or through guardian).
- Auto Sweep Facility Available For: Savings Plus, Salary Package, Wealth customers, and minors.
- Period of Deposit: Minimum 1 year, Maximum 5 years.
- Threshold Limit: Auto sweep starts when Savings balance crosses ₹50,000.
- Minimum Balance in Savings (Post Sweep): ₹35,000.
- Minimum MOD Amount: ₹15,000 (and in multiples of ₹5,000).
- Reverse Sweep / Withdrawal:
- Withdrawals in multiples of ₹5,000.
- Full reversal if the remaining balance is ₹15,000 or less.
- By default, withdrawals happen from the latest deposit first (LIFO), though FIFO option is available.
- Withdrawals in multiples of ₹5,000.
- Stand-Alone MODS: Customers can also create MODS directly, without auto sweep.
- Maximum Amount: No upper limit.
- Deposit Advice: Issued for stand-alone MODS. For auto sweep MODS, no advice is issued.
- Interest Payment:
- Paid quarterly (compounded).
- Premature withdrawal allowed, with penalty.
- Senior citizens get additional interest as per rules.
- Super senior citizens do not get extra benefit.
- Premature Penalty: As per bank’s existing rules.
- Loan/Overdraft Facility: Available against MODS.
- Nomination Facility: Same nomination as the linked Savings Account.
- KYC Compliance: Mandatory. Non-KYC compliant accounts cannot use auto sweep.
- Maturity: At maturity, the balance is transferred back to the linked Savings Account.
- TDS (Tax Deduction at Source): Applicable as per Income Tax Rules.
How Does MODS Work? (Example in Simple Words)
Let’s say you have a Savings Account with ₹80,000.
- Threshold for MODS is ₹50,000, and minimum Savings balance required is ₹35,000.
- Out of ₹80,000, ₹45,000 remains in your Savings Account (as per rule), and the extra ₹35,000 is moved into MODS deposit.
- Suppose you later make a big payment of ₹60,000 from your Savings Account.
- Your account only has ₹45,000 left.
- The system will automatically transfer ₹15,000 (in multiples of ₹5,000) from your MODS back into your Savings Account so that your payment goes through smoothly.
- Your account only has ₹45,000 left.
This way, your extra money earns FD interest but is still available whenever you need it.
Benefits of SBI MODS
- Higher interest rate than a normal Savings Account.
- Liquidity: Money is always available – reverse sweep ensures no payment bounces.
- Flexibility: Create stand-alone MODS deposits as well.
- Loan/OD facility available against MODS.
- Nomination facility linked with your Savings Account.
- No upper limit on the deposit amount.
- Auto sweep convenience – you don’t have to transfer money manually.
Who Should Opt for MODS?
- Salaried individuals with fluctuating balances.
- Business owners who maintain higher working capital in accounts.
- Families who want to save extra money without locking it fully in FDs.
- Parents managing minors’ accounts.
- Anyone who wants a balance of liquidity + higher interest.
Important Points to Remember
- Minimum MOD amount: ₹15,000
- Withdrawals in multiples of ₹5,000 only
- Penalty applies on premature withdrawal
- Senior Citizens get extra interest, but not Super Senior Citizens
- KYC compliance is mandatory
SBI MODS vs Normal FD vs Savings Account
| Feature | Savings Account | Fixed Deposit (FD) | MODS |
| Interest Rate | 2.70–3.50% (approx.) | Higher (depends on tenure) | Same as FD |
| Liquidity | High | Low (locked till maturity) | High (reverse sweep facility) |
| Auto Sweep | No | No | Yes |
| Partial Withdrawal | Yes (from balance only) | Not possible | Possible (in multiples of ₹5,000) |
| Best For | Daily expenses | Long-term savings | Smart savers needing both interest & liquidity |
Final Thoughts
The SBI Multi Option Deposit Scheme (MODS) is a smart way to maximize your idle money. It combines the safety and high returns of Fixed Deposits with the flexibility of Savings Accounts.
If you want your surplus money to work harder for you without losing liquidity, then SBI MODS is an excellent option.
Visit your nearest SBI branch or log in to SBI Online to activate the Auto Sweep facility today.
Also read-SBI Salary Package