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PROJECT REPORT
ON
3600 FINANCI
AL
(LIFE INSURANCE)
Session 2009-2011
Submitted to Submitted By
(Branch Head)
(Area Manager)
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ACKNOWLEGDEMENT
research project. During the whole research work he guided and provided me
the valuable inputs, which helped me in the completion of the project. Despite
his busy schedule he granted me a generous amount of his time with great
interest.
A special thank to Sir who constantly monitored my work and preceded support
I am thankful to all those respondents who spared their valuable time attending
SWATI GUPTA
C.I.M.T. (U.P.T.U.)
2009-2011
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DECLARATION
I hereby declare that the following documented project report titled "360
I here by declare that the study has not been submitted to any other
SWATI GUPTA
2009-2011
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PREFACE
Investment is the sacrifice of certain present value for the uncertain future
making has not only to be continuous but rational too. Broadly speaking, an
investment decision is a trade off between risk and return. All investment
choices are made at points of time in accordance with the personal investment
Since investments in securities are revocable, investment ends are transient and
become more and more vague as one conceives of the distant future.
Investors in securities will, therefore, from time to time, reappraise and re-
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CONTENTS
1. INTRODUCTION
2. COMPANY PROFILE
4. OBJECTIVE OF STUDY
5. RESEARCH METHODOLOGY
8. SWOT
9. SUGGESTION/RECOMMENDATION
10. CONCLUSION
11. APPENDIX
12. BIBLIOGRAPGHY
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COMPANY PROFILE
have a wide range of products and services for Corporates, High Net worth
ignite hope and kindle in us the passion to stretch our limits. We also believe
that nothing can or should stop us from realising our dreams… and financial
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For over four decades, we have been helping people realise their aspirations by
helping them make their wealth grow, and plan their financial lives.
advisory companies in India, with a strong presence all over the country. We
take pride in serving our customers – both individual and institutional – and are
investment products of almost all major companies, both public and private. In
the formalities, and help you keep regular track of your investments.
These services and products are delivered through our network of 134 Bajaj
resources for over 1,000 top institutions and corporate houses every year, and
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Networth Clients.
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Accessibility
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Milestones
Bajaj Capital has contributed to the growth of the Indian Capital Market at
every step.
In 1965, we were the first to innovate the Companies Fixed Deposit. Today, we
are playing an active role in the growth of the Indian Mutual Fund industry.
We are also working closely with private insurance companies to deepen India's
insurance market.
1964
Bajaj Capital sets up its first Investment Centre™ in New Delhi to guide
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India's first Mutual Fund, Unit Trust of India (UTI) is incorporated in the same
year.
1965
EIL Ltd. (Oberoi Hotels, then known as Associated Hotels of India Ltd.)
becomes the first company to raise resources through Company Fixed Deposits.
1966
Bajaj Capital expands its product range to include all UTI schemes and
1969
Bajaj Capital manages its first Equity issue (through an associate company) of
Grauer & Wells India Ltd.; right from drafting the prospectus to marketing the
issue.
1975
1981
IOC, BHEL, BPCL, HPCL and others; thus opening the floodgates for growth
Bajaj Capital plays an active role in all the schemes as 'Principal Brokers'
1986
MTNL, NHPC, IRFC offer a series of Bond Issues. Bajaj Capital is among the
1987
SBI leads the launch of Public Sector Mutual Funds in India. Bajaj Capital
1991
SBI issues India Development Bonds for NRIs. Bajaj Capital becomes the top
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1993
The first private sector Mutual Fund – Kothari Pioneer – is launched, followed
by Birla and Alliance in the following years. Bajaj Capital plays an active role
and is ranked among the top mobilisers for all these schemes.
1995
IDBI and ICICI begin issuing their series of Bonds for retail investors. Bajaj
Capital is the co-manager in all these offerings and consistently ranks among
1997
Private sector players lead the revival of Mutual Funds in India through Open-
ended Debt schemes. Bajaj Capital consolidates its position as India's largest
1999
Bajaj Capital begins marketing Life and General Insurance products of LIC and
Sector. Bajaj Capital achieves the milestone of becoming the top 'Pension
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schemes.
2000
Supermarket.' The Company offers all kinds of financial products, including the
reinvents 'Financial Planning' in its international sense and upgrades its entire
2002
and need-based investing. To achieve this goal, the company introduced the
qualification.
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2004
Bajaj Capital obtains the All India Insurance Broking Licence. Simultaneously,
a series of wealth creation seminars are launched all over the country, making
2005
2007
2008
Bajaj Capital launches Just Trade, an online Platform for investing in Equities,
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The focus of our organisation is to be the most useful, reliable and efficient
trustworthy advisor to our clients, helping them achieve their financial goals.
Aims
To always give honest and unbiased financial advice and earn our clients'
everlasting trust.
seamless organisation.
