SUMMER INTERNSHIP PROGRAMME (SIP)

WEEKLY REPORT-1

FOR

JOHN BROS FINANCIAL SERVICES

BATCH 2020-22
By-RAGINI VERMA

Rollno-20BFS38

MBA-Banking & Finance

Under the guidance-Prof. VIJETA SINGH

Submitted to –

MIT-World Peace University

Faculty of Management (PG)

In partial fulfillment of the requirement for the award of Degree of Masters in
Business Administration

Submitted through-

MIT-WPU School of Management, Pune

 WEEKLY PROGRESS REPORT

Weekly Progress Report No. - _1_____ Day&DateMonday-Monday/___14th June

2021______

Tasks performed on Monday: 7th June 2021

- Induction program was conducted by the company.
- A framework about the tasks and assignments to be performed in 2months has been
discussed.
-There was webinar by Mr. Nilesh Shah , MD of Kotak Mahindra Asset Management Co. on
market outlook and its performance , impact of Covid-19 (attachment below)

Tasks performed on Tuesday: 8th June 2021

-An assignment on BFSI sector of India was given.
- We had to prepare detailed report on the sector. (attachment of the report below)

Tasks performed on Wednesday: 9th June2021

-No task given

Tasks performed on Thursday: 10th June 2021

-Assignment on various investment options available in India was given.
-Had to prepare a report on the points- advantages/disadvantages, risk and returns and
liquidity factors.

Tasks performed on Friday: 11th June 2021

-A meeting was conducted.
-Detailed discussion has been conducted on various investment options.
-Got to know more about other new investment options that are not included in my report.
(attachment of the report below)
-Discuss importance of investing.

Tasks performed on Saturday: 12th June 2021

-A meeting was conducted and discussion on Mutual Funds.
 -A brief training on investment calculation of the mutual funds was given.

Learnings in the last week:

-Learned about BFSI sector of India and the current market scenario , also the impact of
Covid-19 in BFSI sector.
-Learned about various investment options available in India along some other new
investment options.
-Learned about Mutual Funds & its types.

Cumulative Progress till date (% of total Work):

-Assignments was given, no other work.
Plan for this week:
-Training session on Mutual Funds & Health Insurance.
-Sales pitch learning.
A document with details about each task performed to be attached with this report.

Name & Signature of Student: ____RAGINI VERMA

__________________________________________

Endorsed By: Mr.Meril John

Mobile no-8419057609

Email id- [email protected]_

Company- John Bros Financial Services

(Name of Guide from host organization)

(Attachments given below)

 ATTACHMENTS

On 7th June 2021

MARKET OUTLOOK OF 2021
BY Mr. Nilesh Shah

Topics of the discussion-

- The market performance in 2021-2021
- Implications of Union Budget on financial sector
- Impact of pandemic on the economy.
- Sector wise performance
- Kotak Mahindra’s Mutual Funds and plans
 BFSI SECTOR IN INDIA
-Ragini Verma
-8 th June 2021

INTRODUCTION-

BFSI stands for Banking, Financial Services & Insurance Sector. It represents major portion of
India’s multi-billion Indian economy comprises of Banking services, Financial services and
Insurance services along with Non-Banking financial institutions.
BFSI industry largely includes financial services firms such as Asset Management or Broking firms.
India, as a business objective, encourages every one of the positives for the BFSI area to prosper at
an extensive speed. Between elements of administration strategy, dynamic public/private
association, solid prohibitive measures, and innovative development have prodded the BFSI area to
enlist durable numbers as of late.

One of the major pillars of this industry is Banking which comprises of the following :-

BANKING SECTOR-
HISTORY OF BANKING INDUSTRY-

1. The Indian Banking Industry laid its foundation in the 18th century.

2. The General Bank of India (1786) & Bank of Hindustan (1770) are the very first banks in
India.

3. RBI was established on April 1935 but got initially nationalized on January 1st, 1949.

4. In 1949, Banking regulation act was enacted which mainly empowered RBI to regulate,
control and inspect banks in India.

5. There are more than 31 nationalized & private banks.

STRUCTURE-

BREIF-

1. CENTRAL BANK (RBI)-

This bank is the most highest in the hierarchy of any public economy holding administrative
forces to manage the working of the public (confined to a nation) banking industry. It
approves the flow of cash, lessening or expanding something similar to hold expansion under
wraps. Just the Central Bank of a nation has the ability to print the paper money of a country.
In India, the Reserve Bank of India is called Central Bank of the country.

