Indian Stock Market and Mutual Funds

[TEUser2K1]

I want it reinvested.
I might get the Shriram finance too renewed for 1 year or 1 year 3 months (it has little more interest).

New RBI directive to banks, NBFCs to ensure nomination in FDs, saving accounts: Check details

Nomination: To avoid undue hardship to survivors/ family members of deceased depositors, the RBI has asked banks to obtain nomination in case of all existing and new customers having fixed deposit accounts, savings accounts, and safety lockers.

economictimes.indiatimes.com

 

[raksrules]

The penalty is a 1% reduction in the accumulated interest based on the time period until when the FD is broken. It is not as if you are losing the principal if the FD gets auto-renewed. Depends on your risk apetite but even small finance banks have insurance with DGIC of upto 5 lakhs and thus are a relatively sage option for investments upto that amount for at least 100-200 basis points over what the big banks offer.

I agree on the small finance bank but which is good once among those? Because chances of small finance banks going belly up is more compared to large banks or PSU banks.

 

[t3chg33k]

I agree on the small finance bank but which is good once among those? Because chances of small finance banks going belly up is more compared to large banks or PSU banks.

Lots of them now tie up with various finance apps so you can open it online from within those apps after vKYC. However, they do run a higher NPA and those with higher NPA offer a higher rate. It comes down to how much you can trust the DICGC process to work when things go wrong.

I would normally use the RBI data on NPA to Advances to make an informative decision since recommending a specific one can backfire.

https://data.rbi.org.in/DBIE/#/dbie...ncial Sector/Banking - Performance Indicators

 

[burntwingzZz]

I agree on the small finance bank but which is good once among those? Because chances of small finance banks going belly up is more compared to large banks or PSU banks.

Stable Money - Earn Up to 9.5% with High-Yield Fixed Deposits

Explore Stable Money's fixed deposit offerings with interest rates up to 9.5%. Invest with confidence and watch your savings grow through our secure, high-return FDs, tailored for financial excellence and stability.

stablemoney.in

investment should be on not more than 5 lakh

 

[t3chg33k]

Stable Money - Earn Up to 9.5% with High-Yield Fixed Deposits

Explore Stable Money's fixed deposit offerings with interest rates up to 9.5%. Invest with confidence and watch your savings grow through our secure, high-return FDs, tailored for financial excellence and stability.

stablemoney.in

investment should be on not more than 5 lakh

Hence, theoretically you can put in principal + interest of upto 5 lakh in each bank. However, for example, North East Small Finance Bank has the highest rate and seems to be the most popular on such FD platforms, but they have nearly 12% of their advances as NPA. Simply more likelihood of things going wrong with such a bank.

Anyway best to read the RBI FAQ on this to be clear on the coverage.

Reserve Bank of India

 

[burntwingzZz]

Hence, theoretically you can put in principal + interest of upto 5 lakh in each bank. However, for example, North East Small Finance Bank has the highest rate and seems to be the most popular on such FD platforms, but they have nearly 12% of their advances as NPA. Simply more likelihood of things going wrong with such a bank.

Anyway best to read the RBI FAQ on this to be clear on the coverage.

Reserve Bank of India

i proposed the website which gives you options to directly invest in multibank FD.I didnt recommend a particular bank to invest

 

[t3chg33k]

i proposed the website which gives you options to directly invest in multibank FD.I didnt recommend a particular bank to invest

Yes, just wanted to mention the risks of going only for the highest rate considering DICGC insurance. Should do due diligence before investing. The process states that the insured amount is to be credited within 90 days in case of bankruptcy, but it is difficult to say how it will pan out in reality.

 

[zeta30]

Why is there so much dip this month??
Shouldn't the american economy rise help us too. Most businesses here trade with america.

 

[?dOuBtFiRe?]

Fall before the Rise, Fall in January, Rise in Feb, meteoric rise. To show a huge percentage, it has to fall huge....Feb Budget.

 

[burntwingzZz]

Why is there so much dip this month??
Shouldn't the american economy rise help us too. Most businesses here trade with america.

