RESEARCH PROJECT ON

IMPACT OF PERSONAL FINANCIAL PLANNING ON INVESTORS AT

STATE BANK OF INDIA
FOR THE PARTIAL FULLFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF

BUSINESS ADMINISTRATION/ BACHELOR OF MANAGEMENT

STUDIES

UNDER THE GUIDANCE OF: SUBMITTED

BY:
DR. MC RASHID MOHD AMIR
14GSOB101191

Bachelor of Business Administration 2014-17

SCHOOL OF BUSINESS, GALGOTIAS UNIVERSITY

1
Certificate from Faculty Guide

This is to certify that the project report Impact of personal Financial Planning
on investors at State Bank of India has been prepared by
Mr/Ms----------------------------------------- under my supervision and guidance.The
project report is submitted towards the partial fulfillment of 3 year, full time
Bachelor of Business Administration.

Name and Signature of Faculty:

Date:

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STUDENT DECLARATION

I MOHD AMIR, Roll No 1404101101, student of BBA of School of Business, Galgotias University,
Greater Noida, hereby declare that the project report on Impact of personal Financial Planning
on investors at State Bank of India is an original and authenticated work done by me.
I further declare that it has not been submitted elsewhere by any other person in any of the institutes
for the award of any degree or diploma.

MOHD AMIR

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TABLE OF CONTENTS

CHAPTER
CONTENTS PAGENO
NO.
1. Executive Summary 5

2. Company Profile 6

3. Key Observation 9

4. Research Methodology 27

5. Results 39

6. Limitations 40

7. Conclusion & Recommendation 41

8. Appendices 42

9. Bibliography 45

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XCUTIV SUMMARY

Planning of financs is ssntial for ach and vry on, be it a school-going kid or a retired
citizn. Tharlir you bgin to manag your mony th bttr it is. Lts suppos you choos
not to plan and kp spnding as and whn you lik and on day you wish to purchas a
hous but thn you cannot as you hardly hav any savings lft. This is what happns whn
you dont plan and nd up ovrspnding.

W tnd to ovrspnd whn w do not undrstand what w rally nd. W kp on spnding

to fulfil all our rquirmnts and w los count of how much w spnt. On should
undrstand th diffrnc btwn your nds and wants. Things lik daily lunch, dinnr and
hous rnt paymnts ar our nds which w will hav to incur. But things lik play stations,
vidogams and movis ar always an option and can be don without. If vn w do want to
splurg on our wants w can st asid som of our savings ovr a tim priod and can buy
important nds lik vhicls, hous, highr ducation tc. whn w hav accumulatd
savings. This is what planning is all about, to plan, sav and hlp us achiv our financial
goals. Whn you start arly you can always plan for your futur financial goals and hav th
bnfit of mting thm whn you want to. This is bcaus you hav a longr tim horizon to
sprad out your invstmnts and manag your portfolio across tim. vry school-going kid
is taught from his childhood to count and sav mony for his futur so that h can us thm
appropriatly to financ his financial goals.

This tutorial on financial planning prsnts various aspcts of financial planning for collg
studnts. Financial planning is vry important for vry individual. If popl undrstand its
significanc at a youngr ag, achiving your futur financial goals bcoms mor convnint
as you can invst in diffrnt products to mt your nds.

5
COMPANY PROFILE

State Bank of India (SBI) is an Indian multinational, public sector banking and financial
services company. It is a government-owned corporation with its headquarters in Mumbai,
Maharashtra. On 01.04.2017, State Bank of India, which is India's large Bank merged five of
its Associate Banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of
Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank
with itself. This is the first ever large scale consolidation in the Indian Banking Industry. With
the merger, State Bank of India will enter the league of top 50 global banks with a balance
sheet size of 41 trillion, 277,000 employees, 500 million customers, and more than 22,500
branches and 58,000 ATMs. SBI's market share will increase to 22 percent from 17 per
cent. It has 198 offices in 37 countries; 301 correspondents in 72 countries. The company is
ranked 232nd on the Fortune Global 500 list of the world's biggest corporations as of 2016.

HISTORY

The roots of the State Bank of India lie in the first decade of the 19th century, when the Bank
of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of
Bengal was one of three Presidency banks, the other two being the Bank of Bombay
(incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July 1843).

All three Presidency banks were incorporated as joint stock companies and were the result
of royal charters. These three banks received the exclusive right to issue paper currency till
1861 when, with the Paper Currency Act, the right was taken over by the Government of
India. The Presidency banks amalgamated on 27 January 1921, and the re-organised banking
entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint
stock company but without Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India,
which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On
1 July 1955, the imperial Bank of India became the State Bank of India. In 2008,
the Government of India acquired the Reserve Bank of India's stake in SBI so as to remove
any conflict of interest because the RBI is the country's banking regulatory authority.