2. SECHEDULE COMMERCIAL BANKS-

They are classified into 3 categories-

 PUBLIC SECTOR BANKS-

It refers to those banks wherein the public authority claims the dominant part stake i.e
more than 50% and whose offers are recorded on open trades. Implied from April
first, 2020, the total of dynamic public area banks has been reduced from 27 to 12.
This is the consequence of a couple of PSBs being converged under a single prior or
 pre-existing banks. Some examples are Vijaya bank and Dena bank merged into
Bank of Baroda.

 PRIVATE SECTOR BANKS-

This refers to banks where majority of stake or control is handled by private

shareholders. The Indian economy has 22 such banks , for example HDFC, ICICI,
AXIS Banks etc.

 FOREIGN BANKS-

This refers to any bank that is settled external India. Host-nations (for this situation
India) enjoy a double advantage as foreign banks speed up dealings in global
exchanges alongside expanding the business scope in the financial area and increasing
the employment opportunity in banking sector. There total 45 foreign banks in India
including Citi bank , HSBC, Standard Charted bank.

3. REGIONAL RURAL BANKS-

By definition, their incorporation is planned by the government of India, basically making

them government banks. Their essential goal is to serve the country locales where they are
sanctioned to be set up, nonetheless, this isn't to be mistaken for a legal limitation to extend.
RRBs may or may not have branches in urban areas.
For example Karnataka Vikas Grameen Bank.

4. COORPORATIVE BANKS-

Their goal is to provide social government assistance, henceforth the plans are focused
towards under-privileged or monetarily under-service areas of the general public. Despite the
fact that they invite business from all financial areas, the approaching capital is used to
concede advances to the middle class like agriculturists.
They function on a no profit, no loss basis & divided into following types-

 State co-operative banks

 Primary Credit Society Banks
 District Central Co-operative Banks
 Urban Co-operative Banks
5. SEPEIALISED BANKS-

Their services are limited to a particular industry. They are of 3 types

 Export-Import banks
 Small Industry Development Bank of India
 National Bank of Agriculture & Rural Development

6. DEVELOPMENT BANKS-

Such institution are also called to as development finance institutions or a development

finance company. They give capital help to financial improvement projects. Their goal isn't to
make a benefit yet advance social turn of events and such banks might be set up by either the
administrations or beneficent organizations.
Examples are Industrial Finance Corporation of India (IFCI) & State Finance Corporations.

7. SMALL FINANCE BANK-

They target such sections of society by other banks such as micro industries, unorganized
sector, small or marginal farmers.

8. PAYMENT BANKS-

Except for issuing loans and credit cards to customers, Payments Bank accept restricted
deposits from customers up to INR 1, 00, 000. Their portfolio of services includes issuing
debit/ATM cards, current/savings account, and offer mobile banking and financial services to
customers. 

9. Non-Banking Financial Institutions (NBFCs)-

NBFCs are financial institutions offering types of banking services yet they don't have a
financial permit. From a traditional perspective, NBFCs are not permitted to acknowledge
demand deposits or supports in savings deposit in a bank account, from the general
population. Their extent of administrations could incorporate contribution

According to government-funded research, the Scheduled Commercial Banks contain the

biggest portion of the banking sector (76.1%), trailed by the NBFCs (15.4%), Cooperative
Banks (6.8%), lastly, Regional Rural Banks (1.7%). Over the most recent thirty years,
specifically, the Indian Banking industry has come a wide margin to its present-day picture of
a worldwide monetary force to be reckoned with. This forward steps of ground breaking
ventures with rejuvenate the economy can be followed to 1991-1997 when the passage of
new private area banks injected rivalry in a generally dormant industry.

MARKET SIZE -

The Indian financial framework comprises of 12 public sector banks, 22 private sector banks,
46 foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural
cooperative banks notwithstanding helpful acknowledge foundations As of November 2020,
the complete number of ATMs in India expanded to 209,282.

Resource of public area banks remained at Rs. 107.83 lakh crore (US$ 1.52 trillion) in FY20.

During FY16-FY20, bank credit developed at a CAGR of 3.57%. As of FY20, all out credit
stretched out to US$ 1,698.97 billion.

