Escolar Documentos
Profissional Documentos
Cultura Documentos
A REPORT
ON
BY
SUMIT KUMAR
BATCH 2010
MBA –III SEM.
KARVY STOCK BROKING LTD.
MOHALI
ACKNOWLEDGEMENT
Shukla, RPEC Sec 78 Mohali for allowing me to undergo training at Karvy Stock
Broking Company, Mohali, and Punjab and for helping me finding the solution to my
problems.
I heart fully thank my company guide Mr. Mukesh Goyal for his expert and inspiring
I would also like to thanks all staff members of Karvy Stock Broking Company and all
others who took keen interest and helped me at any step of my work in this project.
ABSTRACT
My project “customer perception and awareness level about various financial instruments”
provided by various financial companies to their customer like stock broking, mutual fund,
insurance, IPO’s, and various financial services For the deep inclination in to the management
concepts practical work is important aspect. Theoretical knowledge gives us the fundamental
concepts of management and practical work teaches us these tact and skills which are
successfully employed to capture today’s competitive market. The main objective of dissertation
and project is familiarization with the necessary theoretical inputs and to gain sufficient practical
exposure to establish distant linkage between the conceptual knowledge to practical situation.
Practical work thus play an important role in developing and sharpening one’s skill in the field
of business and management and administration. During my tenure of dissertation, I will study
the customer perception and awareness level about various financial instruments.
There are numbers of types of customer who invest in these financial instruments, in which some
have knowledge about these financial product and some have not. So the study should be
conduct to determine the saving behaviors of customer and their perception about various
financial products. Investment is the employment of funds with the aim of achieving additional
income or growth in value. The essential quality of an investment is that it involves “waiting” for
a reward . it involves the commitment of resource that have been saved or put away from
There are customer who looks for normal returns with minimum risk and there are
customer who look for maximum return without taking care of the risk involved in it. The
financial advisor should take care of the requirement of the customer. There are high levels,
middle level, and low level customers. These can be categories with their income level. The
requirement of high level customers may be for longer period. They looking for the long
investment but the middle level and low level customer may not go for the long term
investment.They investment for the purpose of saving. There can be several customer who will
invest for saving the tax so they invest in that scheme which will provide these types of benefits.
So they way of approaching different type of customer is different. This is totally depending
upon their requirements. So before approaching to any customer, we should be well prepared
with all kinds queries related to the product and this can be done by knowing customer
In the old days investment options were fewer and the market risk were limited. The limitation
was a result of the predominant role and responsibility assumed by the state in presiding our
financial future. In that present times all that is changing and changing rapidly. Not only are
investment options increasing, the complexity is increasing as market forces come in to fuller
play. The market is bound more complex and investment advice for financial planning saving
A descriptive research has been conducting for the purpose of this study. Both primary and
secondary data has been used for the purpose of data collection. Primary data has been collected
by structured questionnaire. Secondary data has been collected by using secondary source of
PROJECT
INTRODUCTION
The purpose of the study is to determine the saving behaviour and investment preferences of
customer. Customer perception report will provide a way to accurately measure how customers
think about company, product and services provided by the company. Today’s trying economic
conditions have forced difficult decisions on companies. Most are making conservative decisions
that reflect a survival mode in business operations. during these difficult times, understanding
what customer think on an ongoing basis is critical for survival. Management needs ongoing
feedback from customer, partners, and employees in order to continue to successfully innovate
and grow. For this report, customer perception and awareness level will be measured in many
b) What are the factors which a customer consider while investing in any Financial
Instrument.
e) How long they prefer to keep their money in any financial instrument.
possible to cover with out any errors. But due to time and money constraints, this study is
provided by various company to their customer and the perception and awareness level of the
customer about these financial instrument. For which there will be the need of information
from the customer about their knowledge for these financial instrument. The various
a) Total numbers of financial instrument in the market is so large that it needs lot of
resource to analyze them all. There are various companies providing various financial
c) People some time hesitate to provide complete information about self and saving
behavior.
d) Due to time and money constraints study will conducted in only selected area.