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Awards and Accolades

SBI was ranked as the top bank in India based on tier 1 capital by The
Banker magazine in a 2014 ranking.

SBI was ranked 232nd in the Fortune Global 500 rankings of the world's biggest
corporations for the year 2016.

SBI was named the 29th most reputed company in the world according
to Forbes 2009 rankings.

SBI was 50th Most Trusted brand in India as per the Brand Trust Report 2013,an
annual study conducted by Trust Research Advisory, a brand analytics company and
subsequently, in the Brand Trust Report 2014, SBI finished as India's 19th Most Trusted
Brand in India.

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RESEACRH PROFILE

The major task of my research project is Impact of Personal Financial Planning on investors at
State Bank of India . The task was to find the investment range and its value in the market.
This might look easy and one would assume such information can be asked straight forward
to the investors,but I was in Delhi a place of great business and financial hub in the mean
while I took help of one of my relative who is an employee at State Bank of India.

RESEACRH OBJECTIVES

1. The Process of financial planning investor would prefer before investing and its
constituents.

2. Financial Market and its types.

3. To know the investment avenue and its vast description before investiong and what
are investment annuities.
4. To study about mutual funds in brief as a profile of sample Indian individual investor
in terms of their demographics and demographics based on occupation of the sample
investor.

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KEY OBSERVATIONS

Planning of financs is ssntial for ach and vry on, be it a school-going kid or a retired
citizn. Th morarly you bgin to manag your mony th bttr it is. Lts suppos you
choos not to plan and kp spnding as and whn you lik and on day you wish to purchas
a hous but thn you cannot as you hardly hav any savings lft. This is what happns whn
you dont plan and nd up ovrspnding.

Whn you start arly you can always plan for your futur financial goals and hav th bnfit
of mting thm whn you want to. This is bcaus you hav a longr tim horizon to sprad
out your invstmnts and manag your portfolio across tim. vry school-going kid is taught
from his childhood to count and sav mony for his futur so that h can us thm
appropriatly to financ his financial goals.

W tnd to ovrspnd whn w do not undrstand what w rally nd. W kp on spnding

to fulfill all our rquirmnts and w los count of how much w spnt. On should
undrstand th diffrnc btwn your nds and wants. Things lik daily lunch, dinnr and
hous rnt paymnts ar our nds which w will hav to incur. But things lik play stations,
vidogams and movis ar always an option and can be don without. If vn w do want to
splurg on our wants w can st asid som of our savings ovr a tim priod and can buy
important nds lik vhicls, hous, highr ducation tc. Whn w hav accumulatd
savings. This is what planning is all about, to plan, sav and hlp us achiv our financial
goals.

Prsonal financial planning is th procss of managing your mony to achiv prsonal

conomic satisfaction. This planning procss allows you to control your financial situation.
vry prson, family, or houshold has a uniqu financial position, and any financial activity
thrfor must also be carfully plannd to mt spcific nds and goals. A comprhnsiv
financial plan can nhanc th quality of your lif and incras your satisfaction by rducing
uncrtainty about your futur nds and rsourcs.

Th spcific advantags of prsonal financial planning includ:

Incrasd ffctivnss in obtaining, using, and protcting your financial rsourcs

throughout your liftim.

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 Incrasd control of your financial affairs by avoiding xcssiv dbt, bankruptcy, and
dpndnc on othrs for conomic scurity.

Improvd prsonal rlationships rsulting from wll-plannd and ffctivly communicatd

financial dcisions.

This tutorial on financial planning prsnts various aspcts of financial planning for collg
studnts. Financial planning is vry important for vry individual. If popl undrstand its
significanc at a youngr ag, achiving your futur financial goals bcoms mor convnint
as you can invst in diffrnt products to mt your nds.

10
PROCSS OF FINANCIAL PLANNING

Stp 1: stablish Financial Goals

ncourag th clint to xprss concrns, hops, and goals. Hlp th clint to rstat goals
that ar spcific and quantifiabl. Prioritiz compting goals.

Stp 2: Gathr Rlvant Data

Gathr all rlvant clint information, both objctiv and subjctiv, through fact finding
forms, qustionnairs, counslling, and xamination of documnts.

Stp 3: Analys th Data

Idntify th strngths and th waknsss in th clints prsnt financial condition as thy
affct th ability to achiv th clintsgoals. Rvis goals if ncssary.

Stp 4: Dvlop a Plan for Achiving Goals

Dsign a st of rcommndd stratgis tailord to th clints circumstancs and goals,
including altrnativ ways of achiving thos goals. Draw on othr xprts as ndd. Obtain
clint approval.