During FY16-FY20, developed at a CAGR of 13.93% and arrived at US$ 1.93 trillion by
FY20. Credit to non-food businesses remained at Rs. 105.53 trillion (US$ 1.44 trillion), as of
January 15, 2021.Non-food ventures developed at 5.7% in January 2021 as against an
expansion of 8.5% in January 2020.
FINANCIAL SECTOR -

Second most important pillar is financial market industry-

INTRODUCTION-

India has an expanded financial sector going through fast extension, both as far as solid
development of existing financial services firms and new entities entering the market. The
area involves corporate banks, insurance agencies, non-banking financial organizations, co-
operative societies, mutual funds, common assets and other small financial institutions. The
banking regulator has permitted new entities, for example, payments banks to be made as of
late, accordingly adding to the kind of entities working in the area. Nonetheless, Financial
sector in India is prevalently a financial area with business banks representing over 64% of
the all out resources held by the financial system.

The Government of India has introduced a few changes with change, direct and upgrade this
industry. The Government and Reserve Bank of India (RBI) have taken different measures to
facilitates to fund for Micro, Small and Medium Enterprises (MSMEs). These actions
incorporate dispatching Credit Guarantee Fund Scheme for MSMEs, giving rule to banks in
regards to security prerequisites and setting up a Micro Units Development and Refinance
Agency (MUDRA). With a joined move by Government and private area, India is without a
doubt one of the world's most energetic capital business sectors.

STRUCTURE-
MARKET SIZE-

As of January 2021, AUM managed by the mutual fund industry remained at Rs. 32.29 lakh
crore (US$ 438.27 billion). Inflow in India's mutual fund plans through the Systematic
Investment Plan (SIP) course arrived at Rs. 82,453 crore (US$ 11.70 billion) in 2019. Value
shared assets enlisted a net inflow of Rs. 8.04 trillion (US$ 114.06 billion) by end of
December 2019.

Another crucial part of India's financial industry is the insurance business. Insurance industry
has been extending at a high speed. The total first year expense of extra premium arrived at
Rs. 2.59 lakh crore (US$ 36.73 billion) in FY20.

Besides, India's driving bourse, Bombay Stock Exchange (BSE), will set up a joint endeavor
with Ebix Inc to fabricate a strong insurance distribution network in the country through
another appropriation trade stage.

Raising support from the equity market developed by 116% to Rs. 1.78 lakh crore in Initial
public contribution (IPOs), Offer available to be purchased (OFS) and other market issuances
in 2020. In FY20, the quantity of recorded organizations on the NSE and the BSE were 1,795
and 5,377, individually.
INSURANCE SECTOR-
Third most important pillar –

INTRODUCTION-

The insurance sector of India has almost 57 insurance companies out of which 24 are in Life
insurance business and 33 are in Non-Life insurance business.
Out of these life insurance companies LIC (LIFE INSURANCE COOPERATION) is the
only public sector company. In addition to this , there is only one national re-insurer named
General Insurance Cooperation of India. In case of other elements there are also insurance
agents, broker , third-party administrative.

STRUCTURE-

MARKET SIZE-
In India, the general market size of the Insurance sector is almost US$ 280 billion.

The Life Insurance Sector is expected to hike at a CAGR of 5.3% somewhere in 2019 and
2023. India's insurance penetration was fixed at 3.76% in FY20, with life coverage insurance
at 2.82% and non-life coverage insurance at 0.94%. As far as insurance sector growth
concerned, it will remained at US$ 78 in FY20.

The market share of the private sector companies in the general and medical insurance
market expanded from 47.97% in FY19 to 48.03% in FY20. In life insurance portion, private
players held market of 33.78% in premium services in FY20.
 In FY21 (until February 2021), premium from new business of life insurance companies in
India remained at US$ 31.9 billion.

Net expenses of non-life insurance plans in India arrived at US$ 24.41 billion in FY21
(between April 2020 and February 2021), from US$ 24.55 billion in FY20 (between April
2019 and February 2020), driven by solid development from general insurance agencies.

RECENT DEVELOPMENT IN BFSI SECTOR-

BANKING SECTOR-
1. In 2019, banking sector saw 32 M&A (merger & acquisition) exercises worth US$ 1.72
billion.

2. In March 2020, State Bank of India (SBI), India's biggest lender, brought US$ 100 million up
in green bonds through private placements.

3. In February 2020, the Cabinet Committee on Economic Affairs gave its approval for
continuation of the cycle of recapitalization of Regional Rural Banks (RRBs) by giving least
capital funding to RRBs for one more year past 2019-20 - till 2020-21 to those RRBs which
can't keep up least Capital to Risk weighted Assets Ratio (CRAR) of 9% according to the
regulatory norms recommended by RBI.