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MBAs, MBEs, CFPs, CSs, Insurance experts, Legal experts and others
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Chairman
A visionary par excellence, a pioneer and a leader, Mr K.K. Bajaj has been
and Company FDs. His emphasis on honesty, ethics and values are the guiding
Mr Bajaj is also a prolific writer and has written over 200 articles on diverse
A qualified Financial Planner, Mr Rajiv Deep Bajaj was the first to introduce
Deep Bajaj has played a pivotal role in expanding Bajaj Capital's reach across
The Media and Industry honchos have regularly acclaimed Mr. Rajiv Deep
Bajaj for his strengths as a powerful orator and writer. His views on various
in some of the leading media entities like The Economic Times, Business
Today, Star TV, CNBC and Aaj Tak. His personal life goal is to spread
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Mr. Sanjiv Bajaj started his career in 1995 as managerial trainee, worked on
and by using various tools of financial planning to offer them a solution to meet
Finance, and holds an International Certificate for Financial Advisors from the
the largest individual agent for LIC. Mr Sanjiv Bajaj has a keen interest in IT,
and has played a major role in implementing the ERP software and E-
CEO & Director Mr. Anil Chopra is the Chief Executive Officer & Director
of Bajaj Capital Limited, He joined the Company in 1984. Mr. Chopra has been
instrumental in expanding the branch network of Bajaj Capital Ltd. all over
India.
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a financially literate society and making Bajaj Capital a strong retail brand. He
is considered an authority, and is widely sought after by the media for quotes on
Our logo depicts Lord Ganesha who is the source of all our values and ethics in
business.
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prosperity. We emulate His example and try our best to help our clients
Our logo has a yellow background. Yellow is the colour of gold, which
associated with Brihaspati, the guru and counsellor of the Gods. We offer
The letters are in red. Red is the colour rajas – symbolising power and
and happiness.
The white streak represents the trunk of Lord Ganesha. White is the
colour of satva guna, and implies our selfless commitment to your life-
long happiness.
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The only thing permanent in life is change. Times change. People change. So
does life. You expect life to be much better tomorrow than it is today.
Tomorrow, you hope to fulfil all your dreams and aspirations. But what
it's time for you to change the way you plan your investments...
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over the world. Now, with a little help from Bajaj Capital, you too can give
yourself the 360° Financial Planning edge! Get your Financial Plan
prepared now Why do you need Bajaj Capital's 360° Financial Planning?
You may have many dreams, needs and desires. For example, you could be
dreaming of:
•Owning a new car Buying a dream house Providing your children with
But in today's world of skyrocketing costs and increasing inflation, how many
of these dreams can you hope to turn into reality? By planning well, you can
360° Financial Planning helps you see the big picture and invest for specific
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Everyone does! Because everyone has a right to dream. And realising dreams is
•Reliable Realistic
•Proven
360° Financial Planning is based on the premise that every individual has
certain basic financial needs that are expressed at various stages of life (getting
married, buying assets like homes, vehicles, or providing for your children's
education and wedding). With the help of 360°Financial Planning, you can
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•Cash Flow Planning: To provide for assets and meet the periodic cash
requirements
future
worried Top
•The process begins with identifying your needs with the help of the Need
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Investment Planning
saved enough to take care of emergencies, you should start thinking about
investing and to make your money grow. We can help you plan your
investments so that you can reap adequate benefits and achieve your financial
goals.
Risk Profiling
Plans (SIP)
important because it helps you to derive the maximum benefit from your
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investments.
Your success as an investor depends upon your ability to choose the right
and goals. For most investors, however, the three prime criteria of
Investment Planning also helps you to decide upon the right investment
would also depend upon your age, personal circumstances and your risk
planning.
Investment Planning also helps you to strike a balance between risk and
risk and returns, that suits your particular needs and requirements.
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In simple terms, cash flow refers to the inflow and outflow of money. It is a
record of your income and expenses. Though this sounds simple, very few
people actually take the time out to find out what comes in and what goes out of
Cash flow planning refers to the process of identifying the major expenditures
that the required amount is accumulated within the required time frame.
Cash flow planning is the first thing that should be done prior to starting an
investment exercise, because only then will you be in a position to know how
your finances look like, and what is it that you can invest without causing a
So does it involve looking at future cash flows only? Not really. You should
always do a cash flow for yourself as on date, and you will realize that you
could have a potential savings amount within each month of your working life.
This is the amount that you should look at saving for meeting your financial
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Cash flow plans are commonly used by business houses. Without a viable cash
flow plan, a company could easily spend more than its revenue, putting it in
important for people like us as well. The principles that apply to corporate
There has never been a bigger need than today for families and individuals to
work out cash flow plans. Without proper cash flow planning one could easily
get caught in the debt trap. Of course, it goes without saying that creating a plan
is not enough. One also needs to implement the plan, besides bringing about a
Cash flow plan brings you face-to-face with what you should ideally be saving,
and investing in a systematic and regular manner, and what would it mean to
you to withdraw from your portfolio after a couple of years. It brings down in
numbers what your financial future has in store for you, and gives a crystal
clear view (as much as is possible with inflation and the interest rate scenario).