Stp 5: Implmnt th PlanMotivat and hlp th clint acquir all th ncssary financial
products and srvics to put th plan into action. Draw on othr xprts as ndd.

Stp 6: Monitor th Plan: - valuat th prformanc of all implmntation vhicls.

Rviw changs in th clints circumstancs and th financial nvironmnt. Rvisit th stps
whn ncssary.

Constitut of Financial Planning

A good financial plan should includ th following things

Contingncy planning
Risk covrag
Rtirmnt planning
Tax planning

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Risk Covrag

vry individual is xposd to crtain typ of risk whthr it is du to loss or damag of

prsonal proprty, loss of pay du to illnss or disability. Such a risk cannot b dtrmind
but on occurrnc thr may b financial loss to th individual and th family. Propr
financial planning includs insuranc and its kinds. On major rol of propr financial
planning is to mak sur that on has th ability to carry on living in cas of som unforsn
and unfortunatvnt. Basically insuranc provids safty to provid th ncssary funds
whn on mt with vnts lik accidnts, disabilitis and illnss. On major contribution of
insuranc is that it hlps provids pac of mind knowing that nough funds ar at hand in
thvnt whn things do not go th way it should b.

Tax planning

A good plan is on which taks th maximum advantag of various incntivs offrd by th

incom tax of laws. Financial planning objctiv gts maximum advantag of various
avnus. Thr ar many invstmnts which do not offr tax shltr that dos not man thy
ar not good invstmnts. But with th knowldg of th Incom tax on can rduc incom
tax liability. It also hlps to dcid whr to invst undr various sctions. Th rat of incom
tax is diffrnt for diffrnt incom lvls and thus th incom tax payabl dpnds on th
total arnings in a givn yar.

Contingncy planning

It is th basic and th vry first stp of financial planning. It was foundd that th larg
numbr of popl hav invstd in financial planning instrumnt, may b thy hav plannd it
for futur and this would dfinitly hlp in long run. vryon thinks that thy hava scur
prsnt with rgular salary, but what if suddnly somthing happns du to which thy cannot
draw thir rgular salary. Thr can b possibilitis lik illnss or injury for which hug
amount of mony can b rquird.

If a prson has not plannd for his contingncis h will us his long trm invstmnt to find
for such crisis. It is possibl that long trm invstmnt may not givnough rturns if

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withdrawn arly but thr is a possibility of capital rosion. With long trm planning prson
also nd to tak car of prsnt situation in ordr to truly achiv financial goals.

Rtirmnt planning

A rtirmnt plan is an assuranc that prson will continu to arn a satisfying incom and
njoy a comfortabl lifstyl, vn whn thy ar no longr working. Du to th improvd
living conditions and accss to bttr mdical facilitis, th lifxpctancy of popl starts
incrasing. This has ld to a situation whr popl spnds approximatly th sam numbr of
yars in rtirmnt what thy hav spnt in thir activ working lif. For this a propr
rtirmnt planning will nsur this.

Planning for rtirmnt and choosing a pnsion stratgy to safguard financial scurity can b
usful. In th past fw yars, thr has bn many changs lik th volatility of stock markt,
rduction of final salary pnsion schms and changs in som taxation incidncs.

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Scop and its significanc
Financial planning is an intgral part of an individual lif whr valu of vrything is
xprssd in trms of mony. Th working span of human lif is short as compard to lif
span. Thus it is important to sav and invst whil working so that a prson can arn a
satisfying incom and ac comfortabl lif. It nabls a prson to idntify thir goals and
assss th currnt position and taks th ncssary stps to achiv th goals. It is not just
about invstmnt planning but about lif tim planning so with propr financial planning a
prson can hav an asy and scurd financial lif.

Th scop of study is gtting familiar with various invstmnts avnus availabl in markt.
To study th lif stags of an individual and to idntify thir risk tolranc, incom flow, lif
goals and currnt invstmnt. Study should covr all aras of an individuals financial nds
and should rsult in th achivmnt of ach individuals goals.

This topic was slctd to study financial apptit and invstmnt potntial of Indian
invstors to invst in ths instrumnts. Th basic rason of slcting ths thr instrumnts
of invstmnt i.. mutual funds, insuranc and tax planning is that ths instrumnts covr th
most basic invstmnt nds of an individual. Mutual funds offr th advantags of
divrsification, profssional managmnt, liquidity, assurd allotmnt, tax saving and
transparncy. So undrstanding ths instrumnts is a must as thy form th most basic and
ssntial part of an invstmnt portfolio.

Financial Markts

A financial markt is a markt financial assts ar cratd or transfrrd. Ths assts

rprsnts a claim to th paymnts of a sum of mony somtim in th futur or priodic
paymnt in th form of intrst or dividnd. It prforms an important function of mobilisation
of savings for th productiv purposs or usags. Th participants in th financial markts ar
financial institutions, agnts, brokrs, dalrs, borrowrs, lndrs, savrs and othrs who ar
intr-linkd by th laws, contracts and communication ntworks.