4. The NPAs (Non-Performing Assets) of commercial banks recorded recovery of Rs. 400,000
crore (US$ 57.23 billion) over the most recent four years including record recovery of Rs.
156,746 crore (US$ 22.42 billion) in FY19.
 FIANANCE SECTOR-

1. In Nov 2020, RBI announced to set up innovation hub, in order to encourage financial
services. The Innovation Hub of RBI intend to provide smooth financial services by bringing
technology and innovation.

2. In January 2021, Sundaram Asset Management Company declared the acquisition of

Principal Asset Management for Rs. 338.53 crore (US$ 46.78 million).

3. In January 2021, the National Stock Exchange (NSE) launches derivates on the Nifty
Financial Service Index. This assistance is probably going to give foundations to institutions
and retail customers with greater adaptability to deal with their funds.

INSURANCE SECTOR-

1. In February 2021, Edelweiss General Insurance marked partnership with Okinawa

Autotech Pvt Ltd. to use the broad dealer network of Okinawa (~350 vendors as of
Feb. 2021) across India to give simple, end-to-end, techno-friendly solutions.

2. In February 2021, Star Health Insurance partnered together with PhonePe to offer
digital health care insurance on PhonePe, through its Arogya Sanjeevani strategy.

3. In February 2021, Future Generali India Insurance dispatched 'Wellbeing Super Saver'
insurance plan, with a 80% discount.
4. In February 2021, ICICI Lombard General Insurance, a non-life insurance firm in the
private sector, has been approved by the International Financial Services Center
(IFSC) to build up an IFSC Insurance Office (IIO) in GIFT City in Gandhinagar,
Gujarat.
DRIVERS THAT TRANSFORM BFSI SECTOR IN INDIA-

There are serval drivers playing major role in transforming BFSI Sector-
 PAYMENT BANKS ALONG WITH FINTECH

 AI & COGNITIVE ANALYTICS

 ROBOTICS PROCESS AUTOMATION

 BLOCKCHAIN

 CYBER-SECURITY

 GAMIFICATION IN BANKING AND FINANCIAL TECHNOLOGY

 BIG DATA TECHNOLOGY

 PREDICTIVE ALGORITHMS

FUTURE OF BFSI SECTOR IN INDIA-

1. In order to summarize the future in one word then it will be-“ digital”.

2. This means converting manual basis into digital format with a whole new way of thinking,
creativity and innovation.

3. These processes help banks and other financial institutions to explore, by using technologies
like AI, Robotics Process Automation, Blockchain etc.
4. Digitalization on the same hand provides security and cost-efficiency, but its true potential
lies in creating ‘value’ for its customers.

5. People are able to manage their finances with just one tap, in one place and with automatic
deposits or payments anytime.

6. One of the most important tool is FIN-TECH institutions, changing the whole picture of BFSI
sector in India, by replacing traditional methods over technology and innovation.

IMPACT OF COVID-19 ON BFSI SECTOR-

Covid-19 adversely affected many areas of BFSI Sector-

 NON-PERFORMING ASSETS-

According to recent report banks NPA has been increased up to 2.99% in FY2020 and
this can further worsen the ratio of 130 basis points. RBI has taken corrective steps by
reducing interest rates and providing easy liquidity, with relaxing loan norms.

 BANK PROFITABILITY-

Credit costs with low credit cost projecting low bank profitability measured by Return
on Assets Ratio. ROA is likely to reduced by 50-90 points.

 NIM & OTHER IMPACT-

Covid -19 adversely impacting NIM of financial sector. NIM growth mainly based
upon Capital adequacy and Current Savings Account that has been decline, right now.
And in up coming times it will reduce more because of increasing NPAs.

 IMPACT ON INSURERS-

Insurers are getting affected as far as their assets and liabilities reflected yet to be in
balance sheet. This, subsequently, compromises their business continuity just same
as future development. The pandemic is an analysis for Insurance institutions that
how effectively they are handling the situation, by easing the regulatory norms.
GOVERNMENT INITIAVTIVES IN BFSI SECTOR-

 Union Budget 2021 expanded FDI limit in insurance sector from 49% to 74%. India's
Insurance Regulatory and Development Authority (IRDAI) has declared the issuance,
through Digilocker, of computerized protection arrangements by protection firms.