Therefore, information will be collected from various companies websites and by filing
a) DATA COLLECTION :-
Data collection is collected with the help of questionnaire, which
I) Primary method :-
The primary data is collected with the help of questionnaire, which will
through internet.
b) SAMPLE DESIGN :-
given population. It mainly refers to the technique and the procedure which I have adopted in
selecting item from sampling. Sample design is determined before the data are collected but I
c) SAMPLING UNIT :-
A decision has to be taken concerning a sampling unit before selecting sample. Sampling unit
may be geographical one such as a state, distt, village etc. But for my project sampling unit
This report will help companies to strengthen customer intimacy. The report on customer
perception and awareness level about various financial instruments will help the company in
1. It will help to understand the expectations of the customer from the perspective of
financial performance .
2. It will provide fresh insights which can help their business to continue to flourish.
6. The study will help in gaining a better understanding of what the investor looks for in an
investment options.
7. It can used by financial sector in designing better financial instrument customized to suit
This report will develop in order to empower companies with detailed primary market
research needed to make well infrmed decisions and it will provide independent
customers. These are various advantages which will give some value addition to the
company in understanding the customer perception and awareness level about various
financial instruments.
INTRODUCTION OF THE
ORGANISATION
INTRODUCTION
KARVY, is a premier integrated financial services provider, and ranked among the top five
in the country in all its business segments, services over 16 million individual investor in
various capacities, and provides investor services to over 300 corporate, comprising the who
is who corporate India. KARVY covers the entire spectrum of financial services such as
stock broking, depository participants, distribution of financial products- mutual fund, bonds,
fixed deposits, equities, insurance, commodities broking, personal finance advisory services,
and corporate finance, IPO’s, among others. Karvy has a professional management team
and ranks among the best in technology, operations and research of various industrial
segments.
Organization
Karvy was started by a group of five chartered accountants in 1979 and the name
KARVY has been derived from the first letter of their names
K - KUTUMB RAO
A - AJAY KUMAR
R - RAMAKRISHNA
V – VAIDYANATHAN
Y – YUGANDHAR
The partner decided to offer, other than audit services, value added services like corporate
advisory services to their clients. The first firm in the group, karvy consultants limited
was incorporated on 23rd July 1983. In a very short period it become the largest registrar
and transfer agent in India. This business was spun off to from a separate joint venture
with Computershare of Australia in 2005. Karvy’s foray into stock broking began with
market IPO’S in 1993. Within a few years, karvy began topping the IPO procurement
league tables and it has consistently maintained its top position the top 5. Karvy was
among the first few member of national stock exchange in 1994 and become a member of
While the registry business is a 50:50 joint venture with Computershare of Australia, we
have equity participation by ICICI venture and limited and Barings Asia limited, in Karvy
Karvy has always believed in adding value to services it offers to client, a top notch
research team based in Mumbai and Hyderabad supports its employees to advise client on
their investment needs with the information overload today, karvy’s team of analyst help
Commodities trading
Corporate finance
CLASSIFICATION OF
FINANCIAL
INSTRUMENT
CLASSIFICATION OF FINANCIALINSTRUMENT
MUTUAL FUND
thus collected is then invested in capital market instruments such as shares, debentures
and other securities. The income earned through these investments and the capital
appreciation realised are shared by its unit holders in proportion to the number of units
owned by them. Thus a Mutual Fund is the most suitable investment for the common man
securities at a relatively low cost. Every Mutual Fund is managed by a fund manager,
who using his investment management skills and necessary research works ensures much
better return than what an investor can manage on his own. The capital appreciation and
other incomes earned from these investments are passed on to the investors (also known
works and has better investment management skills which ensure higher returns to the
c) Liquidity :- An investor may not be able to sell some of the shares held by him
very easily and quickly, whereas units of a mutual fund are far more liquid.
d) Choice of Schemes :- Mutual funds provide investors with various schemes with
different investment objectives. Investors have the option of investing in a scheme having
a correlation between its investment objectives and their own financial goals. These
e) Flexibility :- Investors also benefit from the convenience and flexibility offered by
Mutual Funds. Investors can switch their holdings from a debt scheme to an equity
scheme and vice-versa. Option of systematic (at regular intervals) investment and
where the interests of the investors are protected by the regulator. All funds are registered
Investor has to pay investment management fees and fund distribution costs as a
percentage of the value of his investments (as long as he holds the units), irrespective of
b) Dilution :- Because funds have small holdings in so many companies, high returns
from a few investment often don’t make much difference on the overall return.
