POSTED BY November 11, 2010 12:43 am COMMENTS (8)ON
i came to know about the Investment Services Account offered by HDFC bank. i want to ask if it is wise open this account or should i open demat account. i am thinking about investing regularly to mutual fund through this account. it is easy to operate and they are charging zero transaction fee on that and for maintainig account they charge 100 rupee per quarter. is anything like that are offered by other banks also.
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8 replies on this article “is it wise to open Investment Services Account with HDFC bank or demat account”
I am holding investor service account and have lost huge sums in the process as under –
1. I had to perforce purchase regular plans of all MF. There is no option of direct plan on ISA. I have been losing approx. Rs 25000 per year as on date on these regular plans. This sum is continuously increasing.
2. I have been paying approx. Rs 1000 as maintenance charges per year.
3. There is no advice etc from HDFC as is claimed on regular plans through such ARNs like HDFC Bank.
4. I am badly stuck up as closure of this investor service account is possible only after selling all your investment till date.
One should always directly deal with respective AMC in the interest of economic efficiency of your investment. There is hardly any service from such intermediateries. rather they limit your choices and eat from your investment.
In that case whats stopping you from selling everything and repurcahsing through AMC ?
From Apr2016 Hdfc bank is charging Rs250+taxes per qtr. for ISA account and direct MF plans are Not available to investors.
So better to purchase MF direct from funds web site where they give comparatively considerable benefit to investors.
Thanks for sharing that !
I have an account with FundsIndia for past 4 months and am very pleased with their till date service. Commission are Zero till date for Mutual funds since they have business model of earning revenue on Trailing commission. Best for investors.
i agree ramesh mangal. hdfc bank isa was free during entry load era. other point of cost is:if you open sb account only for this purpose, you need to minimum average quarterly balance(aqb) rs.10000/-. for fundsindia.com , they have some 31 designated banks where you should better have a s.b. account. otherwise your transaction would be routed through their accont in icici bank, which i think, not seamless,and so not most preferred, and may cause some time lag. sbi, the biggest bank is not in their list of designated banks.
The MF route through the HDFC Bank ISA is quite good, efficient and user friendly. the redemptions are also directly transferred within the stipulated time (1 day for liquid funds and 3 days for equity funds).
Though there are a lot of options of the MF schemes, do remember they do not provide ALL the MF schemes.
They charge Rs. 100 (+taxes) per quarter (~Rs 440 per year). So, mathematically, for a MF portfolio of say Rs. 45000, you are getting charged 1% per year for just maintaining the account. So, you need to get a large MF portfolio.
There is another alternative. Fundsindia.com which also provides an option of opening a demat account at very reasonable charges. Though I myself do not have an account with them, but I have read good things about it on this site itself.
Do not go with HDFC Demat account. They charge HUGE amount per quarter depending upon the shares you hold and purchase. It’s better to go with some share broker. You can buy mutual funds through them also with low charges.
Also, their customer support department is always busy in assisting other customers. Difficult to contact them.
Hope it will help you.