Unitech Ltd – FD scheme – Yield of 15.07% per annum-Review

Unitech Fixed deposit schemeUnitech Ltd – Fixed deposit scheme – Yield of 15.07% per annum-Review

Last week couple of my friends got an email about Unitech fixed deposit scheme which indicates that the effective yield is 15.07% p.a. They have forward the e-mail asking me to analyze and let them know whether they can invest it. Though, Unitech fixed deposit schemes have been issued for some time, it caught my attention when it indicated such high interest rate. Can we invest in Unitech fixed deposit schemes? What are the risks involved?

About Unitech Ltd

Unitech Ltd is a New Delhi based real estate developer in India. It is India’s most geographically diversified real estate developer with properties in Gurgaon, Noida, Bangalore, Chennai, Kolkata, Lucknow, Mysore, Mohali, Ambala, Rewari and Bhopal. Its land reserves of thousands of acres have some of the most premium apartments, luxury villas & well-planned townships in Noida, Gurgaon, Kolkata, Bangalore and Chennai. Unitech luxury homes are crafted and designed especially for the aficionados of luxury. ‘The Villas’ in Uniworld Resorts, Gurgaon is a stunning example of the same.

Also read: Mahindra Fixed deposit scheme – Should we invest?

Features of Unitech Ltd Fixed deposit scheme

Below are the features of the Unitech Ltd Fixed deposit scheme.

It offers the FD scheme Non cumulative and Cumulative options.

Scheme-A – Non cumulative fixed deposit scheme

Unitech Ltd – Fixed deposit scheme – Non Cumulative Scheme

  • Additional amount in multiples of ₹1,000/- can be invested.
  • Interest would be paid every quarter.
  • Interest will be compounded quarterly and calculated from the date of realization of the cheque/draft.
  • Post-dated Interest cheques from the date of realization for the financial year will be sent in 15 days prior to due date of the first interest cheques.
  • TDS would be deducted at 10% per annum if PAN card is submitted, else the TDS rate would be 20% per annum.
  • Nomination Facility is available

Scheme-B –Cumulative fixed deposit scheme

Unitech Ltd – Fixed deposit scheme – Cumulative Scheme

  • Additional amount in multiples of ₹1,000/- can be invested
  • Interest is compounded monthly and payable on maturity.
  • The amount of interest due on maturity, after deducting TDS, if applicable, would be sent 15 days before the date of the maturity.
  • Post-dated cheque for repayment of Principal amount will be dispatched along with interest cheque indicated above.
  • TDS would be deducted at 10% per annum if PAN card is submitted, else the TDS rate would be 20% per annum.
  • Nomination Facility is available.

Risks involved:

  1. It’s managing director Sanjay Chandra, an accused in the 2G spectrum allocation case, was given clean chit by CBI in the telephone conversation row during Mar, 2013. As per media reports the investigating agency (CBI) found that the conversation between the Chandra and AK Singh had no impact on the prosecution of the 2G case. We should wait and watch for any further news on this in future.
  2. Company has posted a negative revenue growth of (-12.7%) in FY2012-13 compared to its previous financial year.
  3. Company profits have declined from 27.12% (FY12) to 14.43% (FY13).
  4. This is a fixed deposit scheme like any other company fixed deposit. It may involve risks in repayment of interest or principal.
  5. Company is into Real estate sector business where there is stiff competition and pressure on margins.

Also read: How to file income tax return online

Conclusion: Investors may get attracted towards Unitech fixed deposit scheme due to its high yield. All company fixed deposit schemes are high risk, high return investments. I am not un-favor to corporate fixed deposits. However, considering negative revenue and profitable growth, it would be high risk to invest in such fixed deposit schemes. 