Wide variety of mutual funds schemes exists to cater the needs such as financial
position, risk tolerance and return expectations etc. The table below gives an overview in
• By Structure
– Interval Schemes
• By Investment Objectives
– Growth Schemes
– Income Schemes
– Balance Schemes
• Other Schemes
• Special Schemes
– Index Schemes
a) Net asset value :- Net Asset Value is the market value of the assets of the
scheme minus its liabilities. The per unit NAV is the net asset value of the scheme
b) Sale price:- Is the price you pay when you invest in a scheme. Also called
units and it may include a back-end load. This is also called Bid Price.
units and close-ended schemes redeem their units on maturity. Such prices are NAV
related.
e) Sales Load :-
Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’
load. Schemes that do not charge a load are called ‘No Load’ schemes.
Is a charge collected by a scheme when it buys back the units from the unit holders.
INSURANCE
People need life insurance in the first place. An insurance policy is primarily meant to
protect the income of the family’s breadwinners. The idea is if anyone or both die, their
dependents continue to live comfortable. The circle of life begins at birth, followed by
education, marriage and eventually, after a lifetime of work, we look forward to a life of
retirement .Our finances too tend to change as we go through phases of our life. In the first
twenty years of our life, we are financially and emotionally dependent on our parents and
there are no financial commitments to be met. In the next twenty years, we gain financial
independence and provide for our families. This is also the stage when our incomes may be
unable to meet the growing expenses of young household. In following twenty years, as our
children grow and become financially independent, we see our saving grow, a nest egg put
Definition:-
Insurance is a contract between two parties whereby one party agrees to undertake the risk of
another in exchange for consideration known as premium and promises to pay a fixed sum of
money to the other party on happening of an uncertain event (death) or after the expiry of a
certain period.The party bearing the risk is known as the 'insurer' or 'assurer' and the party
provision against loss from unavoidable disasters. The protection which affords takes the
form of guaranty to indemnify the insured if certain specified losses occur. The principle of
insurance, so far as the undertaking of the obligation is concerned, is that for the payment of
a certain sum the guarantee will be given to reimburse the insured. The insurer, in accepting
risk, so distributes them that the sum total of all the amounts paid for this insurance
protection will be sufficient to meet the losses that occur. Insurance then, indicates divided
responsibility. This principle is introduced in most stores where a division is made between
the sales clerk and the cashier’s department, the arrangement dividing the risk of loss. The
Insurance is a form of risk management primarily used to hedge against the risk of a
contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss,
from one entity to another, in exchange for payment. An insurer is a company selling the
insurance; an insured or policyholder is the person or entity buying the insurance policy. The
insurance rate is a factor used to determine the amount to be charged for a certain amount of
insurance coverage, called the premium. Risk management, the practice of appraising and
The transaction involves the insured assuming a guaranteed and known relatively small
loss in the form of payment to the insurer in exchange for the insurer's promise to
compensate (indemnify) the insured in the case of a large, possibly devastating loss. The
insured receives a contract called the insurance policy which details the conditions and
Term insurance plan :- A term insurance policy is a pure risk cover for a
specified period of time. What this means is that the sum assured is payable only if
the policyholder dies within the policy term. For instance, if a person buys Rs 2 lakh
policy for 15-years, his family is entitled to the money if he dies within that 15-year
period.