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carried out religiously. Basically, there are three steps in tax planning
Calculate your taxable income under all heads ie, Income from Salary, House
Property, Business & Profession, Capital Gains and Income from Other
Sources.
Calculate tax payable on gross taxable income for whole financial year
(i.e.,From 1st April to 31st March) using a simple tax rate table, given on next
page.
After you have calculated the amount of your tax liability. You have two
Most people rightly choose Option 'B'. Here you have to compare the
advantages of several tax saving schemes and depending upon your age, social
liabilities, tax slabs and personal preferences, decide upon a right mix of
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investments, which shall reduce your tax liability to zero or the minimum
possible.
Every citizen has a fundamental right to avail all the tax incentives provided by
the Government. Therefore, through prudent tax planning not only income-tax
liability is reduced but also a better future is ensured due to compulsory savings
in highly safe Government schemes. We sincerely advise all our readers and
clients to plan their investments in such a way, that the post-tax yield is the
highest possible keeping in view the basic parameters of safety and liquidity
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"Insurance is not for the person who passes away, it for those who
Planning.
the risks to his life, so that his family's quality of life does not undergo any
the risks to his life, so that his family's quality of life does not undergo any
insurable risks. Calculating the right level of risk cover is a specialised activity,
requiring considerable expertise. Proper Insurance Planning can help you look
at the possibility of getting a wider coverage for the same amount of premium
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or the same level of coverage for the same amount amount of premium or the
same level of coverage for a reduced premium. Hence, the need for proper
insurance planning.
Insurance, simply put, is the cover for the risks that we run during our lives.
Insurance enables us to live our lives to the fullest, without worrying about the
financial impact of events that could hamper it. In other words, insurance
So what are the risks that we run? To name a few - the risk on our lives that is,
the household), the risks of medical contingencies (since they have the
capability of depleting our wealth considerably) and risks to assets (since the
imagine a situation where our goals are disturbed by acts beyond our control,
Insurance Planning takes into account the risks that surround you and then
provides an adequate coverage against those risks. There is no risk not worth
insuring yourself against, and insurance should first and foremost be looked as a
measure to guard against risks - the risk of your dreams going awry due to
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Like every parent, you too must be overjoyed to watch your child grow. All parents want
to give the best possible upbringing to their children. This includes good education and
security, in case of any eventuality. Soon, your little bundle of joy will grow up, and it
will be time to provide for his or her higher education and wedding.
expenditures such as those on higher education and wedding, and to provide for an
Children's Future Planning acquires added importance because children's education and
wedding are high priority life goals, which can neither be postponed nor can there be a
Good education has always been the passport to a secure future. Today, career
opportunities have grown manifold, and there are many professional course that your
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child can aspire for. However, costs of higher education have also increased
exponentially.
Like most parents, you might be saving regularly to ensure a safe tomorrow for your
child. However, savings alone is no longer enough. For ensuring adequate funding of
It is never too early to start saving and investing for your child's future. Especially
when he/she goes to college, you may require a sum of Rs 6.3 lakhs, assuming an
There are many products which your Financial Planner can use to achieve the above
objectives. For example, he could suggest a Children's Future Plan offered by any good
insurance company, to build a corpus for your child's higher education, and provide for a
Children's plans are also available under unit-linked option. Being unit-linked, they offer
access to investments in all kinds of asset classes - equity, debt and cash.
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Retirement Planning
Some like it. Some don’t. But retirement is a reality for every working person.
living even when you are no longer earning. This is extremely important,
because, unlike developed nations, India does not have a social security net.
Retirement Planning acquires added importance because of the fact that though
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done after taking inflation and time value of money into account.
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In simple words, retirement planning means making sure you will have enough
money to live on after retiring from work. Retirement should be the best period
of your life, when you can literally sit back and relax or enjoy your life by
reaping benefits of what you earn in so many years of hard work. But it is easier
said than done. To achieve a hassle-free retired life, you need to make prudent
investment decisions during your working life, thus putting your hard-earned
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Why is it important?
India, unlike other countries, does not have state-sponsored social security for
the retired people. And after several decades when pensions provided many
people with a large chunk of money they needed to live comfortably after they
retired, things are changing. While you may be entitled to a pension, or income
during retirement, in the new economic era, you are increasingly likely to be
Although the compulsory savings in provident fund through both employee and
There are many reasons for the working individuals to secure their future
early retirement and rising health risks are among few important risks. Besides
falling interest rates and the sustained increase in the cost of living make it a
compelling case for individuals to plan their finances to fund their retired life.
Life takes its own course and from the poorest to the wealthiest, no one gets
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spared. "Everyone grows older". We get older every day, without realising.