Not necessarily our markets are overpriced and people too are sitting fence with respect o investing as well as they are not spending due to unnecessary high double/taxesTrying to strong arm the government. Europe is in crisis German auto companies are crippled their energy security is all over the place, name any other large country which is in a good shape ?

America has all time high debt ( bond yeilds are at high ) but its still far from wars on its shore ,energy security is in place for its people ,Israel-gaza situation has reached to a ceasefire .Syrian/BGD gov has been toppled. Ukraine-Russia to will get negotiated .Iran is being clipped .They managed to get TSMC cutting edge fab on their shore so basically they are in much much better situation .And trump is going to clean up their internal mess and i guess US is long due to upgrade their internal infra. So why wont investors flock over there

 

[zeta30]

Not necessarily our markets are overpriced and people too are sitting fence with respect o investing as well as they are not spending due to unnecessary high double/taxesTrying to strong arm the government. Europe is in crisis German auto companies are crippled their energy security is all over the place, name any other large country which is in a good shape ?

America has all time high debt ( bond yeilds are at high ) but its still far from wars on its shore ,energy security is in place for its people ,Israel-gaza situation has reached to a ceasefire .Syrian/BGD gov has been toppled. Ukraine-Russia to will get negotiated .Iran is being clipped .They managed to get TSMC cutting edge fab on their shore so basically they are in much much better situation .And trump is going to clean up their internal mess and i guess US is long due to upgrade their internal infra. So why wont investors flock over there

Do you think one should invest in this fiscal year??or should one cash out?
Also feb budget impact

 

[burntwingzZz]

Good share at correct/undervalue can be bought if looking for long-term,it would be also applicable for MF. Sorry to all those covid era investors who saw 40-60-90 % profits .What you were seeing was euphoria current situation is the reality of stocks.

 

[guest_999]

I agree on the small finance bank but which is good once among those? Because chances of small finance banks going belly up is more compared to large banks or PSU banks.

Lots of them now tie up with various finance apps so you can open it online from within those apps after vKYC. However, they do run a higher NPA and those with higher NPA offer a higher rate. It comes down to how much you can trust the DICGC process to work when things go wrong.

I would normally use the RBI data on NPA to Advances to make an informative decision since recommending a specific one can backfire.

https://data.rbi.org.in/DBIE/#/dbie...ncial Sector/Banking - Performance Indicators

Stable Money - Earn Up to 9.5% with High-Yield Fixed Deposits

Explore Stable Money's fixed deposit offerings with interest rates up to 9.5%. Invest with confidence and watch your savings grow through our secure, high-return FDs, tailored for financial excellence and stability.

stablemoney.in

investment should be on not more than 5 lakh

DICGC Insurance only comes into effect after rbi declares a bank "bankrupt" (yeah hard to miss the irony) & since independence RBI has not done it for any scheduled commercial bank because it paints a very negative picture of banking sector. What RBI does is either merge the troubled bank with some other bank (standard mode for almost any bank) or in exceptional cases when the bank is too big (Yes Bank) a consortium of banks is formed for the rescue. In either case the money of depositors remain safe with 2-3 weeks of moratorium on withdrawal. Also, since independence only 3 scheduled commercial banks have failed/rescued in this manner: Global Trust Bank (used by infamous Ketan Parekh in share market scam of 1998-2001 & eventually merged with Oriental Bank of Commerce), Laxmi Vilas Bank (merged with DBS India bank) & Yes Bank (saved by a consortium of banks). In today's times it will take a bank at least a few months to sink in India & during those months the bank will remain regularly in news so pretty hard to miss it. Of course all this does not account for the "mental tension" which depending on the situation at the time might not be worth earning 1-2% extra so decide accordingly.

 

[Neotheone]

My wife has 11L Rupees in 3 different FDs of 4L + 4L + 3L. Now, I make sure never to use this money to invest in stocks or equity at all. It is purely for emergency or debt portion. She is not working so doesn't have any income per se apart from dividend income (max 4-5K per year and that too if the stock gives else even less) and if I harvest LTCG every year on her equity mutual funds (which I know is not added to her primary income).