Whole life plan :- As the name suggests, a Whole Life Policy is an insurance
Under this plan, the policyholder pays regular premiums until his death, following
This policy, however, fails to address the additional needs of the insured during his post-
retirement years. It doesn't take into account a person's increasing needs either. While the
insured buys the policy at a young age, his requirements increase over time. By the time
he dies, the value of the sum assured is too low to meet his family's needs. As a result of
these drawbacks, insurance firms now offer either a modified Whole Life Policy or
If the insured dies during the tenure of the policy, the insurance firm has to pay
A pure endowment policy is also a form of financial saving, whereby if the person
covered remains alive beyond the tenure of the policy, he gets back the sum
In addition to the basic policy, insurers offer various benefits such as double endowment
and marriage/ education endowment plans. The cost of such a policy is slightly higher but
Single premium plan:- Single premium plan are investment plans offered by a
life insurance company. The insurance company generally pays a guaranteed interest
rate on the single premium investment. Returns from single premium plans ate tax
Money back policy :- Money Back Policy is to provide money on the occasions
when the policy holder needs for his personal life. The occasions may be marriage,
education, etc. Money will be paid back to the policy holder with the specified
duration. If the polciy holder dies before the policy term, the sum assured will be
given to his family. A portion of the sum assured is payable at regular intervals. On
With the rapid growth of the Indian Insurance industry, in particularly serving a Middle
Class that is growing on both size and wealth every year, it is hardly surprisng that Indian
insurance companies are growing, and playing an increasingly important role in the
competition among Indian insurance companies in an industry that 20 years ago was
relatively small.
To date, India's Insurance Regulatory and Development Authority (IRDA), has granted
and 9 general insurance companies. Counting the existing public sector insurance
companies, there are currently 13 Indian insurance companies in the life side and 13
LIFE INSURERS
GENERAL INSURERS
SHARES
About shares:-
company. Investor buy stock in the form of shares, which represents a portion of a company’s
shares you own in relation to the total number of shares available .For example, if you buy
1000 shares of stock in a company that has issued a total of 100,000 shares, you own one per
While one per cent seems like a small holding, very few private investor are able to
accumulate a shareholding of that size in publicly quoted companies, many of which have a
market value running in to billions of pound. Your stake may authorize you to vote at the
company annual meeting, where shareholders usually receive one vote per share.
In theory, every stock holder, no matter how small their stake, can exercise some influence
over company management at the annual general meeting. In reality, however, most private
investor’s stakes are insignificant. Management policy is far more likely to be influenced by
A stock symbols, or epic symbol is the standard abbreviation of a stock’s name. you can find
newspaper stock listing and investment websites. Company names also have abbreviations
called ticker symbols. However, it’s worth remembering that these may vary at the different
b) PERFORMANCE INDICATORS:-
Closing price the last price at which the stock was bought or sold
High and low the highest and the lowest price of the stock from the
52 week range the highest and lowest price over the previous 52 weeks
Volume the amount of shares traded during the previous trading day.
Net change the difference between the closing price on the last trading day
and the closing price on the trading day prior to the last
The stock exchange :-
borrower trade stock. It also set rules and regulations to ensure that the stock market
operates efficiently and fairly for all parties involved. It is a common platform where
buyers and sellers come together to transact in stocks and shares. It may be a physical
entity where brokers trade on a physical trading floor via an "open outcry" system or a
virtual environment.
stock brokers and traders, to trade stocks and other securities. Stock exchanges also
provide facilities for the issue and redemption of securities as well as other financial
instruments and capital events including the payment of income and dividends. The
securities traded on a stock exchange include shares issued by companies, unit trusts,
Electronic Trading :- Electronic trading eliminates the need for physical trading
floors. Brokers can trade from their offices, using fully automated screen-based processes.
Their workstations are connected to a Stock Exchange's central computer via satellite using
Very Small Aperture Terminus (VSATs). The orders placed by brokers reach the
who are concerned with general stock market price movements. An Index comprises
stocks that have large liquidity and market capitalisation. Each stock is given a weightage
in the Index equivalent to its market capitalisation. At the NSE, the capitalisation of
NIFTY (fifty selected stocks) is taken as a base capitalisation, with the value set at 1000.
