You must Sign In to post a response.
  • Category: Miscellaneous

    Don't chase rate of interest, chase security now

    The massive number of frauds made in so many cooperative banks, in various parts of India, should sound a bell in each of us. We should now rather not park our funds in the risky mutual funds or the new small banks that are offering high rates of interest. The small finance banks might be at risk sooner or later, as the takers for loans is still very low.

    Every single day, one is literally bombarded with questions as to whether he or she is ready to invest in the stock market. Somehow or the other, our cell numbers become known to so many people. There are calls from various banks.

    And even the news is all about the high rates offered by some small finance bank or the other. However, these are new banks and will take a minimum of five years before they find their feet. It is unwise to deposit any amount in such banks. Chase security now. If we look around, we can cut on all expenses. This is a far better thing to do now.
  • #706565
    A very timely thread by the author. In my rich experience of last 45-50 years in this field, there are a large number of companies, fund houses, financial companies, chit funds, investment agents, and many more in our country who are engaged in duping the investors and gullible people and minting money. It is beyond calculations to arrive at the amount so far duped by them by cheating the public but unfortunately it is still continuing. As an example, in 2016, CBI did some enquiry and found that chit fund companies had cheated the public by an amount more than Rs 80000 crore.

    I would give some more examples. First is related to company FDs. Many companies like Lloyd Finance, DCM Financials, Sudarshan Fund, Pentafour Software, and hundreds of others were offering high interest on the FDs and gave the interest for some time but one by one they defaulted and disappeared from the scene. Later the SEBI and other Govt agencies took over the remains of some of these companies and sold their buildings etc and returned some part of the FDs (hardly 20-30%) to the investors. But this was done only in a few cases where the company had big buildings and assets. In other cases investor got nothing. Second example is tree plantation companies. They also cheated the public. There are many. The list is endless. I fully agree - do not chase the high interest just see the security of your hard earned money.

    If any member has also gone under such ordeal and wants to know more about a specific case and ISC allows such type of queries to be answered in the Ask Experts section then I can help the members (without any business interest in that) by providing valuable and specific information there as an answer to the query.

    Concerned editor may like to clarify or speak on the issue of including such queries in Ask Experts section.

    Knowledge is power.

  • #706581
    Always one should be careful in investing hard-earned money. As mentioned by the author, we should think of the security of our funds more than the rate of interest. This is very important for the people who retired and depending on the interest on their investment for their domestic expenses. But unfortunately, the banks which we feel safe are decreasing the rate of interest from time to time. So the amount coming on interests is decreasing and the expenses are increasing and they are feeling very difficult in carrying on the family. So some people may be getting tempted towards high-interest instruments which are always not safe.
    Many small financial institutions are offering a high rate of interest but there is no guarantee for your principle amount. So we should not go for investment in such institutions. Be careful and see that your hard-earned money will not disappear.

    always confident

  • #706590
    The world is full of crooked and cheat people and it is entirely our responsibility to keep ourselves away from them or be vigilant on this aspect. We are hearing so many cases of cheating and deceit nowadays.
    Thoughts exchanged is knowledge gained.

  • #706622
    I do agree with the author that banks were giving good interest once upon a time and they gradually reduced the same and thus those who depend on interest as the main source of income, would try to shift to other sources giving good interest. But over the course of time every organization has duped the investors on interest and reduced the same and therefore we are forced to satisfy with the pittance interest through national banks. Only national banks give security to our money and we cannot trust private banks and cooperative banks. But when we invest on mutual funds like L & T the income is regular and I was getting the interest even during the lock down period. That means when the performing company mutual funds are invested we are sure of getting returns as they have regular business at all times.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #706631
    Right said by the author. We need to remain cautious, especially when there is a lot of confusion all around. The situation has halted many businesses and many have no jobs. Nobody knows when the situation is going to improve and the predictions of the leaders in the economic segment are also not encouraging. Therefore, on seeing an advertisement of high return many can be tempted and try to invest in such schemes. In general, many were duped earlier and when there is less hope people try to find a ray of hope through such schemes that promise high returns within a short span. Everybody needs to save what they have and stop unnecessary expenses. Cost-cutting and secure what we have is always essential even more so when there is uncertainty.

    "Life is easier when you enjoy what you do"

  • Sign In to post your comments