INTRODUCTION :

Banking Allows Individuals, Governments, And Corporations To Get The Necessary

Financial Support. It Enables You To Borrow Funds At Competitive Interest Rates. It

Allows Borrowers To Manage Their Cash Flow. It Empowers You To Initiate Instant

Money Transfers And Make Payments Remotely.

A Bank Is A Financial Institution That Is Licensed To Accept Checking And Savings

Deposits And Make Loans. Banks Also Provide Related Services Such As Individual

Retirement Accounts (Iras), Certificates Of Deposit (Cds), Currency Exchange, And

Safe Deposit Boxes.

Among The First Banks Were The Bank Of Hindustan, Which Was Established

In 1770 And Liquidated In 1829–32; And The General Bank Of India, Established In

1786 But Failed In 1791. The Largest And The Oldest Bank Which Is Still In Existence

Is The State Bank Of India (SBI).

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 PROJECT 7

FIXED DEPOSIT

A fixed deposit is a one-time investment option that allows you to invest lumpsum
money for a particular duration at the interest rates applicable during the time of
investment.
A fixed deposit is a type of deposit in which a sum of money is locked for a fixed period
of time. However, the tenure for the fixed deposit is decided by the person who invests
his funds. This tenure could be anywhere from a few days to several years.

CAPITAL PROTECTION
Fixed deposits booked with the scheduled banks are covered under the deposit insurance
program of DICGC, a subsidiary of RBI. The insurance cover is applicable on
cumulative bankdeposits, whichinclude fixed deposits, savings account, recurring
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deposits and current account,of up to Rs 5 lakh per bank per depositor, in case of bank
failure.
TAX DEDUCTION UNDER SECTION 80C
Many banks and NBFCs offer 5-year tax-saving FD scheme with lock-in period of 5
years. Theprincipal component of up to Rs 1.5 lakh each financial year can be claimed
as tax deductions u/s80C of the Income Tax Act. However, the interest component is
taxed as per the tax slab of the depositor.
LOAN AGAINST FIXED DEPOSIT (FD)
Depositors can leverage their FDs to avail loans. Loans against FD are usually offered in
the form of overdraft facility, wherein the credit limit is sanctioned on the basis of the
Fixed Depositamount pledged as collateral and the interest is also levied only on the
amount drawn till its repayment.Moreover, the borrower continues to earn interest on the
pledged FDs during the loantenure. Withdrawals can be made anytime up to the credit
limit from their overdraft account and repay it as per their repayment capacity. These
features of loans against FDs make them an excellent tool for mitigating frequent
liquidity and cash flow mismatches, without requiring prematurely closing FDsand
incurring premature withdrawal penalties .

Organization Amount Interest Rate Return After 24

Months
Government Banks 50,000 6.80% 57,031.2
Private Banks 60,000 7.10% 68,822.46
Non Banking Fin 40,000 7.75% 46,440.25
Companies

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 Post Office 50,000 7.00% 57,245
Savings

GOVERNMENT BANK PRIVATE BANK

Bank : State bank of India Bank : HDFC
Type of customer : Normal Type of consumer : Normal
Type of fixed deposit : Cumulative Type of fixed deposit : Cumulative
Amount : 50,000 Amount : 60,000
Date of deposit : 01/10/2023 Date of deposit : 01/10/2023
Date of maturity : 01/10/2025 Date of maturity : 01/10/2025
Tenure : 2 years Tenure : 2 years
Interest Rate : 6.80% Interest Rate : 7.10%
Total Interest : 7031.2 Total Interest : 7,520
Maturity Value : 57,031.2 Maturity Value : 68,822.46
[Total amount I get after 2 years] [Total amount I get after 2 years]

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NBFC SENIOR CITIZEN SAVING
SCHEME

Finance : Shriram Finance Type of customer : Seniorcitizen

Type of customer : Normal Type of fixed deposit : Cumulative

Amount : 50,000
Type of fixed deposit : Cumulative
Date of deposit : 01/10/2023
Amount : 40,000
Date of maturity : 01/10/2025
Date of deposit : 01/10/2023
Tenure : 2 years
Date of maturity : 01/10/2025
Interest Rate : 7.00%
Tenure : 2 years
Total Interest : 7245
Interest Rate : 7.75%
Maturity Value : 57,245
Total Interest : 6440.25
Maturity Value : 46,440.25
[Total amount I get after 2 years]
[Total amount I get after 2 years]

To make the most of a 20,00,000 (INR Two Lakh) Investment while ansidering risks I
would diversify my investment Across different options here’s how I would allocate the
funds and the justifications for each .