Similarly, BSE Sensitive Index or Sensex comprises 30 selected stocks. The Index value
compares the day's market capitalisation vis-a-vis base capitalisation and indicates how
Stock :- The word stock simply refers to a supply. You may have a stock of T- shirts in
your closet, or a stock of pencils in your desk. In the financial market, stock refers to a
supply of money that a company has raised. This supply comes from people who have
given the company money in the hope that the company will make their money grow.
POST OFFICE DEPOSITS
A post office is a facility authorised by a postal system for the posting, receipt, sorting,
handling, transmission or delivery of mail.[1] Post offices offer mail-related services such
as post office boxes, postage and packaging supplies. In addition, some post offices offer
non-postal services such as passport applications and other government forms, car tax
The back rooms of a post office are where mail is processed for delivery. Mail may also
be processed in other post offices that are not open to the general public. You can request
copies of your old mail from major post offices only. Small town offices usually do not
keep copies
Department of post, Government of India at all post office counters in the country. The
scheme is meant for investors who want to deposit a fixed amount every month, in order
to get a lump sum after five years. The scheme, a systematic way for long term savings, is
one of the best investment option for the low income groups.
Features
The minimum investment in a post-office RDA is Rs 10 and then in multiples of Rs. 5/-
for a period of 5 years. There is no prescribed upper limit on your investment. The
deposit shall be paid as monthly installments and each subsequent monthly installment
shall be made before the end of the calendar month and shall be equal to the first deposit.
In case of default in payment, a default fee is chargeable for delayed deposit at 0.20 Paise
per month of delay, for Rs.10 Denomination. After more than four defaults, the account
shall be treated as discontinued in case the account is not revived within two months from
For Advance deposits for 6 months or 12 months, a rebate is allowed at the prescribed
rate (For Rs 10 denomination:- Rs.1/- for 6 advance deposits, Rs.4/- for 12 advance
deposits.
One withdrawal is allowed after one year of opening a post-office RDA on meeting
certain conditions. You can withdraw up to half the balance lying to your credit at an
interest charged at 15%. The withdrawal or the loan may be repaid in one lump or in
Premature closure is allowed on completion of three years from the date of opening and
in such case, interest is payable as per the rate applicable for the Post Office Savings
Bank Account.
After maturity of the account, it can be continued for a further period of 5 years with or
without further deposits. During this extended period, the account can be closed at any
time.
Advantages
The post office offers a fixed rate of interest unlike banks which constantly change their
recurring deposit interest rates depending on their demand supply position. As the post
amount in the Recurring Deposit Account is assured. Moreover Interest earned on this
Post Office Savings Account: These accounts promote the habit of thrift in
Post Office Recurring Deposit Scheme: This scheme offers facility of saving
retirement benefits.
scheme offers tax free income to retired employees of Public Sector Undertakings
Post Office Senior Citizens Savings Scheme: This scheme provides facility of
earning regular interest income relatively higher Interest Rate to senior citizens on
Post Office Time Deposit Scheme: This scheme offers facility of long term
Post Office Monthly Income Scheme: This is the only scheme available at
a company (called the issuer) issues common stock or shares to the public for the first
time. They are often issued by smaller, younger companies seeking capital to expand, but
can also be done by large privately-owned companies looking to become publicly traded.
In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it
determine what type of security to issue (common or preferred), best offering price and
An IPO can be a risky investment. For the individual investor it is tough to predict what
the stock or shares will do on its initial day of trading and in the near future since there is
often little historical data with which to analyze the company. Also, most IPOs are of
companies going through a transitory growth period, and they are therefore subject to
investors in the public. Generally, the company offers primary shares this way, although
sometimes secondary shares are also sold as IPOs. For a company to offer IPOs, they
need to hire a corporate lawyer as well as an investment banker to underwrite the offer.
The actual sale of the shares is generally offered by stock exchange or by regulators.
