I have been a FundsIndia customer for a very long time - almost from their infancy days. I love their neat and clean UI and the user experience. However, recently I have started contemplating a move from FundsIndia to FundSupermart.
I have concern about their new open-ECS-mandate for SIPs. This open-mandate looks way too open to me.
Attached is the open-ECS mandate of FundsIndia -
The problem I have is with the language used here. Let's consider this example. Say, I want to start an SIP of Rs. 30,000 per month. That means I should give a mandate which allows FundsIndia to deduct maximum Rs 30,000 per month. Now, if we notice the highlighted parts (Frequency & Amount ) in the attached mandate, it says that the mandate allows deduction of Rs 30,000 PER DAY!!!
It means for investing Rs 30,000 per month, I have to give a mandate for deduction of Rs 900,000 (Rs 30,000 per day * 30) per month! Why would I want to do that? To add to it, the minimum duration for the mandate is 5 years! Giving this mandate feels like giving post-dated cheques for Rs 30,000 for each day of next 5 years!
The mandate does not anywhere say 'once a month' or 'maximum amount per month' etc.!
When I contacted FundsIndia customer care, they informed that the daily limit is set to allow customers choose any day of the month for SIP and I think that may be a valid statement - I do not counter that.
I understand that it gives flexibility of choosing any date as SIP date. On FundsSupermart, we have to select a specific date out of the ones they have listed (Any date out of 7th, 14th, 21st, 28th etc.) - this reduces the flexibility but then I would (any customer would) prefer clarity on the document we sign as opposed to such flexibility. mandate of FundSupermart clearly mentions the frequency as monthly and maximum deduction limit per month! (their ECS mandate attached below)
Before this post sends out any wrong signals, let me clarify - I trust FundsIndia that it will not make any unauthorized debit from my account but still when it comes to signing a 'cheque', I would strictly go by the wordings of the document!
I am open to any suggestions my understanding on the mandate is incorrect! FundsIndia customer care could not give me satisfactory answer if my understanding was wrong!
On the flip side, I feel when a document is too complex for a common man to understand, it is better to be apprehensive :)
I had a very long mail chain with the customer care of FundsIndia and in the end, we agreed to disagree on this point.
FundsIndia chose to stick to their mandate and I chose to avoid signing such a mandate.... avoid SIPs with FundsIndia.
I have concern about their new open-ECS-mandate for SIPs. This open-mandate looks way too open to me.
Attached is the open-ECS mandate of FundsIndia -
It means for investing Rs 30,000 per month, I have to give a mandate for deduction of Rs 900,000 (Rs 30,000 per day * 30) per month! Why would I want to do that? To add to it, the minimum duration for the mandate is 5 years! Giving this mandate feels like giving post-dated cheques for Rs 30,000 for each day of next 5 years!
The mandate does not anywhere say 'once a month' or 'maximum amount per month' etc.!
When I contacted FundsIndia customer care, they informed that the daily limit is set to allow customers choose any day of the month for SIP and I think that may be a valid statement - I do not counter that.
I understand that it gives flexibility of choosing any date as SIP date. On FundsSupermart, we have to select a specific date out of the ones they have listed (Any date out of 7th, 14th, 21st, 28th etc.) - this reduces the flexibility but then I would (any customer would) prefer clarity on the document we sign as opposed to such flexibility. mandate of FundSupermart clearly mentions the frequency as monthly and maximum deduction limit per month! (their ECS mandate attached below)
Before this post sends out any wrong signals, let me clarify - I trust FundsIndia that it will not make any unauthorized debit from my account but still when it comes to signing a 'cheque', I would strictly go by the wordings of the document!
I am open to any suggestions my understanding on the mandate is incorrect! FundsIndia customer care could not give me satisfactory answer if my understanding was wrong!
On the flip side, I feel when a document is too complex for a common man to understand, it is better to be apprehensive :)
I had a very long mail chain with the customer care of FundsIndia and in the end, we agreed to disagree on this point.
FundsIndia chose to stick to their mandate and I chose to avoid signing such a mandate.... avoid SIPs with FundsIndia.