The future depends to a great extent on the choices you make today. Right
decisions with the help of proper planning, taken at the right time will assure
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In simple words, retirement planning means making sure you will have enough
money to live on after retiring from work. Retirement should be the best period
of your life, when you can literally sit back and relax or enjoy your life by
reaping benefits of what you earn in so many years of hard work. But it is easier
said than done. To achieve a hassle-free retired life, you need to make prudent
investment decisions during your working life, thus putting your hard-earned
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Why is it important?
India, unlike other countries, does not have state-sponsored social security for
the retired people. And after several decades when pensions provided many
people with a large chunk of money they needed to live comfortably after they
retired, things are changing. While you may be entitled to a pension, or income
during retirement, in the new economic era, you are increasingly likely to be
Although the compulsory savings in provident fund through both employee and
There are many reasons for the working individuals to secure their future
early retirement and rising health risks are among few important risks. Besides
falling interest rates and the sustained increase in the cost of living make it a
compelling case for individuals to plan their finances to fund their retired life.
Life takes its own course and from the poorest to the wealthiest, no one gets
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spared. "Everyone grows older". We get older every day, without realising.
The future depends to a great extent on the choices you make today. Right
decisions with the help of proper planning, taken at the right time will assure
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INVESTMENTS
Mutual Funds are among the hottest favourites with all types of investors. Investing in
mutual funds ranks among one of the preferred ways of creating wealth over the long
term. In fact, mutual funds represent the hands-off approach to entering the equity
market. There are a wide variety of mutual funds that are viable investment avenues to
meet a wide variety of financial goals. This section explains the various aspects of
Mutual Funds.
Investments?
• Points to Remember
• Glossary
A Mutual Fund is a trust that pools together the savings of a number of investors who
share a common financial goal. The fund manager invests this pool of money in securities
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•Professional expertise: Fund managers are professionals who track the market on
knowledge, they are better placed than the average investor to understand the
markets
market, Mutual Funds cost less. This is due to savings in brokerage costs, demat
proportion allocated to different assets and the fund manager’s investment strategy.
Withdrawal Plans and Dividend Investment Plans, you can systematically invest or
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•SEBI regulated market: All Mutual Funds are registered with SEBI and function
within the provisions and regulations that protect the interests of investors. AMFI
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Types of Funds
There are a wide variety of Mutual Fund schemes that cater to your needs, whatever your
age, financial position, risk tolerance and return expectation. Whether as the foundation
of your investment program or as a supplement, Mutual Fund schemes can help you meet
your financial goals. The different types of Mutual Funds are as follows:
A mutual fund scheme that achieves the benefits of diversification by investing in the
stocks of companies across a large number of sectors. As a result, it minimizes the risk of
A mutual fund scheme which focuses on investments in the equity of companies across a
Index Funds
These funds invest in the stocks of companies, which comprise major indices such as the
BSE Sensex or the S&P CNX Nifty in the same weightage as the respective indice.
Mutual Fund schemes investing predominantly in equity, and offering tax deduction to
investors under section 80 C of the Income Tax Act. Currently rebate u/s 80C can be
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A mutual fund scheme which aims at providing regular income (not necessarily monthly,
don't get misled by the name) to the unitholder, usually by way of dividend, with
Income schemes
Debt oriented schemes investing in fixed income securities such as bonds, corporate
A fund comprising of bonds for which the interest rate is adjusted periodically according
Balanced Funds
The aim of balanced funds is to provide both growth and regular income as such schemes
invest both in equities and fixed income securities in the proportion indicated in their
offer documents. They generally invest 40-60% in equity and debt instruments.
Fund of Funds
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A Fund of Funds (FoF) is a mutual fund scheme that invests in other mutual fund
schemes. Just as fund invests in stocks or bonds on your behalf, a FoF invests in other
Mutual
Investment Who should Investment
Fund Objective Risk
Portfolio invest horizon
Type
Those who
Treasury Bills,
Liquidity + park their
Certificate of
Moderate funds in
Money Deposits,
Income + Negligible current 2 days - 3 weeks
Market Commercial
Reservation of accounts or
Papers, Call
Capital short-term
Money
bank deposits
Call Money,
Short-
Commercial
term
Papers, Those with
Funds
Liquidity +
Little Interest Treasury Bills, surplus 3 weeks -
(Floating -
Moderate
Rate CDs, Short- short-term 3 months
short-
Income
term funds
term)
Government
securities.
Bond Regular Income Credit Risk & Predominantly Salaried & More than 9 - 12
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Government
(Floating -
securities,
Risk investors
Long-
Corporate
term)
Bonds
Salaried &
Security & Interest Rate Government
Gilt Funds conservative 12 months & more
Income Risk securities
investors
Aggressive
Long-term
Equity investors with
Capital High Risk Stocks 3 years plus
Funds long term out
Appreciation
look.
To generate
indices
Balanced ratio
risk
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Once you are comfortable with the basics, the next step is to understand your investment
choices, and draw up your investment plan relevant to your requirements. Choosing your
investment mix depends on factors such as your risk appetite, time horizon of your
Mutual Fund investment decisions require consistent effort on the part of the investor.
