MTF - Interest Rates

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1

Why is interest being charged per day compounded? No other application is charging compounded interest rates per day. If it is compounded then how can you quote it as 15.99% per annum since it has to be 17.33% per annum if compounded?
Also this statement -

An interest of 0.0438% will be charged per day post settlement on the funded amount.

doesn’t say anything about compound interest.
FYI - I got this information of interest being compounded from your customer service.
Attaching the screenshot for the same below.

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2

Hey @risav1994 ,

We have released MTF only for select users and are in the testing phase right now. Be assured that we will always keep things transparent at Dhan. Request you to please wait for the official announcement for more details.

Thanks,
Pranita
Product @ Dhan

3

Please explain the interest in detail.

4

Hey @Pranita, I guess this feature is already announced here. Anyways need clarity on interest rates in detail as there is a proper advertisement on this site.

Regards,
Risav

5

Bro… 16% is very high!! Better you go with m,Stock for MTF… only 8-9.5% interest is charged (depending on the funding amount) its the lowest in the industry… for everything else dhan is best, but for MTF m,Stock is best.

1 Like
6

@Akhil153045 I have switched to m.Stock for MTF. thanks!

2 Likes
7

Hi , have some doubts.

Suppose I buy SGB gold for 5L and remaining 15L is MTF from DHAN.

So can the whole 20L be pledged and the pledged amount be used for F&O ?

The 15L would be attracting 1.35 % ( around ) per month .

Is my understanding correct ?

8

MTF is an “open position” and not “demat holding”… I don’t think MTF position can be pledged for F&O. MTF itself is a leverage product and F&O is even more leverage!!

1 Like
9

Hey @pavz ,

Stocks bought using MTF cannot be re pledged as they have already been pledged for MTF. And thus cannot be used as collateral for F&O or regular trading.

Thanks,
Pranita
Product @ Dhan

2 Likes
10

Dear Pranita

Around Rs 50,000 has been charged from my account towards MTF holding. It seems there is an error in calculation of interest. Please send me the details of the charges. Request you to refund the amount wrongly charged. Regards.

Client id: 1000589656
Name: Preetha Harikumar Nair

11

Hi @hk2nair ,

We have gone through your transactions and you have been charged correctly. Sent relevant details on email.

Thanks,
Pranita
Product @ Dhan

12

@Pranita ,

We are waiting for your reply . Interest rate are 15% or 17% ?

14

Hi @AshaTapre ,

Interest rate is 0.0438% per day which is approx 15.99% pa

Thanks,
Pranita
Product @ Dhan

15

@Pranita ,

Why is interest being charged per day compounded? No other application is charging compounded interest rates per day. If it is compounded then how can you quote it as 15.99% per annum since it has to be 17.33% per annum if compounded?
Also this statement -

An interest of 0.0438% will be charged per day post settlement on the funded amount.
.

16

Hi @AshaTapre

Apologies for the miscommunication the MTF’s interest is calculated on simple interest only. As @Pranita said 15.99% pa and it will charged on the funded amount post settlement.

We have explained this with an example on our website dhan.co > Product > MTF

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17

Hey @AshaTapre ,

Additionally, please note that interest is charged on a daily basis using simple interest but posted weekly in your ledger. Incase you do not pay the interest then it may get compounded.

Thanks,
Pranita
Product @Dhan