Hi,

There are a lots of debates going on whether increasing the IPO limit to Rs 2 lac is a boon or bane for retail investor. Even by applying through ASBA we will get only 3.5 % interest on the money whether current FD offering close to 10%.

How we can keep the money in bank account so that we earn high interest as well as use the money for ASBA.

I understand we can do a FD against the money and take overdraft against the FD while applying for ASBA. Which Bank is the best for this facility? Which bank gives maximum overdraft limit?

Also can we use Sweep in FD against ASBA facility. There are lot of banks offering sweep-in FDs. Can this FD be used for applying for ASBA without sweeping out the whole amount and once the allotment is done only the required money is sweeped out.

Is this possible?

Regards
Taurus

ICICI allows & I think all other banks should also allow sweep FD as by definition ASBA means money remains in your bank a/c. It only gets blocked.

Hi Taurus,
Did you got answer to your questions ?
Please share.

No. I will have to try myself during the next IPO application.

Regards
Deb

HDFC Bank told me that they allow ASBA application if you have linked FD. But When I tried to apply for IPO using ASBA, it did not allow me to apply for that.

I had to arrange fund through other sources at that time.

Kotak allows ABSA Application if you have linked FD. But there are problems in their workings.

Suppose I have a Rs 50000 balance in saving and 5 lakh balance in linked FD. If I apply for 1 lakh using ASBA and say IPO is subscribed 10 times.

If I go to bank to withdraw Rs 20000, Kotak Bank will break the FD. Ideally they should not break the FD as I have Rs 50000 in saving and after I withdraw Rs 20000, there is still Rs. 30000 left in savings.

How Kotak ASBA works in case of FD?

When you apply for IPO, First amount in saving will get blocked. After that, amount in FD will be blocked. In this example 50000 from saving will be blocked and rest 50000 from FD. Now Available Balance in saving is zero and in FD 4.5 lakhs. So when you go to withdraw Rs 20000, it will break the FD.

I have an SB account with SBI and demat account with ShareKhan.

Can I apply for an IPO using ASBA facility through SBI (SB account) and provide the demat account with Sharekhan?

Yes you can do so. Subject to availability of funds in your SB a/c.

Happy investing!

Most of the time, software are wrongly written & hence you see this kind of behavior. Ask for written clarification from Kotak Bank & they will realize that something wrong with their software. At that time, they will poke their nose in & around their software & fix it. I am using ICICI ASBA (via physical forms, because I do not have DMAT a/c with ICICI) & it is working perfectly fine for me.

I raised this issue with the bank but they did not accept mistake.

I raised this issue with Banking Ombudsman. They advised bank to pay the actual losses + Rs 1500 towards misc expenses. I consider Rs 1500 is very less but still I am happy that bank is penalized for their mistake.

Which bank are you referring to - Kotak Bank or HDFC Bank?

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Kotak Bank. They had broken my FD when I had money in saving account.

Hi,

Is your Account balance in HDFC bank reflecting the FD amount also. I mean suppose you have linked FD of 2 lac and Savings account FREE balance of Rs 50,000 your account should reflect available balance of Rs 250,000. Rs 2 lac will be as overdraft facility (though in actual case only 70% of the linked FD reflects as overdraft facility).

Also did you tried the sweep in facility for FD. In sweep in facilty you MIGHT get full 100% as overdraft facility. I need to confirm that. Did you tried that?

Regards
Deb

In my account, it does not show the Linked FD balance. There is no way to find that this is linked FD. Only When I talked to the HDFC branch, they told it is linked FD.

My Overdraft Limit is shown as 0.00. I dont understand much about how HDFC works. Available Balance is same as my saving balance.

I had tried transferring Rs 100 sometime back and it allowed transfer.

I consider ICICI and Kotak are better than HDFC. From next time onwards, I will use only these two banks for Fixed deposits.

Hell All,

I am planning to open a new account for applying to IPO via ASBA. I have shortlisted 3 banks. Can anyone advice which bank will be best where I can link FDs and keep minimum cash in my account(if possible zero). Also which bank break FDs in LIFO(Last In First Out) format so that new(latest) FDs are broken first when cash is required.

1. Kotak
2. Axis
3. SBI
4. .....

Any advice please...

Thanks
Taurus