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Suresh
Unitech Ltd – Fixed deposit scheme – Yield of 15.07% per annum

Suresh KP

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28 comments

  1. Dear friend

    as i have deposit Rs 300000/ in unitech fixed deposit scheme it matured on 2015 but i have not recieved any amount . we all should jointly together do something for this otherwise we will lost the money.

    subodh kumar

    9319039400

  2. Dear Sir/Madam,
    I have taken a FD of Rs.2.00lac in Unitech,FDR no.1233875,folio no. 1247791 dated 10.08.2013 for 03 years.It matures on 09.08.2016.I have not got any maturity amount till date.Even ,I have not got any interest on FD, since 01.07 2015.It isadvisable not to invest in Unitech.

    Sudhir kumar Mittal
    Mob8003179779

  3. Dear All,

    Request not to do any FD with Unitech, i have done FD its more than 2 years i have not reveiced the amt. As per their form no.8, they wear supposed to pay 50 % amt within 15 months from the date of order as of today i have not received yet. Hope the company will realise and release the amount asap.

    Regards,

    M K Vinayak

    mbl no.9845371254

    FDR no.1248573

    1. I have invested 5 lakhs in Unitech FD scheme. Since 2015 I have neither received any interest nor the principal amount (after maturity) inpite of sending several requests.

      D.C. Chakravarty.

  4. Dear sir / madam

    .I have deposited 1lac Rs in unitech FD scheme (FDR NO. 1242399 folio no.1250478 dated 05/10/2013) by karvy in bareilly , It was one year scheme.and it’s maturity date is 05/10/14. I have deposit the FD reciept/ certificate to KARVY on 12/09/ 2014. But i have recieved only interest amount cheq and still not recieve the maturity amount.
    Actully my daughter’s marriege was on 30 nov 2014. I am sorry to say that I have not foumd my payment in marriege. And I took the money from market on higher interst. So plz paid the FD maturity VINEET KUMAR SAXENA
    FDR NO.1242399 FOLIO NO,1250478
    . MOB. NO.9259275632

  5. UniTech is not paying FD maturity amounts for the last one year and recently is filing Form 8 with Company Law Board to see extension ranging from 9 to 42 months. UniTech claims they will pay interest for the extension period.
    One way to make these companies respond is – lodge a complaint with Ministry of Corporate Affairs. It is rather easy process and can be done online. Below link has details.
    http://www.mca.gov.in/MinistryV2/complaints.html

    If you still see delay you can approach Company Law Board and lodge a compliant. This is an offline process and you need to pay a nominal fee of INR 50.

  6. My two Fds matured in january and feb.for 2 lakhs each duly submitted for refund does not receive any attention, no proper reply, unable to contact the section/people concerned,when contacted with much difficulties get vague reply.
    What is the solution?

  7. My FDR # 1221113 matured on 6th June 2014 but the amount has not yet been credited to my Bank A/C. Please let me know the status. Thanks.

  8. It appears that Unitech has given jitters to many FD investors. People should not invest in such company ,who does not respond to calls or mails and leaves the investors in helpless situation. Hope it is not going the Sahara way. So never invest for 1-2 % extra gains at the cost of loss sleep.

  9. Do never make a mistake of investing with Unitech as FDs, I am waiting to get my 3.5 lakhs since Jan.2014. Noone replies to mails sent by me number of times. I have also written to Company Law Board, but so far there is no news!

  10. I have deposited Rs.2,00,000/-as FD in M/s Unitech ltd on 10.08.2013.I have got quarterly interest cheques for Oct,13 and Jan,14 after deduction of 10% TDS total amount Rs.988/-.This TDS amount is not appearing in Form No.26AS. I have file returns by paying Income tax in July,14 .I have send several mails to customer care of M/s Unitech Limited. I have not got any reply till now.Kindly advise how to proceed further.
    Sudhir kumar mittal
    FD. No.1233875
    Account No.1247791

  11. I jointly with my wife invested a good amount of money in Unitech FDs. Unfortunately, I did not get interest cheques for 2014-15. I got their contact numbers in Gurgaon as well as in Kolkata but I failed to talk to them because they never receive the calls. I don't know whom to contact and what should be my next course of action.