Before investing in Mutual Funds, the following steps must be given due weightage to
Your financial goals will vary, based on your age, lifestyle, financial independence,
family commitments, level of income and expenses, among many other factors.
Therefore, the first step is to assess you needs. Begin by asking yourself these simple
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questions:
The risk-taking capacity of individuals vary depending on various factors. Based on their
•Very conservative
•Conservative
•Moderate
•Aggressive
•Very Aggressive
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•A lumpsum after a fixed period of time for some specific need in the future
•Or, you may have no need for cash, but you may want to create fixed assets for
the future
The next step is to select a scheme category that matches your investment objectives:
•For Capital Appreciation go for equity sectoral funds, equity diversified funds or
balanced funds.
•For Regular Income and Stability you should opt for income funds/MIPs
•For Short-Term Parking of Funds go for liquid funds, floating rate funds, short-
term funds.
Investment Investment
Ideal Instruments
Objective horizon
Short-term
1- 6 months Liquid/Short-term plans
Investment
Capital Diversified Equity/ Balanced
Over 3 years
Appreciation Funds
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Once you have a clear strategy in mind, you now have to choose which Mutual fund and
scheme you want to invest in. The offer document of the scheme tells you its objectives
and provides supplementary details like the track record of other schemes managed by
the same Fund Manager. Some important factors to evaluate before choosing a particular
The track record of performance over that last few years in relation to the appropriate
How well the Mutual Fund is organized to provide efficient, prompt and personalized
service.
communications.
D) Evaluation of portfolio
Evaluation of equity fund involve analysis of risk and return, volatility, expense ratio,
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Good equity fund should provide consistent returns over a period of time. Also expense
ratio should be within the prescribed limits. These days fund house charge around 2.50%
as management fees.
Evaluation of bond funds involve it's assets allocation analysis, return's consistency, it’s
rating profile, maturity profile, and it’s performance over a period of time. The bond fund
with ideal mix of corporate debt and gilt fund should be selected.
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Let's assume that Mr. Gupta has purchased Mutual Fund units worth Rs. 10,000 at an
NAV of Rs. 10 per unit on February 1. The Entry Load on the Mutual Fund was 2%. On
September 15, he sold all the units at an NAV of Rs 20. The exit load was 0.5%.
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Points to Remember
•Do not chase returns: Because what goes up must come down.
•Do not put all eggs in one basket: Diversification reduces the risk.
must.
•Do not time the market: Every time is good for investments.
•Mutual Funds are subject to market risks and there is no assurance that the fund
Assets Management Company: A highly regulated organization that pools money from
many people into portfolio structured to achieve certain objectives. Typically an AMC
manages several funds –open ended/ close ended across several categories- growth,
income, balanced.
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Close Ended Fund: They neither issue nor redeem fresh units to investors. Some closed
ended funds can be bought or sold over the stock exchange if the fund is listed. Else,
investor have to wait till redemption date to exit. Most listed close ended funds trade at
Open Ended Fund: A diversified and professionally managed scheme, it issues fresh
units to incoming investors at NAV plus any applicable sales charge, and it redeems
Entry/ Exit Load: A charge paid when an investor buys/sells a fund. There could be a
Expense Ratio : The annual expenses of the funds, including the management fee,
Growth/Equity Fund: A fund holding stocks with good or improving profit prospects.
Liquidity: The ease with which an investment can be bought or sold. A person should be
able to buy or sell a liquid asset quickly with virtually no adverse price impact.
Net Assets Value : A price or value of one unit of a fund. It is calculated by summing the
current market values of all securities held by the fund, adding the cash and any accrued
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income, then subtracting liabilities and dividing the result by the number of units
outstanding.
Interest Rate Risk: The risk borne by fixed-interest securities, and by borrowers with
floating rate loans, when interest rates fluctuate. When interest rates rise, the market
Credit Risk: Credit risk involves the loss arising due to a customer’s or counterparty’s
Capital Market Risk : Capital Market Risk is the risk arising due to changes in the
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INTRODUCTION
Investment options
1. Insurance
5. Mutual fund
7. Securities
8. Real Estate
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RESEARCH OBJECTIVE
• To identify the whether they are aware about the Tax structure.
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DEFINITIONS OF INVESTMENT
• The use of money for the purpose of making more money, to gain income
insurance to save on taxes. We put money into recurring deposits to, say, part-
finance the down payment for a house. We invest for our children’s education,
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for their imminent weddings. We also invest to take care of our own needs after
retirement.
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Motives for investment may vary, but there are some common desires. people
• Safety
• Liquidity
• Returns
For instance, if people want to put away money for retirement, safety will be
the most important criterion. A safe investment avenue that gives people a
decent annual return will be good enough for people. What about the money
their father sent people for the down payment on their car? People haven’t even
decided on the model! People’ll probably keep the money in their savings bank
At different stages of life their needs for financial security and plans for the
Protection
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losing their primary wage earner's income if and when premature and
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1. Emergency Fund
fund to provide money for survivors. It buys the time so essential and necessary
1. Education
Yet another priority need for peopling families is building adequate funds for
higher education costs. The need for highly specialized education is greater than
ever before.