16 comments:
Thank you for sharing this. it's an eye opener..
Hi Sarang,
I completely understand your concerns which you shared in your post. However i would say to avoid your concern about Open ECS mandate with FundsIndia, i would suggest not to sign / use such ECS mandate instead you can transact by yourself as and when you required.
And as far as SIP is concerned you can use the Alert SIP facility provided by FundsIndia like i do. FundsIndia sends us reminder on 1 day prior and on SIP date (which i already selected as per my wish) and i do the transaction by myself. I have 3-4 Alert SIP setup and for all of them I do the transaction by myself and not by Open ECS mandate.
I am active customer of FundsIndia since last 1 year, and I must say I am highly impressed with the services of FundsIndia. Just for one reason I won’t downgrade FundsIndia and that too when they have alternate options like Alert SIPs
just came across this post and I am also finding same issue with FI. mine is new account open and they asking to sign mandate for 10K for 20 years and that too not monthly or maximum . it is termed as " as and when presented".
Customer care is forcing and saying they will not change it.
Do you have any solution for this within FundsIndia or switching is only option??
just came across this post and I am also finding same issue with FI. mine is new account open and they asking to sign mandate for 10K for 20 years and that too not monthly or maximum . it is termed as " as and when presented".
Customer care is forcing and saying they will not change it.
Do you have any solution for this within FundsIndia or switching is only option??
I wouldn't even care to find a solution.... I don't do SIP with FundsIndia.... simple! :)
Hello Sarang,
I completely agree to your point of Mandate issue with Fundsindia.
However FundsIndia also has several advantages which cannot be overruled.
For mandate related concern, i chose to avail FundsIndia's Alert SIP facility where in an investor have to do the transaction of preselected SIP date (without Mandate). You may also use this to avoid your concerns of Mandate.
Just for one reason, i won't degrade FundsIndia.
Hi Udaya,
I personally prefer regular SIP over alert SIP.
Alert SIP is nothing but a reminder service! (I can put the reminder on my mobile as well!) This is a mater of personal choice though.
Regarding the mandate - I don't think this is 'just another issue'. As I mentioned in my blog too, I like FundsIndia. But for the same reason, I am confused why they are so adamant on not solving this issue! Except for this one issue, they have come across as a very customer friendly company to me.
According to me this issue is big enough to not ignore.
This is an interesting article and i was doing my research on opening an account with either fundsindia or fund supermart. I do not want to do any SIP but once or twice a year invest a lump sum amount in a ELSS schemes for saving tax. I am confused which one to go for please suggest
Well, now that we have option to choose 'direct' schemes of MF/ELSS, I would prefer that direct option.
It gives higher return that regular MF/ELSS!
@Memself..
Follow Sarang and go for direct route and you would be much more happier in terms of returns as well as escaping the FundsIndia Trap! a little leg work in initial setup but worth it.
At FI - Even if you want to do a SIP of 2 years they would generate a mandate for 20 years which is cheating!
Just a one question ? How can I cancel my existing SIP with funds India .
I have problems with funds India . All of 4 SIP were expired last month and today I noticed that without my permission they have started the SIP again .
Dr. Prabhat,
I think best would be to contact fundsindia customer service. Just to be safe, good to contact your bank and inform them to cancel the mandate.
I haven't heard any case of cheating from funds india but then when skmeone asks a blank cheque from me, it is obvious to be concerned about their inrention!
Sarang, i recently started using funds india. I have one question, suppose if i invest in mutual fund through funds india and after some period of time i redeem it, will the amount directly gets credited to my registered bank account or is there any separate process by which they give the money back?
Sarang, i recently opened account with funds india. I have one question, suppose if i invest in mutual fund using funds india and later i redeem it, amount will be credited back directly to my registered bank account or is there any separate process?
It comes directly to your bank account unless any documentation issue. You can check with FI for your case though!
I am using FI for the last 1.5 yrs and planning to move out. Reason is that they take more than a week to transfer money to our account. Why they are keeping our money for a longtime
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