DHFL Fixed Deposits

[lotmanythings]

Hi,

Ive just seen that Dewan Housing and Finance Ltd is offering Fixed Deposits at 9%. It is also rated by CARE as AA+ which means "very low risk."

I just wanted to confirm with experienced people here if it is wise to invest about 4-5 lakh in their fixed deposits. Since it is rated by CARE, I thought that it must be very much risk free.

Please make some suggestions..
Thanks,

 

[startrade]

Don't you think that there is too much risk involved here just for earning an extra 1.5% over what is offered by PSU banks? In India there are so many well known companies that have defaulted on repayment of FD on maturity and also on interest, that despite the fact that all such defaulter companies had good credit ratings at the time they took money from investors.

IDBI bank is offering 7.5% on 1100 day FD. You earn 1.5% less but your money is 100% safe in a sarkari bank,. So you have tension-free and good sleep in the night. Your can walk into the bank branch any day and break your bank FD in case of an emergency. While there is no liquidity incase you invest in the FD of any company.

IDBI bank is just an example. There are so many such banks out there. Think twice before investing in the FD of any NBFC.

 

[ashish908]

i invested in DHFL fixed deposit for 84 months in April 2010 selecting quarterly option of interest payment (selected the ECS option)
Please note my experience

a) I got the FDR on time
b) I was expecting the interested to be credited by ECS by 1st july 2010. The interest did not come on time
c) When i call the Corporate Office and ask for FD Department, they just hang up the phone
i tried for 5 times, same results
d) Calling up the Registered office and when i complaint about the receptionist of the Corporate office, they said that they are like that only and i was given the number of the fixed deposit department
e) upon contacting the fixed deposit department, i found that they misplaced my blank cancelled cheque and wanted me to send them again, they did not have answer on i) how was cheque misplaced?
ii) who will compensate for the delay?
iii) why was no communication send to my postal address or phone call not made?
f) After sincere assurances from the FD department that they will do the needful on a priority basis after they receive the blank cancelled copy of the cheque, they did not do anything

 

[pavvu_kk]

To add on what has been already said, an AA+ rating doesn't gaurentee that your money will come back. In fact, even in govt banks there is no gaurentee that your money will be returned to you. There is a possibility of defaulting. According to RBI guidelines, a depositor is entitled to a maximum of 1lac from govt in case the bank defaults.

Instead, why don't you put your money in MFs or direct stocks:thumb: unless you have a very short term goal? You are gaurenteed to get far better returns that the damn FD :clap:

 

[ashish908]

but mutual funds and stocks investing is very risky
what is left for people who wants safe returns

 

[pavvu_kk]

but mutual funds and stocks investing is very risky
what is left for people who wants safe returns

Then you are at a wrong forum, my friend!

 

[yodlee99]

I would suggest the good old post office for savings. Or else, try debt based mutual funds like Canara Robeco income, ICICI Prudential Long-term Reg etc.

Investing in a time-tested equity-diversified or balanced mutual fund is a wise decision for a) capital appreciation, b) hedge against inflation and c) protection of capital. Do some research on HDFC Top 200 or Prudence; Birla sunlife frontline equity; DSPBR Top 100 kind of funds. The returns should be better than the growth in GDP which is going to be 8-9% for next few years. Also, u get a fund manager who calls the day to day shots while u can focus on your job or biz and find ways to make more money in it.

 

[ajay_ijn]

To add on what has been already said, an AA+ rating doesn't gaurentee that your money will come back. In fact, even in govt banks there is no gaurentee that your money will be returned to you. There is a possibility of defaulting. According to RBI guidelines, a depositor is entitled to a maximum of 1lac from govt in case the bank defaults.

Instead, why don't you put your money in MFs or direct stocks:thumb: unless you have a very short term goal? You are gaurenteed to get far better returns that the damn FD :clap:

Imagine what position Indian govt, economy might be in if Govt banks were forced to default. combination of worst Soverign Debt crisis and subprime kindof crisis causing collapse of financial system, economy,govt financial health, ?
Somebody like US saved its own big private banks to rescue economy.

 

[magnet]

It have been discussed earlier

http://www.traderji.com/general-trading-investing-chat/39726-companies-whose-fds-have-gone-bad.html

Also u need to check the response here too

http://www.jagoinvestor.com/2010/04/are-company-fixed-deposit-safe.html

Regarding safety


1::Invest in good company with strong fundamental...Like mahindra and of tata motors...

2:: Dont make a 5 year commitment on such stuffs...at max 2 years....

3:: Dont go for extra high return compnies like giving 13,14 and 15% interest....And of those whose name u havent heard

4:su banks give the lowest interest than any pvt banks....So investing in fds is better...But even better is stock...but invest in sound companies like TCS,wipro Reliance....But dont depend totally on that investment...Its good for money to grow but forget presently type....E.g my experience....When tcs started i invested in just 5 shares of it at 875 buks per share....Later dividend use to come every now and than...100-150 buks per year to be precise..And today i check that 5 shares have been converted to 20 now with price still being same ...In % wise good return

5::Even banks can default.....Govt only safeguard upto 1 lakh of the investment no matter how much above the sum u have...But banks which defaulted govt failed even to pay this basic 1 lakh...in case of kapol bank...Recently their was this news coming to raise the bar atleast to 2.5 lakhs...because of recession type stuff but govt didnot budge

Bottomline:: Its a good fd...but invest at max for 1 year...And ya dont invest more than 40-50k it...Company fds cut TDS at 5k annual interest...u need to check how good are they in giving u tds certificate on time....Another 40-50k u can invest in jp associates and unitech fd..provided u have their shares...They also are not fly by night type operator....But never make big investment ever in 1 company.....Personally my mom holds investment in tata motors fd for whose 1 year got completed we kept it for 3 years...Fd interest came on time in account...But initially it took 2 months to receive basic letter of investment ...We were worried whether we lost our money or not...