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How to calculate the FD maturity amount? The fixed deposit maturity amount
is calculated by the formula MV = (P x r x t)/100, in which MV is the maturity
value; P is the principal amount deposited; r is the rate of interest; and t is the
duration or the tenure of the FD.
ADVANTAGES OF THE FIXED DEPOSITS

A term deposit ensures your money will earn interest at a fixed rate, for a fixed
term. There's little to no chance of losing your money, so it's a good option for
cautious savers. It's low maintenance. Once you lock your cash away in a term
deposit, there's not a lot you can do with it until the term is up.
Pros or Advantages of the Fixed Deposits
1. Easy Availability
The Fixed Deposit scheme is available to all the public and private sector banks in
India. You can open the FD, through internet banking as well. There is no need to go
to the bank for opening FD if you have the KYC or "Know Your Customer"
formalities done at the bank.

2. Guaranteed Returns
FD offer greater interest than the saving accounts. The rate varies between 7 % to 8
%. The interest gains of an FD also vary with its tenure, so that a long-term FD

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accrues better interest gains. The fixed deposit interest rate comparison charts,
available online, will reveal to you which bank is offering the greatest of returns.
3. Tax Exemption
The original monetary amount, which the depositor deposits in the FD, is exempt
from taxation, under the Section 80C of the Income Tax Act. FDs are a widely used
tax saving option by both salaried individuals and workers, and the business persons.
The section offers an exemption of up to Rs 1.5 lakhs, towards an FD deposit.
Note: In order to save taxes, you should deposit the FD for a minimum period of 5
years. The maximum deposit limit, relating to tax exemption is Rs 1.5. lakhs.

4. Provides for Partial Withdrawals

Some banks offer the FD schemes that provide for the partial withdrawals. The
balance that remains in the FD account after withdrawal gets the same interest. These
FDs are hence more lucrative and can be used to withdraw money, in times of need
and crisis.

5. Automatic Renewal
FDs can also be renewed automatically. You do not even need to go to the bank for
its renewal, as it can be managed through the internet banking.

DISADVANTAGES OF THE FIXED DEPOSITS

1. Interest are Taxed Upon
All interest gained on the fixed deposits are fully taxed upon. The income is denoted
under the head “Income From The Other Sources" when you file your ITR to Income
Tax Returns.

There are other financial instruments available, which provide you the benefit of tax-
free savings. The PPF and the government bonds, are a few of them.

2. TDS Taxation

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Interests gained from a FD are also charged with TDS. Banks reduce it from the
interest accrued at the end of each year. However, the depositor has the option to opt
out of TDS, and pay all the interest at the maturity. The form 26 AS, is linked to the
PAN card of the depositor and shows all the TDS deductions made towards the FD.

Below are the TDS taxation rate conditions for FD

Taxation condition Taxation

Rate

When interest from all FDs in a given bank is lower than Rs 10,000 O or nil

When the interest gains increase Rs 10, 000 @10%

When the depositor does not provide the PAN details @20%

When the total income of the depositor, from all sources, is not more O or nil
than 2,50,000 a year

Note that if the FD depositor does not have an income of more than Rs 2.5 lakhs a
year, no TDS will be deducted from the FD interest. In order to make sure that the
bank knows about your low income (in the case of a housewife, and other low-
earning people), submit the form 15 G and the From 15 H at the concerned bank
branch.

3. Lower Interest Rate

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While the FD can offer you a higher interest rate of 10%, the other investment
avenues, including the mutual funds offer returns that can be more than 20% or 30%.
While there are more risks associated with the Mutual Funds (MF), those with a
higher risk appetite can make more profits by investing in an MF.

4. Interest Rate can be Lower than Inflation

Sometimes the inflation rate may be even higher than the interest rate of the FD.

5. No Increase in Interests
FDs have the same interest for their complete tenure. Hence the gains are fixed and
would not increase.

FDs were earlier only good for short tenure savings, but now they have much greater
tenures. While there are tax-free options (for example) PPF available, FDs can also
be used for short-term savings, which can offer greater returns. The secure deposits
provide for the tax exemptions and are especially useful for those who have a low-
risk appetite but want greater interest rates.

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 PROJECT 8
HOUSING LOAN
A home loan is a secured loan that is obtained to purchase a property by offering it as
collateral. Home loans offer high-value funding at economical interest rates and for
long tenures. They are repaid through EMIs. After repayment, the property's title is
transferred back to the borrower.

