DHFL-Fixed deposit scheme-15.94% yield-Can we invest?

DHFL-Fixed deposit scheme-15.94percent yield-Can we investDHFL-Fixed deposit scheme-15.94% yield-Can we invest?

Last week there was a request from one of reader Kishore who wanted to invest in DHFL Fixed deposit scheme, but wanted to know more about this investment product. DHFL fixed deposit schemes indicate that the annualized yield is as high as 15.94%. Should we invest in DHFL Fixed deposit scheme, what are the risks involved?

About DHFL

Dewan Housing Finance Ltd (DHFL) is a 29 year old company into housing finance business. It is the 3rd largest housing finance company in India and 2nd largest housing finance in private sector. Currently it offers a fixed deposit scheme Aashray Deposit Plus.

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Features of DHFL fixed deposit scheme-Aashray Deposit plus

  • It offers good interest rates from 10% per annum to 10.5%
  • It offers special interest rates for privileged customers up to 11% per annum and for deposits exceeding Rs 25 Lakhs.
  • Longer returns if you invest for longer duration up to 84 months
  • Pre-mature withdrawal available after 3 months from the date of FD
  • Interest can be debited through ECS directly to your bank account
  • Deposits available for the duration of 12 to 84 months (flexible tenure) and for special deposits of 14 months and 40 months.
  • DHFL Fixed deposit scheme is available in cumulative and non-cumulative schemes.
  • Minimum deposit for 12 to 84 months is Rs 2,000 and for 14 and 40 months deposits it is Rs 10,000.
  • Interest is computed half-yearly for 12-84 months and yearly for 14 and 44 months deposits.
  • Deposits greater than Rs 25 Lakhs and privileged customers, the annualized yield would work out to 15.94%.

Interest Rates for Cumulative and Non-Cumulative deposits are enclosed below.

DHFL-Fixed deposit scheme-Cumulative plan

DHFL-Fixed deposit scheme-Non-Cumulative plan

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Why to invest in DHFL Fixed deposit scheme

  • High interest rates
  • Interest would be debited directly to bank account instead of waiting for cheques.
  • DHFL is 3rd largest housing finance company in India
  • CAGR is 49% which indicates high growth in the industry
  • DHFL has zero percent of Net NPA (Non performing assets) for FY-2011-12.
  • Revenues for the 3 financial years are FY2011-Rs 1,451 Crores; FY2012-Rs 2,469 Crores; FY2013-Rs 4,140 Crores which indicates a good growth in the revenues.
  • Profits for the 3 financial years are FY2011-Rs 265.13 Crores; FY2012-Rs 306.36 Crores; FY2013-Rs 451.85 indicates good profit growth.

Why not to invest

  • Company fixed deposit schemes are high risk. The past performance of the company may be only indicative and future performance of the company can always turn negative.
  • Investment in real estate companies are always high risk as the margins can get eroded due to fluctuation in real estate prices.

Conclusion: DHFL Fixed deposit scheme interest rates are attractive. The financials are also show good growth. However, investment in real estate companies are little riskier. Considering this, an investor who is willing to take risk, can invest moderate investment in such fixed deposit schemes. Like I said earlier, invest part of your portfolio in such fixed deposits to diversify your risk.

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DHFL-Fixed deposit scheme-15.94% yield


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