When the company starts to offer IPOs, they are usually required to reveal financial
information about the company so that investors know whether the companies a good
investment or not.
While contemplating the idea of taking a company public via an IPO (Initial Public
Offering), the increased capitalization for the issuing business is a strong point to
consider, since a public offering creates a market value on a company’s stock. Company
directors and shareholder can retain their stock and use it for varied activities, such as:
currency for mergers and acquisitions, as stock options to help retain key personnel, they
Additionally, the business will have greater access to the capital markets for future capital
inflow. In general terms, a company’s valuation and debt-to-equity ratio will improve
after going public, making it possible for the company to receive much better terms from
lenders.
There is no doubt that offering securities to the investment public will help a company’s
management and directors retain a large degree of control, as opposed to many other
For example, if a private company decides to use the services of venture capitalists to
raise capital, instead of going public, the VC’s (Venture Capitalists) might insist on a
decides to raise capital via the going public process of an IPO (Initial Public Offering),
No doubt the prestige related with becoming a public company has a definite appeal. The
fact that it’s easier to promote a public company is also a pertinent consideration because
the funding resources available to public companies are much better than what’s available
to private concerns.
Public companies have historically achieved higher recognition than private companies;
hence, the public relations image and the perceived stability of being a public company is
a plus. All the above considerations should come into play when you are considering the
pro’s and con’s of going public via an IPO (Initial Public Offering).
GOVERNMENT SECURITIES
Government securities(G-secs) are sovereign securities which are issued by the Reserve Bank of India on
behalf of Government of India,in lieu of the Central Government's market borrowing programme.
Treasury bills
The Central Government borrows funds to finance its 'fiscal deficit'.The market borrowing of the Central
Government is raised through the issue of dated securities and 364 days treasury bills either by auction or
by floatation of loans.
In addition to the above, treasury bills of 91 days are issued for managing the temporary cash mismatches
of the Government. These do not form part of the borrowing programme of the Central Government.
Government securities are one of the safest in the market. Available at the
primary and secondary market of securities, they are avidly searched by all kinds of
financial institutions. Their faultless history, spectrum of choices and high liquidity gives
Nomenclature
The coupon rate and year of maturity identifies the government security.
6.90% is the coupon rate, GOI denotes Government of India (which is the borrower),
Eligibility
All entities registered in India like banks, financial institutions, Primary Dealers, firms,
organisations, Nepal Rashtra bank and even individuals are eligible to purchase
Government Securities.
Availability
Government securities are highly liquid instruments available both in the primary and
secondary market. They can be purchased from Primary Dealers. PNB Gilts Ltd., is a
leading Primary Dealer in the government securities market, and is actively involved in
Minimum Amount
amount of Rs 25000/- only and in multiples thereof. State Government Securities can be
Repayment
Government securities are repaid at par on the expiry of their tenor. The different
For SGL account holders, the maturity proceeds would be credited to their current
collected by their DP's and they in turn would pay the demat Account Holders
fluctuations in the government security prices and thus there exists a price
maturity.
source and hence the investor having non taxable gross income need not
account that pays higher than savings account interest rates but imposes conditions on the
normally issued only for time deposits. Also called fixed deposit.
placed on deposit under the name of the account holder. The money placed on deposit
earns a fixed rate of interest, according to the terms and conditions that govern the
account. The actual amount of the fixed rate can be influenced by such factors at the type
of currency involved in the deposit, the duration set in place for the deposit, and the
The most unusual characteristic of a fixed deposit is that the funds cannot be withdrawn
for a specified period of time. In most cases, fixed deposits carry a duration of five years.
During that time, the money remains in the account and cannot be withdrawn for any
reason. Individuals, corporate entities, and even non-profit organizations that wish to set
aside funds and limit their access to the funds for a period of time often find that fixed
deposits are a simple way to accomplish this goal. As an added benefit, the monies in the
account will earn a fixed rate of interest regardless of any fluctuations in interest rates
However, both these benefits can also turn into disadvantages under certain
circumstances. Because the money cannot be withdrawn until the duration is complete,
the funds cannot be used even in emergency situations. Changes in the going interest rate
may also rise to a point above and beyond the interest rate applied to existing deposits.