TYPES OF HOUSING LOANS AVAILABLE IN INDIA

In India, financial institutions offer different types of home loans to suit the specific
needs of customers.

• Home Loans

• Home Construction Loan

• House Renovation Loan

• Home Extension Loan

• Plot Loan

• Balance Transfer Loan

❖ Home Loans

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 This is the most common type of home loan. As the name suggests, these loans
are meant for buying a new apartment, row house, or bungalow, from a developer
or a development authority. You can use this type of loan to purchase under-
construction or ready properties.

❖ Home Construction Loan

You can avail a home construction loan if you already own a plot and require
funds for the construction of the house on that land.

❖ House Renovation Loan

If you already own a house and want to renovate it, you can apply for a house
renovation loan. You can use a house renovation loan for painting, tiling, roof
repairs, etc.

❖ Home Extension Loan

As your family grows, you may need a bigger house to accommodate all the
members comfortably. A home extension loan could be helpful in such a
situation. You can get this type of loan to fund the cost of adding a new
room/floor to your home, extending the kitchen, building a new bathroom, etc.
❖ Plot Loan

If you wish to buy a plot with the intention of constructing your own home in the
future, you can avail a plot loan.
❖ Balance Transfer Loan

Housing Finance Companies (HFCs) offer this unique service that allows you to
transfer your existing home loan from one lender to another. A Balance
Transfer is usually done to get loans at a lower interest rate, flexible repayment
terms and some other benefits.

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DOCUMENTS REQUIRED FOR HOME LOAN

Listed below are the documents required for availing a Home Loan in India.

• Identity proof: Passport, Aadhaar card, driving license, voter ID (any one of
these)
• Proof of Income: Salary slips, bank account statement, IT returns, TDS
certificate (Form 16)
• Address proof: Passport, Aadhaar card, utility bills, driving license, voter ID
(anyone of these)
• Property Documents: All the documents associated with the property
purchased like sale deed, sale agreement, possession letter, allotment letter,
payment receipts, etc.
• Proof of Employment: Documents like an employee ID card, experience
letter, appointment letter can act as proof of employment
• Bank Statements: Bank account statements for the last 6 to 12 months.
• Photographs: Recent passport-sized photographs of the applicant(s)
• Note that submitting a PAN card or Form 60 is mandatory.

HOW TO APPLY FOR HOUSING LOAN

• Firstly, visit the Housing Loan application portal.

• Then, fill in some of the basic details like name, contact number, income details,
loan amount, etc.
• Check and agree to the Terms and conditions and click on "Generate OTP".
• Enter the OTP you have received and complete the application process.

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 • For further processing, our representative will contact you within 24 hours* of
receiving your Housing Loan application.

HOUSING LOAN FOR GOVERNMENT EMPLOYEE ANNUAL

INCOM RS.10 LAKH

HOME LOAN BENEFITS FOR GOVERNMENT EMPLOYEES

The following are some of the perks that you can enjoy as a government employee
when you apply for a housing loan:

• Flexible Repayment and Affordable EMIs

Lending institutions offer special home financing programs for government
employees. Many banks and NBFCs allow you to make loan repayments until the
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age of 75 via EMIs. They generally cap the EMIs at 50% of your net monthly
income.

Both serving and retired government employees can avail such privileges on
immediate payroll and pension, respectively.

• Competitive Interest Rates

If you are eligible for a housing loan, you may get a loan at a lower housing loan
rate interest. However, if you are a government employee, you can get a loan at even
lower rates. Female government employees in particular get up to 0.05% as a
concession on the home loan interest rate.
Such benefits make it even more favourable for government employees to apply for
a home loan.

• Zero Processing Fees

To qualify for a housing loan for government employees, you have to fulfil the laid
out house loan eligibility criteria. Eligible loan applicants will get the loan
sanctioned faster without waiting for days to get approval.

Along with instant loan approvals, some lenders also eliminate the processing fee on
the home loan amount. You can avail a loan at nominal rates and convenient loan
terms without spending a large portion of your savings.

• Advance Corpus

The House Building Advance (HBA) scheme offers home loans for central and state
government employees for the construction of a new home. Previously, government
employees were allowed to take an HBA of ₹7.5 Lakhs.
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However, as per the recent changes in the policy, you can now get a loan of up to
₹25 Lakhs. The previous limit for HBA of ₹1.8 Lakhs offered for home expansion
projects has been increased at least 5-fold to be capped at ₹10 Lakhs.