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2. Retirement
Peopling families should also plan for retirement in the long run. Investment
and pension plans are not adequate to fund the retirement needs at times. Once a
other retirement programmes. The old rule of saving 10 percent of the annual
income still holds true for single income peopling families. Peopling families
3. Disability
provider is unable to work, the economic consequences could be severe for the
family. Not only does the family have to maintain the established standard of
living, it also has to shoulder the additional burden of a disabled member within
itself. Disability is the major need that is to be addressed and protection against
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Tax Planning
time to plan for some investments and funds in the names of minor children and
to take some insurance policy in the name of minor children for their education
and marriage purposes. This should be a long-term policy with a small amount
The needs of mature adults tend to emphasis on their successors as well as their
members or relatives.
• Ensuring health care and attention for their aged and dependent parents.
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The cost of marriage and higher education for children forms a major expense
during the mature adult's life cycle. The costs of living increase year after year.
And to meet these rising costs requires sacrifice and considerable effort on the
The cost of higher education is also rising. More and more students are opting
are also offering a wide range of specialized courses on Indian This makes a
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Since costs of housing have to be met with a large percentage from our
incomes, newly married couples are finding it harder than ever before to pay the
minimum down payment or even acquire the necessary resources to qualify for
housing finance. Needless to say, these peopling couples need their parents'
When a peopling couple applies for a loan, they should purchase dual-life
couple expires before the housing loan is paid off, the proceeds of the policy
In case the couple lives happily ever after, the cash value in the policies can be
used to pay off the remainders of the loan after a while. The tax advantages
offered are extremely advantageous for the peopling couple and their parents.
Many other financial options are available, but the flexibility offered by life
Adults in their mature years are usually confronted with financial demands from
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Not many people anticipate that as their children mature and gain
Since these people are responsible for their children as well as their elderly
parents, they subsequently get 'sandwiched' between the expenses of both the
generations’.
a lot of emotional and financial strain. Difficulties arise from balancing the
advance for the risks covered. People who anticipate and prepare for the worst
Long term care insurance is yet another major planning consideration. Medical
assurance policies are not always adequate. They can never meet the
can afford the large expenses of nursing homes with their current income.
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If matured adult parents are unable to afford this coverage, it makes sense for
be exercised against any potentially high costs that might occur later. When the
time period for future health planning is over, the options available for the
If a parent's health goes from bad to worse and they become completely
dependent on external help, the medical costs may be higher than the income
Just like elderly parents, children who are physically or mentally handicapped
require special consideration and are a source of major and expensive concern.
A provision for their needs must be considered and plans made as early as
possible. Needless to say, the dependency period never ends with these
dependents.
Providing necessary care for dependents having special needs can be extremely
strenuous, both emotionally and financially. At times, people who are caring for
the disabled sacrifice their own health and financial security at the expense of
the other members of the family. The emotional pull generated can create a
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Parents of a dependent with special needs wish to see that these expenses are
taken care of on a long-term and guaranteed basis. With timely and proper
planning, such expenses can be met easily regardless of what happens to the
provider of support.
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Tax Planning
Once their children are grown up and settled in life, most of their responsibility
towards them is over. It is now time to relax. Now people should plan their
investment strategies in such a manner that the income in their family group is
distributed from the point of view of tax planning, not merely in their name and
that of their spouse but in the names of their son, their daughter-in-law and their
grand children. People should also now start focusing on the investment
Thus, it is recommended to people that they should prepare their Will and adopt
tax planning relating to the wills and achieve ultimate tax saving for family
Middle years are the stage in the life cycle identified and characterized as a
and incurring additional debts as well. This phase in the human life cycle
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develops the individual's long-term and ongoing relationships more than the
others.
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Challenging Concerns
during this stage of their life cycle. They may be trying to achieve their aims
in life, their aspirations and dreams ranging from a proper balance between
their careers and family life to a continual movement up the career ladder.
They will also seek proper protection of their income levels in event of a
with realistic provisions made for their retirement needs and financial
savings and investment plans. They might also be updating their wills and
bequests.
crises and challenges, they are highly prone to make financial mistakes and
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The most common mistake made by individuals during their middle age
programs for future needs. The benefits of compounded interest are lost
forever owing to this single greatest failure. Another mistake people tend to
The other common errors on people's part are concurrent to the fact that
people tend to overuse and at times, even abuse their credit limits. They
people forget that inflation will catch up with them and make inadequate
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An individual seeking to fulfill their aspirations should base his game plan
• Emergency fund.
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Tax Planning
Their tax planning should now be such that people have no hassles and tensions
in these golden years. Their aim should be to have an easy flow of money from
higher returns. Their focus should be only on 100% safe and secured
investments. Try to have a joint bank account and joint investments which will
help smooth succession in the years to follow. Their tax planning should now
be in such a manner that people are required to spend less time managing their
affairs and have more time available for their personal pursuits.