 Under the Union Budget 2021, Finance Minister Ms. Nirmala Sitharaman declared
that the initial public offering (IPO) of LIC will be executed in FY22, as a feature of
the solidification in the banking and protection area. Despite the fact that no
conventional market valuation has been embraced, LIC's IPO can possibly raise Rs. 1
lakh crore (US$ 13.62 billion)

 In December 2020, the Reserve Bank of India gave a draft circular on declaration of
profits by NBFCs, wherein its suggested that NBFCs ought to have in any event 15%
Capital to Risk Weighted Assets Ratio (CRAR) throughout the previous 3 years,
including the accounting year for which it proposes to proclaim a profit.

 In November 2020, the Union Cabinet supported the public authority's value infusion
plan for Rs. 6,000 crores (US$ 814.54 million) in the NIIF Debt Platform subsidized
by the National Investment and Infrastructure Fund (NIIF) comprising of Aseem
Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited
(NIIF) (NIIF-IFL).

 As per Union Budget 2021, government disinvest IDBI bank and privatize 2 public
sector banks.

VARIOUS INVESTMENT OPTIONS

AVAILABLE IN INDIA
 By-Ragini Verma

-10th June 2021

Every investor wants to invest in the best investment options, where there is more or
high returns and low risk involved. Some people invest to achieve financial security
and some others wants to fulfill their investment goals. The investment options should
always be based on person’s risk appetite, investment horizon, financial goals and
liquidity needs.

There are basically 2 types of investment products and they are Financial & Non-
financial assets. Financial assets further divided into 2 categories- Market-linked
investments which includes stocks & mutual funds. Fixed Income investments like
bank fixed income deposits or PPF. In case of Non-Financial assets people further like
to invest in real estates or gold options.

Here is a look at investment options on which Indians take a look at while savings for
financial goals:-

1. PUBLIC PROVIDENT FUNDS (PPF)-

Its one of the steady long-term investment option available in India. It is tax-
free and the account can be opened either in bank or in post office. The money
invested in the account is locked for the period of 15 years.
Moreover, in this option people can earn compound interest on accumulated
money. A person can also extend the lock-in period up to 5 years.

Rates of PPF over last 3 Years-

ADVANTAGES OF PPF A/C-

 The account is backed by Central Government.

 Maturity of (Principal & Interest) PPF is exempt from tax.
 PPF facility is available for minors as well.
 Loan Facility available from Banks.
 Partial withdrawl facility also available on PPF.
 Minors can also avail this.

DISADVANTAGES OF PPF A/C-

 Cannot be availed by HUF, NRI & Trusts.

 Lacs in Liquidity.
 Lock in period (15 Days).
 Cannot be closed before maturity.
 Offers lower

LIQUIDITY-

The PPF is liquid, notwithstanding the 15-year lock-in specified with this
account. Liquidity is offered as loan against the PPF from the third year
and withdrawals subject to conditions from the seventh year.

RISK & RETURN-

PPF is the most secure way of keeping savings as it holds a fixed rate of return on
investment backed by Government of India. Every other Investment scheme contains
a portion of uncertain percentage of Interest on savings except PPF.
2. MUTUAL FUNDS-

Mutual Funds are a magnificent option alternative for investors to get openness to a specialist
oversee portfolio. Likewise, you can expand your portfolio by putting resources into common
assets as the resource distribution would cover a few instruments. Investors would be
apportioned with store units dependent on the sum they contribute. Every Investor would
henceforth encounter benefits or losses that are direct corresponding to the sum they
contribute. The fundamental expectation of the fund manager is to give ideal re-visitations of
funds by putting resources into protections that are in a state of harmony with the asset's
targets. The presentation of mutual fund is reliant upon the basic resources.

TYPES OF MUTUAL FUNDS-

 Equity mutual funds

 Debt mutual funds
 Balanced or Hybrid mutual funds

ADVANTAGES-

 The fund manager spreads the investment across stocks of organizations across different
companies and various industries called broadening or diversification. In case if, one
resource class doesn't play out, different sectors can repay to stay away from loss.
 Less cost for bulk transaction , so if a person buys multiple units of a mutual fund the
processing fees and commission charged will be less as compared to buying single unit.
 They are also cost efficient , as the investor can check the expense ratio of mutual funds and
can choose the lowest one. The expense ratio is the fee to manage the mutual funds.
 It also provides tax efficiency, with tax-saving mutual funds called ELSS. It attracts tax
deduction of Rs1.5 lakh p.a under section 80C of Income Tax Act.
 Systematic or one time payment options are also available.