• Married Couple Benefits

The government altered the existing home loan norms, and married couples who
work for the central government are now eligible for the scheme. The couples can
now avail of a loan with the HBA scheme without any issues.
• Minimal Paperwork
Home loans for government employees require the applicant to submit only a few
documents online. This facilitates faster approval and disbursal process.
Read Less

HOUSING LOAN FOR BUSINESS MAN TURN OVER RS.50 LAKH

You can get a business loan of up to Rs. 50 lakh from Bajaj Finserv by fulfilling the
easy-to-meet eligibility criteria. Once your application is approved, you can get the loan
amount in your bank account within 48 hours*. Who can apply for a business loan
❖ Project Report for Business Loan: Definition and Essential Format

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As a budding entrepreneur or a seasoned business owner looking to expand, you may
find that a bank loan is a valuable financial resource to fund your ventures. However,
before you dive into the loan application process, it's crucial to understand the
significance of a well-crafted project report for a bank loan.

In this comprehensive guide, we will walk you through the ins and outs of creating a
compelling project report for a bank loan, including the format and key components
that will help you secure the funding you need.

❖ Startup Business Loans

You can avail a Startup business loan from a bank or a financial body in order to raise
funds to start a business of your own or expand your current business. The rate of
interest charged by the bank will depend on the loan amount availed by you and the
repayment tenure.

❖ Business Loan Details

Interest Rate Up to 21% p.a.

Loan Amount Up to Rs.75 lakh

Loan Tenure Up to 5 years

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Processing Fee Up to 6.5% of the loan amount + GST

❖ Business Loans for Startups by the Indian Government

There are more than 39,000 startups in India at present who have access to many
private equity and debt funding options. However, it is a challenge to get funding when
the business is just an idea or is in the early stage. Also, the Micro, Small, and Medium
Enterprises (MSME) sector in India only has limited access to formal credit which is
why the Government of India decided to roll out startup business loan schemes for
MSMEs and startups.

❖ Bank Credit Facilitation Scheme

Headed by the National Small Industries Corporation (NSIC), this scheme is targeted at
meeting the credit needs of the MSME units. The NSIC has partnered with various
banks to provide loans to the MSME units. The repayment tenure of the scheme ranges
between 5 years and 7 years but in special cases, it can be extended up to 11 years.

❖ Pradhan Mantri Mudra Yojana (PMMY)

Launched in 2015, this scheme is headed by the Micro Units Development and
Refinance Agency (MUDRA) and it aims at offering loans to all kinds of
manufacturing, trading, and service sector activities. The scheme offers loan under
three categories - Shishu, Kishor, and Tarun in amounts ranging between Rs.50,000 and
Rs.10 lakh. The Mudra loan can be availed by artisans, shopkeepers, vegetable vendors,
machine operators, repair shops, etc.

❖ Credit Guarantee Scheme (CGS)

This loan can be availed by both new and existing MSMEs that are involved in service
or manufacturing activities but excludes educational institutions, agriculture, retail
trade, Self Help Groups (SHGs), etc. Up to Rs.2 crore can be borrowed under this
scheme headed by the Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE).

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 ❖ Standup India
Launched in April 2016 and headed by SIDBI, this scheme extends loans to enterprises
in manufacturing, trading, or services. Under this scheme, loans ranging between Rs.10
lakh and Rs.1 crore can be availed. The repayment of loans taken under this scheme can
be done in seven years while the maximum moratorium period allowed is 18 months.

❖ Sustainable Finance Scheme

This scheme is also headed by the SIDBI and aims at offering loans to industries that
deal in green energy, renewable energy, technology hardware, and non-renewable
energy. The government started this scheme with an intent to offer support to the entire
value chain of cleaner production/energy efficiency and sustainable development
projects.

With this EMI calculator, you can get the estimated amount that you need to repay.
This way, you can understand whether you can afford the monthly repayments and
make your financial decisions accordingly.

REPAYMENT OPTIONS
TRANCHE BASED EMI

• If you purchase a property under construction, the EMIs start only after the full
disbursement of the home loan. Until then, you have the option to pay interest
only on the amount drawn and start paying the EMIs once the entire loan amount
is disbursed.

ACCELERATED REPAYMENT

• This option facilitates increase in the EMI payment as your income increases,
resulting in the faster repayment of the loan.

TELESCOPIC REPAYMENT

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• This option allows you to extend the tenure up to 30 years, enhancing the loan
amount you are eligible for or reducing the amount of EMIs.

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