SBI Credit Card - Auto debit vs auto sweep
- Thread starter seacher
- Start date
wcgxlr8
KF Mentor
It is usually useful for biz or HNIs with multiple accounts/credit accounts.
Company X has a line of credit with Bank B in the amount of $1 million. Currently, X is borrowing $300,000 of the $ 1 million, which needs to be repaid. X also has a savings account with Bank B that is used to make regular business payments or used for any other business purposes. Company X sets up a target balance that stipulates that any amount in the deposit account that is over $285,000 on any given day, can be used to pay down the outstanding $300,00 loan. During one week, on a Friday, the amount in the deposit account is $295,000, so Bank B uses the additional $10,000 above the target balance to pay down $10,000 of the $300,000 borrowed amount.
Company X has a line of credit with Bank B in the amount of $1 million. Currently, X is borrowing $300,000 of the $ 1 million, which needs to be repaid. X also has a savings account with Bank B that is used to make regular business payments or used for any other business purposes. Company X sets up a target balance that stipulates that any amount in the deposit account that is over $285,000 on any given day, can be used to pay down the outstanding $300,00 loan. During one week, on a Friday, the amount in the deposit account is $295,000, so Bank B uses the additional $10,000 above the target balance to pay down $10,000 of the $300,000 borrowed amount.