    Gurgaon No. (0124)4697800 & Kolkata No. 9830867766.

  12. Dear Sir

    Iam planning to invest in Sriram Transport Finance as FD for 3 years. Please suggest the Pros and cons doing so

    1. Srinivas, Shriram FD schemes are MAA+/stable by ICRA and Crisil. Company FD’s are always riskly. You know what happened to Gitanjali Gems when they have come up for FD scheme. But if you are still interested, you can invest with risk. Rating is ok.

  13. I am 24yrs old, with a less experience with investments. Just wanted to know if it would be okay to invest just a part(around 20% of total investment) in such FDs? Whats the worst case scenario that could happen?

    1. Ankur, You should always diversify and you can invest part of you investmetns in such FD’s. The worst case would be that your interest and capital would get delayed. The other extreme could be that a company can go wind-up and you may loose money. But this is the rare case. Instead of investing 20%, invest say 5% in such FD and wait and watch for other high yield investment options. 

  14. What are difference in mutual fund pension schme and insurance pension plans etc,which is the best?

    1. Sudhakar, Insurance pension plan offers risk cover + investment. However mutual fund pension plans acts like only mutual funds, but invests in safe investment options. However mutual fund pension plans are not offering much returns (you can refer my article on this subject), hence if you are looking from returns point of view, invest in diverisifed mutual fund or large cap funds. If you are looking for insurance risk cover + low returns, you can invest in insurance pension plans

  15. While investing in company FD's involves "risks", I have been investing a small part of my portfolio in High Risk Medium Return instrument such as Co FD's(Unitech, J P Assocaites, Sriram group, DHFL, Zenith Birla, Bill Care etc) for the past 5 years with NO negative results so far …
    Things you can look for :
    The PDC cheques are sent on time and outdated cheques are also validated and re-sent promptly …Some Co's have ECS facility as well which is convinient …The principal amount is also refunded/re- invested as per the time mentioned by various co's …
    Things to take care:
    Consult a reliable investment consultant for past performance of particualr Co FD.It is necessary though that a little research be done about the company you wish to invest especially the financial aspects. Unlike bank FD's, though the interest PDC are sent well before time, the delivery of certificate and principal amount refund does take some time (mostly between 30-45 days). Happy Investing …

  16. Suresh Ji,

    Iam new in investment. Sir i have some doubt. I purchase HDFC tax saver (d) fund . Now my fund nav is showing negative return. So how i get my dividend amount if nav is going down every year. One more thing if i invest 10000 in a fund and get 500units of fund at 200/nav after 2 yr if nav go down so my investment will go down. SO how dividend option give divident while nav is going down. Hope you understand what i am trying to say you .

    1. Munish, I agree with you. Dividends are paid from profits and not from taking money from capital. HDFC Tax saver has provided a return of 10% per annum in last 5 years and 3% per annum in last 3 years and 13% per annum in last 1 year. I could not understand your question about how you are getting negative returns. The fund performance is not that good that I know, but negative returns, something is wrong. Only if you have purchased 2 years back from now, there are 0.3% negative returns. Please check.

  17. Hi Suresh,

    Thank you for writing the post. I saw the advertisement of UNITECH in news paper too.I'm thinking between DHFL and UNITECH where to invest fixed deposit.  

    Could you please review DHFL too? DHFL is offering 11.0% yield. I did some work on DHFL background which gave some positive result, like CRISIL ranking, revenue, history etc.

    Please let us know your thoughts on DHFL.

     

    Thank you

    Kishore B

      1. Don't go for UNITECH and DHFL they are like just Chit fund. Public would be cheated anytime. Read some news about Saradha Group -West Bengal. Go with reputed bank FD/RD

  18. Agree. If one is willing to take a higher risk on his or her investments to get a better return, it is better to take a "calculated risk" and take an exposure to times tested equity oriented scheme, rather than invest in high risk company fixed deposits with a not so good track record, and risk losing your principal too

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