DISADVANTAGES-

 Costs of managing the mutual funds is higher than expected as it involves fund managers and
market analysts fees too.
 Exit load is high, as it charges a huge chunk of amount in case you are exit the mutual fund
options.
 Dilution at the time of diversification.

LIQUIDITY-

All mutual funds are liquid as in they are not difficult to purchase and sell. Toward the finish
of each trading day , all mutual funds orders are executed at the fund's net asset value.
Vanguard or some mutual funds will be comparably fluid as stock.

RISK & RETURNS-

The degree of risk in a mutual funds relies upon up to the amount into. Normally, the higher
the possible returns, the higher the danger will be. For instance, stocks are for the most part
more hazardous than securities, so a value store will in general be more dangerous than a
fixed pay store.

3. NATIONAL PENSION SCHEME (NPS)-

The National Pension System is a drawn out retirement - centered investment item managed
by the Pension Fund Regulatory and Development Authority (PFRDA). The base yearly
(April-March) commitment for a NPS Tier-1 record to stay dynamic has been diminished
from Rs 6,000 to Rs 1,000. It is a blend of value, fixed stores, corporate securities, fluid
assets and government assets, among others.

ADVANTAGES-

 At the time of investment it provides choice between auto and active.

  The investment made in Tier 2 , get the high return , needs a long period of time, to be
substantial amount at the time of retirement. The amount also get accumulated in Tier
1 accounts too.
 No restriction in frequency distribution, one can deposit whether half yearly ,
quarterly , annually etc.
 Easy documentation process
 Wide coverage and provides bigger canvas
 Tax exemption of 1.5 lakh p.a under section 80C of Income tax act.

DISADVANTAGES-

 Withdrawal limits, before the person reaches their 60. Can make only 3 withdrawals,
1st is after 10 years only.
 Taxation at the time of withdrawal, in case of NPS corpus, person uses it for buying
annuity or pension schemes , the 60% amount is taxable.
 No guaranteed returns
 Restriction on opening the account.

LIQUIDITY-

After three years of being in the scheme, you can pull out up to 25 percent of the
contributions for defined costs. These defined costs are kids' education or weddings, development or
acquisition of the principal house, and treatment of basic disease for self, life partner, kids or ward
guardians. The guidelines have characterized 13 basic diseases and have stretched out this office to
mishaps or different illnesses of a hazardous sort.

The highlight note is that as far as possible will be determined on the contributed sum, not on the
account balance. Assume you have contributed Rs 5,000 every month for a 10 years, you will be
qualified to pull out Rs 1.50 lakh, for example 25% of Rs 6 lakh. You can make up to three
withdrawals during the tenure.
 RISK & RETURN-
NPS is ideal for long term investment, as the profits increment by a distribution sum contingent
upon the asset classes. Be that as it may, there is no pre-decided accumulating rate for National
Pension Scheme returns; a financial investor can decide the get back with the assistance of the
Compounded Annual Growth Rate of every resource over the long term.

Presently, there is a cap in the scope of 75% to half on value openness for the National Pension
Scheme. For government representatives, this cap is half. In the reach endorsed, the value bit will
decrease by 2.5% every year starting from the year in which the financial backer turns 50 years old.

4. BANK FIXED DEPOSITS (FD)-

A bank fixed deposit is considered a similarly more secure (than equity or mutual funds)
decision for putting funds into India. Under the deposit insurance and credit guarantee
corporation (DICGC) rules, every investor in a bank is safeguarded up to a limit of Rs 5 lakh
with impact from February 4, 2020 for both head and premium sum.

Prior, the inclusion was limit of Rs 1 lakh for both head and interest sum. According to the
need, one may choose month to month, quarterly, half-yearly, yearly.

ADVANTAGES-

 It provides assured returns, over a specific time with the interest.

 Tax threshold for interest, banks are not allowed to deduct any tax until the amount
reaches Rs10000.
 Flexible tenures depends upon the account holders.
 Easy liquidation via manually or through online banking too.
 DISADVANTAGES-

 Reducing rate of interests

 Locked inn period issue
 Penalties on withdrawals

LIQUIDITY-

Bank FDs can be effectively liquidated, i.e. one can break his/her FD before the
matured date. Nonetheless, a penalty might be required and the penalty sum fluctuates
starting with one bank then onto the next. If there should be an occurrence of expense
saving FDs, a variety of FD, you can pull out before the fulfillment of the 5-year
residency.