INTRODUCTION TO INSURANCE
provide or safeguard against loss provision, against sickness, death etc in return
fearlessness to the human being. It is a mean for shifting the risks to insurer in
over a member of persons who are exposed to it and who agree to insure
themselves against the risks. There are risk of outbreak, fire, cyclone,
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earthquake, floods, accidents and deaths etc. According to A.H. WHILET; risk
Insurance is a cooperative method for spreading over the loss suffered by one or
more, caused by a particular risk, over a no. of persons who agree to share the
loss. By insurance a person can protect himself and his dependents from loss
arising from future uncertain events like fir, accidents, early death and so on.
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DEFINITION OF INSURANCE
given contingency”
(JUSTICE TINDALL)
premium assumes particular risk of the other party and promises to pay to him
contingency.”
(E.W. FITTERSON)
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CLASSIFICATION OF INSURANCE
Insurance business can be divided into two broad categories – Life insurance &
general insurance
Types of Insurance
Miscellaneo
Marine Fire
us
1) GENERAL INSURANCE
other forms of insurance. Fire and marine insurance are strictly called
property insurance. Motor, fidelity and machine insurance include the extent
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injury or death.
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2) LIFE INSURANCE
It is different from other forms of insurance in the sense that the subject
paid by the assured. At present, life insurance enjoys maximum scope because
the life is the most important property of the society or an individual. Life
adequate amount to the old age when earning capacities are reduced. Under
personal insurance a payment is made at the accident. The insurance is not only
specific benefit to the assured, suffering injury in any accident resulting ion
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money either on the death of the insured or on the expiry of a fixed period.
certainty for uncertainty. It is the certainty of death inherent in the life which
gives rise to the necessity for some form of protection against the loss arising
from death. The breadwinner of the family more often than not depens a family
for its food, clothing and shelter on the income benefit in at regular intervals. So
long as he lives and the income is received steadily that family is secured but
should death suddenly intervene the family may be left in very straitened
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Over 5000 year ago in china insurance was seen as a preventative measure
against piracy on the sea. Piracy in fact so prevalent that as a way of spreading
the risk a number of ship would carry a portion of another ship’s cargo so that if
In another part of the world nearly 4,500 year ago in the ancient land of
Babylonia trader use to bear risk of the caravans trade by giving loan that have
to be later repaid with interest when the good arrive safely. In 2100BC the code
These provide the underpinning for marine insurance contracts. Such contracts
contain three elements. A loan on the vessel, cargo, or freight, an interest rate
and a surcharge to cover the possibility of loss. In effect ship owners were
Life insurance come out a little later in ancient Rome were burial clubs were
form to cover the funeral expenses of its members, as well as help survivors
monetarily. With Rome’s formed around 450 A.D, most of the concept of
insurance were abandoned, but aspect of it did continue through the middle age,
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insurance covering risk like fire , flood , disability , death theft and even
imprisonment.
During the feudal period early forms of insurance ebbed with the decline of
travel and long distance trade. But during the 14th and 16th centuries,
Insurance in India can be traced back to the Vedas. For instance, yogakshema,
derived from a Rig Veda. The term suggests the form of “community
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The purpose of life insurance is to safe guard the interest of people from
insurance principle has become all the more useful in modern affairs. The rule
premium can not be withdrawn. Life insurance is the best media of saving.
The elements of investment i.e. regular savings capital formation and return
of the capital are observed in the life insurance, In India the insurance
policies; carry a special exemption from income tax and estate duty.
PERSON
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savings plans, it affords full protection against risk of death. In case of death,
the full sum assured is made available under a life assurance policy, whereas
under other savings schemes the total accumulated saving alone will be
available.
• TAX BENEFIT
The Indian income Tax Act allows deduction of certain portion of taxable
tax benefits into account the assured is in effect paying lower premiums for
his insurance.
• INVESTMENT ELEMENT
In life insurance, the insured is required to pay the premiums the premiums
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• Insurance act.
• LIC Act.
• IRDA Act.
Insurance act 1938 was the first comprehensive legislation in India to regulate
the business of insurance when it was found that the earlier Indian company act
failed to meet the purpose. It was way back in 1912,when the Indian life
insurance companies act and provident fund insurance societies act 1912 was
passed , which was further modified and a new legislation was passed in 1928.
in 1938 the insurance act was passed, which aimed to consolidate and amend
the law relating to the business of insurance. The act came into force with effect
from july, 1939. in 1950, certain changes were effected in order to limit the
business, the insurance act was through the IRDA Act 1999.
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The Life Insurance Corporation Act, 1912 was the first legislation for
regulating insurance business in India. However the Insurance Act, 1912 was
amended in 1950.