This means account holders are actually earning less interest with fixed deposits than
While the interest rate on fixed deposits cannot be changed, there is sometimes a way to
work around the issue of obtaining use of funds in an emergency situation. At times, the
lending institution where the fixed deposit is placed may be willing to extend a separate
loan to the account holder, using the fixed account as collateral. While not ideal, this can
Fixed deposits are a credible way to make a return on investment that is somewhat higher
than a standard savings account. The use of fixed deposits can also be helpful when
Currency Fixed Deposit or FCFD, it is possible to choose the type of currency involved
in the deposit and lock in a rate of interest. If the choice of currency is a good one, this
means the investor can enjoy a healthy fixed deposit currency rate for the duration of the
deposit and earn more than with a standard fixed deposit strategy. However, going with
an FCFD does contain a slightly higher amount of risk, since the funds deposited must be
converted to the currency of choice and then converted back when the deposit is fulfilled.
If the currency did not fare well in the interim, there is some chance of obtaining a loss,
due to the changes in the rate of exchange from the time the fixed deposit was activated
Any investment portfolio should comprise the right mix of safe, moderate and risky
investments. While mutual funds and stocks are the favorite contenders for moderate and
risky investments, fixed deposits, government bonds etc. are considered safe investments.
Fixed deposits have been particularly popular among a large section of investors in India
With fixed deposits or FDs as they are popularly known, a person can invest an amount
for a fixed duration. The banks provide interest rates depending on this loan amount and
the tenure of deposit. Here are the benefits, drawbacks of fixed deposits and precautions
1.Safety
The fixed deposits of reputed banks and financial institutions regulated by RBI (Reserve
Bank of India) the banking regulator in India are very secure and considered as one of the
2 Regular income
Fixed deposits earn fixed interest rates for their entire tenure, which is usually
compounded quarterly. So, those who want an income on a regular basis can invest into
fixed deposits and use the interest rate as their income. This makes a fixed deposit very
3.Save tax
With the directives of the income tax department stating that investment in fixed deposits
up to a maximum of Rs.100,000 for 5 years are eligible for tax deductions under section
80 C of income tax act, fixed deposits have again become popular. Fixed deposits save
Drawbacks
1.Lower rate of returns
While the money invested in stock markets may give you a return of 20% the fixed
deposits will yield only about 10%. So, the money grows slowly in the case of fixed
deposits.
2. Taxes
The interest earned on fixed deposits is fully taxable and is added to the annual income of
the individual. Gains from stocks are considered capital gains while dividends are tax
free.
The actual benefits or income from fixed deposit can be annulled by a rising inflation.
Suppose the inflation which is currently at 3 % rises to about 6%, your fixed deposit at
10% annual return will effectively yield only(10%-6%) = 4% of return. This return would
have been (10% -3%) = 7% if the rate of inflation had not changed. This can drastically
instrument that combines adequate returns with high safety. NSCs are an instrument for
facilitating long-term savings. A large chunk of middle class families use NSCs for
saving on their tax, getting double benefits. They not only save tax on their hard-earned
income but also make an investment which are sure to give good and safe returns.
How to invest
National Savings Certificates are available at all post-offices. The application can be
made either in person or through an agent. Post office agents are active in nooks and
Single Holder Type Certificate: This can be issued to: (a) An adult for himself or
Joint 'B' Type Certificate: Issued jointly to two adults payable to either of the
A trust
National Savings Certificates are available in the denominations of Rs. 100 Rs 500, Rs.
1000, Rs. 5000, & Rs. 10,000. There is no maximum limit on the purchase of the
certificates. So it is for you to decide how much you want to put in the NSCs. This is of
course a huge benefit for you can decide as much as your budget allows.
Maturity
Period of maturity of a certificate is six years. Presently interest paid is 8 % per annum
discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered
by a court of law.