RISK AND RETURN

The greatest danger related with the fixed deposits is interest rates risk. The danger of your
cash being secured for longer residency at a low pace of return. To conquer this factor the best thing
is to parted your cash into various sum and contribute it for various tenure also.

5. SENIOR CITIZENS SAVING SCHEMES (SCSS)-

The interest rate on SCSS is payable quarterly and is completely available. Keep in mind, the
interest rate on the plan is liable to audit and modification each quarter.
 Be that as it may, when the investment is made in the plan, then, at that point the interest rate
will continue as before till the development of the plan. Senior resident can claim deduction
of up to Rs 50,000 in a monetary year under section 80TTB on the interest earned from
SCSS.

ADVANTAGES-

 Highest interest rate

 Frequent interest payout
 Tax exemptions
 Premature withdrawal

DISADVANTAGES-

 Interest is taxable
 Premature withdrawal leads to reverse of Tax exemption under section 80C.
 Investor cannot avail loan against SCSS.

LIQUIDITY-
The SCSS is liquid, regardless of the five-year lock-in. One can make withdrawals subject to
conditions and penalties. The aggregate fund invested into the SCSS on or after April 1, 2007, is
qualified for tax deduction under Section 80C of the Income Tax Act.

RISK AND RETURNS-

The risk is associated with this schemes is regarding premature withdrawals and the return
are also fixed in this scheme.
 6. REAL ESTATE-

The investment in real estate is one of the popular way to get high returns.
Its often called one time investment and regular returns. The location of the property also
plays a major role while determining the value of the property.
The investment in real estate delivers returns in 2 ways – capital appreciation and rental
value.

ADVANTAGES-

 Real estate investments react proportionately in case of inflation.

 It can also be used to get finance and can be leveraged.
 These types of investment are always in a improvable state.

DISADVANTAGES-

 It has higher transaction cost

 Requires regular maintenance
 Sometimes creates liability
 Low liquidity

LIQUIDITY-
Real estate investments, then again, is considered an il-liquid investments, which means cash
invested in the asset class is typically restricted for a significant timeframe. The area is additionally
portrayed as illiquid because of its prevalently private nature, the delayed time span and measure of
exertion normally expected to finish exchanges, and the diminished admittance to capital for these
exchanges.
 RISK & RETURNS-
Real estate can be worthwhile, yet it's critical to understand the risk. Key risks incorporate
terrible areas, negative income, high opportunities, and issue inhabitants. Different risk to consider
are the absence of liquidity, covered up underlying issues, and the capricious idea of the housing
market.

7. GOLD-

Having gold as jewllery has its own interests like security and significant expense. Then, at
that point there's the 'making charges', which ordinarily range between 6-14 percent of the
expense of gold (and may go as high as 25% in the event of unique plans). For the individuals
who might need to purchase gold coins, there's as yet a choice.

Numerous banks sell gold coins now-a-days. A substitute method of possessing gold is by
means of paper gold. Interest in paper gold is more savvy and should be possible through
gold ETFs.

ADVANTAGES-

 It can be hedged against inflation

 Hold the value for long terms
 Higher liquidity
 Gold is an easy option for diversification
 It’s the most likeable commodity

DISADVANTAGES-

 The storage of gold is a big issue

  Incase of stock market price rises the investor rushes to invest in gold , but as soon
as market settles the gold price also settles , this leads to loss.
 Its not a passive instrument like stock and bonds

LIQUIDITY-
Gold considered to be very liquid asset. As a investor can easily sale/ purchase the gold
investments or can be used as leverage.

RISK & RETUN-

While risk implied in the stock market is higher than the risk implied in the interest in Gold so
the profits from the stock market additionally ought to be higher from the profits of Gold however
present examination shows that Gold in India is such a resource which conveys better yields then, at
that point securities exchange with lower risk implied.

CONCLUSION-
A portion of the above investments are fixed-income while others are financial market-
connected. Fixed-income and market-connected investments have a task to carry out during the time
spent wealth creation. Market-connected investment offer the capability of exceptional yields yet
additionally convey high risk. Fixed income speculations help in safeguarding the gathered riches in
order to meet the ideal objective. For long term objectives, it is essential to utilize the two worlds.