Finally the Government of India nationalized the entire life insurance business
in the year 1956 by passing Life Insurance Corporation Act, 1956 and as such
LIC was setup on 1st September, 1956. The LIC took over the assets and
After the economic crisis of 1991, the Narsimha Rao led Government adopted
the policy of deregulating all the sectors including the insurance sector from the
clutches of the Government and thereby promote the private players to prove
their worth. In this sequence in April, 1993 the Government of India appointed
The Committee submitted its report on 7th January, 1994 and made
In December 1996, Government tabled the IRA Bill in the parliament but due to
strong opposition form left parties the Government was forced to withdraw IRA
Bill in parliament.
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IRDA
Under the provision of the insurance Act, 1938 an institution of the controller of
the insurance was set up to act as a strong and powerful supervisory and
1956 and general insurance industry in 1972, the role of controller of insurance
high power committee to examine the structure of the insurance industry and
committee submitted its report on 7th January, 1994 and expressed the view that
the insurance regulatory apparatus should be activated even in the existing set
Regulatory Authority be set up. In view of this the government decided to bring
industry.
In order to provide better insurance coverage to the citizens and also to augment
the flow of long term resources for financing infrastructure , in the budget
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speech 1998 the policy of the government was announced to open up the
According the insurance Regulatory Authority Bill 1998 was introduced in the
Lok Sabha or 15th December 1998. The bill was referred to the standing
However the bill could not be taken up consideration on the dissolution of the
Lok Sabha. A fresh bill titled Insurance Regulatory and Development Authority
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Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of
IRDA:
• Subject to the provision of this act and any other law for the time being in
force. The authority shall have the duty to regulate, promote and ensure
section.
• Levying fees and other charges for carrying our the purpose or this act.
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• Specifying the form and manner in which books of insurer and other
intermediaries.
in clause.
The power and function mentioned above would enable the Authority to
perform the role of an effective watchdog and regulator for the insurance sector
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RESEARCH METHODOLOGY
PRIMARY DATA
face contact.
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information.
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SECONDARY DATA
2. Publish material
Tax Planning
PROCESSING OF DATA
ANALYSIS OF DATA
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SECTOR
90
80
70
60
50
40
30
20
10
0
40 - 45 age 46 - 50 age 51 - 55 age
INFERENCES
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90
80
70
60
50
40
30
20
10
0
40 - 45 age 46 - 50 age 51 - 55 age
INFERENCES
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BAJAJ CAPITAL LTD. C.I.M.T
70
60
50
40
30
20
10
0
40 - 45 age 46 - 50 age 51 - 55 age
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BAJAJ CAPITAL LTD. C.I.M.T
80
70
60
50
40
30
20
10
0
40 - 45 age 46 - 50 age 51 - 55 age
INFERENCES
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80
70
60
50
40
30
20
10
0
40 - 45 age 46 - 50 age 51 - 55 age
INFERENCES
90
80
70
60
50
40
30
20
10
0
40 - 45 age 46 - 50 age 51 - 55 age
Yes No
INFERENCES
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BAJAJ CAPITAL LTD. C.I.M.T
60
50
40
30
20
10
0
40 - 45 age 46 - 50 age 51 - 55 age
INFERENCES
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FINDINGS
of different perception
Generally most people prefer to keep their money float in the market
specified channels.
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BAJAJ CAPITAL LTD. C.I.M.T
sector.
People also prefer to invest in post office because of the saving in taxes
with fixed deposit, real estate, mutual funds and primary market.
According to the survey done, most of the people invest money to get
they would prefer primary market and mutual funds if they invest in
future.
the future they would like to invest in fixed deposits and to pay for the
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BAJAJ CAPITAL LTD. C.I.M.T
investment.
According to the survey done, most of the people who fall under the
Most of the investors falling under the category of income group which
People who are above the age of 51-55 presently make maximum of
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RECOMMENDATIONS
Earlier people prefer to keep their money either on home or keep in bank but
today people to see their money grow and today a lot of options are present
People who can bear high risk for that person the security market are good.
There is high risk and high return according to their investment amount.
Salaried people wants the security in their savings so for those people who
well as growth so Insurance is good option for them in which there is return as
well as security.
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LIMITATIONS
Some employees refuse to fill the questionnaire because they do not free time
Some employee does not read the questions carefully as a result they give the
wrong response
Most of employees do not give answer of the personal question related to PAN
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CONCLUSION
Many years ago people used to hold money means that they kept their money as
But today people are more aware of different investment option, which are the
medium risk and they will invest their money in that option where they get
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QUESTIONNAIRE
give your response to the following questions by ticking the appropriate choice.
1. Respondent Name__________________________________________
to 45 □ from 46 to 50 □ from 51 to 55 □
3. Education ______________________________________
_______________________________________________
□ Private □
35,000 □
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2.5 Lac. □
Public □ Private □
No □
No □
Yes □ No □
PPF □ NSC □
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……………………………………………………………………………………
…………
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BIBLIOGRAPHY
Books:
Investor India
Web Site
www.google.com
www.nseindia.com
www.amfi.com
www.mutualfundofinsa.com
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OF INDIA)
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