I was thinking of investing all these 11L in Liquid Fund due to its low risk. Is this a sane approach?

Yes, it is a very good idea but ideally pick a fund that invests in overnight CBLO/very short-term government securities.

 

[raksrules]

Yes, it is a very good idea but ideally pick a fund that invests in overnight CBLO/very short-term government securities.

Yes I do have some 4L (separate from the mentioned 11L) in overnight fund which I need in 1 month. I kept it in overnight fund just for capital protection and whatever little appreciation I can get.

 

[t3chg33k]

DICGC Insurance only comes into effect after rbi declares a bank "bankrupt" (yeah hard to miss the irony) & since independence RBI has not done it for any scheduled commercial bank because it paints a very negative picture of banking sector. What RBI does is either merge the troubled bank with some other bank (standard mode for almost any bank) or in exceptional cases when the bank is too big (Yes Bank) a consortium of banks is formed for the rescue. In either case the money of depositors remain safe with 2-3 weeks of moratorium on withdrawal. Also, since independence only 3 scheduled commercial banks have failed/rescued in this manner: Global Trust Bank (used by infamous Ketan Parekh in share market scam of 1998-2001 & eventually merged with Oriental Bank of Commerce), Laxmi Vilas Bank (merged with DBS India bank) & Yes Bank (saved by a consortium of banks). In today's times it will take a bank at least a few months to sink in India & during those months the bank will remain regularly in news so pretty hard to miss it. Of course all this does not account for the "mental tension" which depending on the situation at the time might not be worth earning 1-2% extra so decide accordingly.

It takes 3 missed premium payments before DICGC considers the bank as a defaulter for insurance purposes and cancels its membership. The amount of up to 5 lakhs until cancellation is covered, and theoretically the process should be completed in 90 days. In the worst case scenarios, you can expect the payment within 6 months.

Yes, it has happened less frequently for scheduled commercial banks but quite more frequently for cooperative banks. These cooperative banks now also have to follow the same charter, so if you look at a current scheduled bank like Unity, it was formed after merging the cooperative PMC bank, though of course liability for the merged entity is not carried forward to the same extent.

Honestly, not worth the hassle of the process for that extra percent.

 

[EHH]

It takes 3 missed premium payments before DICGC considers the bank as a defaulter for insurance purposes and cancels its membership. The amount of up to 5 lakhs until cancellation is covered, and theoretically the process should be completed in 90 days. In the worst case scenarios, you can expect the payment within 6 months.

Yes, it has happened less frequently for scheduled commercial banks but quite more frequently for cooperative banks. These cooperative banks now also have to follow the same charter, so if you look at a current scheduled bank like Unity, it was formed after merging the cooperative PMC bank, though of course liability for the merged entity is not carried forward to the same extent.

Honestly, not worth the hassle of the process for that extra percent.

So after cancellation the FD money is lost ? Do we need to track the insurance premiums now ?

 

[guest_999]

So after cancellation the FD money is lost ? Do we need to track the insurance premiums now ?

You don't need to do anything other than make FD in any scheduled commercial bank & spend 2 min daily reading news headlines in financial section of any national newspaper (aka English)/news app.

 

[t3chg33k]

So after cancellation the FD money is lost ? Do we need to track the insurance premiums now ?

The amount up to 5 lakhs including interest across all accounts with the same bank at the time of cancellation is covered by DICGC. Even if you don't follow events related to the bank regularly, just ensure that the principal + interest doesn't cross 5 lakhs with these banks.

And needless to say, you should be okay to have the funds blocked for 3-6 months at least in case things go wrong.

 

[raksrules]

Need

The amount up to 5 lakhs including interest across all accounts with the same bank at the time of cancellation is covered by DICGC. Even if you don't follow events related to the bank regularly, just ensure that the principal + interest doesn't cross 5 lakhs with these banks.

And needless to say, you should be okay to have the funds blocked for 3-6 months at least in case things go wrong.

Ok so recommendation is that it is ok to go to small finance banks etc. which give 1% to 1.5% higher interest until I make sure that the total loan + (potential) interest doesn't cross 5L.