Tax Benefits
Interest accrued on the certificates every year is liable to income tax but deemed
Income Tax rebate is available on the amount invested and interest accruing under
Income tax relief is also available on the interest earned as per limits fixed vide
Public Provident Fund, popularly known as PPF, is a savings cum tax saving instrument.
It also serves as a retirement planning tool for many of those who do not have any
structured pension plan covering them. The balances in PPF account cannot be attached
Public Provident Fund account can be opened at designated post offices throughout the
country and at designated branches of Public Sector Banks throughout the country.
The account can be opened by an individual in his own name, on behalf of a minor of
whom he is a guardian.
Tabs on Investment
Minimum deposit required in a PPF account is Rs. 500 in a financial year. Maximum
deposit limit is Rs. 70,000 in a financial year. Maximum number of deposits is twelve in
a financial year.
Maturity
year.
The amount of deposit can be varied to suit the convenience of the account
holders.
The account holder can retain the account after maturity for any period without
making any further deposits. In this case the account will continue to earn interest
The account holder also has an option to extend the PPF account for any period in
Lapse in deposit
If deposits are not made in a PPF account in any financial year, the account will be
minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.
Premature Closure or Withdrawl
Nominee/legal heir of PPF Account holder cannot continue the account after the
death.
limit of 50% of the amount at credit preceding three year balance. Thereafter one
Account transfer
The Account is transferable from one post Office / bank to another and from post Office
Tax Benefits
Deposits in PPF are eligible for rebate under section 80-C of Income Tax Act.
AND
REFRENCES
CONCLUSION
The project will carry out the customer perception and awareness level about various
financial instruments. In my research project the conclusion which will derive after the
survey based upon following points which will the outcome of the survey.
b) What are the factors which a customer consider while investing in any Financial
Instrument.
e) How long they prefer to keep their money in any financial instrument.
questionnaire for the completion of my summer training project. I promise that all the
answer provided by you would be kept confidential. This questionnaire is purely for
education purposes.
Q2. What are the factors which you consider while investing in any Financial
Instrument?
Safety ( )
Return ( )
Risk ( )
Tax saving ( )
Any other reason………………………………………
Q3. On what basis you will invest in any particular financial Instrument?
Past performance ( )
Portfolio ( )
Fund manager ( )
Market sentiment ( )
Any other reason………………………………………
Q 5. How long you prefer to keep your money in any financial instrument?
Less than 1 year ( )
1 year to 3 year ( )
3 year to 5 year ( )
More than 5 year ( )
Q6. How much of your money you invest in any financial instrument?
10% to 15% ( )
15% to 30% ( )
30% to 50% ( )
More than 50% ( )
Q7. How much return you expect from any financial instrument?
Less than 10% ( )
10%-20% ( )
20%-30% ( )
More than 30% ( )
Q8. Will you invest your money for saving the tax in any financial instrument?
Yes ( ) No ( )
Q9. In which financial instrument you will invest to save the tax?
Insurance ( )
PPF(public provident fund) ( )
NSC’s(national saving certificate) ( )
Q10. Are you satisfied with your investment decision, please rate?
Highly satisfied ( )
Satisfied ( )
Less satisfied ( )
No satisfaction ( )
should be launched. Lack of money is the major factor explaining the low take up of
mutual funds by those on low incomes. But another key is a lack of understanding of the
benefits and importance of mutual funds. The aim should be to raise awareness and
Customer service follows the same principle – truly delivering good service relies on a
number of positive elements all working in unison. The customer expects better services
from the company. So if any customer is visiting the workplace, tidiness should be there
at workplace. If there is high volume of calls, the available solutions should be there that
Raising awareness
Mutual fund industry should run regular campaigns to raise public awareness of better
management, involving a wide range of issues from promoting better road safely to
All those firms who are into mutual fund distribution what they did they always try to
fetch out the investments from the existing clients like they do not try to catch the new
customers, so therefore with the help of kiosk marketing and cold calling they should try