Can one apply for an IPO from a sweep-in & out savings bank account? What is the meaning of both?
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- Updated On:02-Apr-2024
- Replies:1
Short Answer
There is no possibility of a user having a sweep in/out account linked to their IPO application. It would simply get rejected.
Detailed Answer
Let’s first understand the meaning of sweep in and out account. Firstly, it is a savings account. Its main function is to transfer money from your savings account to an FD whenever the balance exceeds a certain limit.
The limit is called the sweep-in limit. This account is thereby opened to help the holders save more money and earn interest by transferring it into an FD.
It is also called a Sweep-Out account because it works the other way as well. So, whenever your account has less money, a small portion will be automatically transferred from your FD. In short, your savings bank account will always have sufficient balance.
In an IPO application, the bank details that you might fill needs to be that of a savings account under your name. It’s required to have integrity with the other details that you might have given along with the application. However, when you look into the different types of bank account details that aren’t allowed, then-current, sweep in/out accounts aren’t allowed.
The account needs to be a normal savings account with the amount you are looking to invest in the IPO and linked to your Demat account. Ensure that you have the amount; if not, there are higher chances of the application being rejected, and there might be some penalties or fines for the insufficient funds in your account.
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Discussion (0)
Yes, you can apply for an IPO application under a minor or HUF's name, provided they have different PAN card numbers. Minors can open a Demat account with their parent’s PAN Card and bank account.
While applying for an IPO a person either uses the UPI or ASBA facility for the payment and in both the process the total amount of money remains blocked by the bank under a "Mandate" until the allotment process is finalized hence the amount remains in the bank account of the investor and only gets debited if he/she receives the allotment of the shares.
There are about 5 IPO applications that can submit through online net banking from one bank account. However, the number can change immensely from one bank to another.
Yes, you can apply for an IPO application for your family and friends through your savings bank account details. However, keep in mind that only five applications can be filled with the same bank account details.
Savings bank account is one of the most popular banking services. There is no maximum amount of money that needs to be maintained. A person is liable to keep any amount of money in the savings bank account.
A fixed deposit is one such financial instrument which will help you deposit a sum with a bank for a predetermined period of time and the bank pays an interest on that sum. In essence, it’s a way of lending money to a bank, the opposite of taking a loan. These are sometimes even referred to as bonds or term deposits.
If you are a Zerodha customer, you can apply for IPO online through Zerodha Console (Zerodha Back-office). The process for applying an IPO process has been explained in detail above. Here are few other answers to important queries that you may want to learn.
Public Provident Fund Scheme is a saving scheme that comes with tax benefits. Ministry of Finance introduced this scheme in the year 1968. The main objective of PPF is to encourage general people to mobilize their small savings. The interest offered on these schemes are not taxable. Precisely, PPF is an investment with non-taxable returns.
IPO or Initial Public Offering is the process through which a private company goes public by offering its shares to the public for the first time.
There are mainly 5 types of bank accounts in India. These include Savings account, Current account ,Fixed deposit account, Recurring deposit account and NRI accounts.