Financial markts consists of primary and scondary markts. Primary Markt also calld
th nw issu markt, is th markt for issuing nw scuritis. Th scondary markt dals in
scuritis alrady issud. Ths ar also classifid as mony and capital markts. Mony
markt dals with transactions in short trm instrumnts for .g. trasury bills whil capital

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markts dals with transactions in long trm instrumnts for .g. corporat dbnturs and
govrnmnt bonds.

On th basis of th typ of th financial claim, th financial markts ar classifid as dbt and

quity markts. Th classification of financial markts can be summarizd as follows:

Mony markt
Dbt markt
Forx markt
Capital markt

Mony Markts

Th mony markt is a markt for short-trm instrumnts that ar clos substituts for mony.
It provids for th quick and dpndabl transfr of short trm dbt instrumnts maturing in
on yar or lss, which ar usd to financ th nds of consumrs, businss agricultur and
th govrnmnt. Th mony markt consists of call and notic markt, commrcial bills
markt; commrcial papr markt, trasury bills markt, intr-bank markt and crtificats of
dposit markt. All ths markts ar closly intrrlatd so as to mak th mony markt. It
is a wholsal markt whr largnumbrs of financial assts or instrumnts ar tradd.

Forign xchang Markt

Forign xchang markt is th markt in which forign currncis ar bought and sold. Th
buyrs and sllrs includ individuals, firms, forign xchang brokrs, commrcial banks
and th cntral bank. Th transactions in this markt ar not confind to only on or fw
forign currncis. In fact, thr ar a larg numbr of forign currncis which ar tradd,
convrtd and xchangd in th forign xchang markt.

Forx markt is th largst financial markt in th world having a daily turnovr of coupl of
trillion dollars. Th ky participants in this markt ar importrs, xportrs and brokrs. In
India th ky participants ar RBI, banks and businss undrtakings. Ths can also
participat in th forx markt only to somxtnt.

Capital markt- Ths markts provid th rsourcs ndd by mdium and larg scal
industris for invstmnt purposs unlik mony markts that provid th rsourcs for

15
working capital nds. Ths markts dals in long trm claims. Stock markt and
Govrnmnt bond markts arxampl of capital markts.

Ths markts consists of primary and scondary markts. Th primary markts crat long
trm instrumnts through which corporatntitis borrow and th scondary markt provids
liquidity and marktability to ths instrumnts.

Dbt markt

Dbt markt rfrs to th financial markt whr invstors buy and sll dbt scuritis,
mostly in th form of bonds. Ths markts ar important sourc of funds, spcially in a
dvloping conomy lik India. India dbt markt is on of th largst in Asia. Lik all othr
countris, dbt markt in India is also considrd a usful substitut to banking channls for
financ. Th most distinguishing fatur of th dbt instrumnts of Indian dbt markt is that
th rturn is fixd. This mans, rturns ar almost risk-fr. This fixd rturn on th bond is
oftn trmd as th 'coupon rat' or th 'intrst rat'. Thrfor, th buyr of bond is giving
th sllr a loan at a fixd intrst rat, which quals to th coupon rat.

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Invstmnt Avnus

By Invstmnt Avnu w man a particular organization or systm in which an invstor can

plac his surplus funds with th objctivs of having crtain gains in thfutur. This
organization may b wll organizd lik a bank, financial institution, mutual funds and
company or in an unorganizd mannr lik chit fund organization. Diffrnt invstmnt
avnus hav diffrnt faturs; fw offr a fixd rturn and crtain othrs offr stock markt
basd rturns and yt crtain othrs offr a mix of ths two. Fw of ths havanlmnt of
safty and yt othrs do not hav any kind of safty. In crtain cass ths ar in
ngotiablform and in othr cass ths ar non-ngotiabl. Invstmnt avnus of a country
arsubjct to diffrnt ruls and rgulations of ithr th govrnmnt or som apx body lik
Rsrv Bank of India, NABARD, SBI or Companis Act.

1. Lif Insuranc

Lif insuranc covrs all th potntial dangrs, which may damag lif. A lifinsuranc can
b short trm and prmannt. A short trm lif insuranc plan protcts th prson for a crtain
amount of tim. A prmannt lif insuranc policy covrs thprson until h pays off his
monthly prmiums rgularly. It is a policy providd by an insuranc company and it is
bnficiary for vry citizn of India aftr all it is a mattr of ons lif. By paying a vry
small sum of mony a prson can safguard himslf and his family from occurring an
unfortunatvnt. It is an important stp as planning from othr significant actions in lif. It
provids conomic support to th dpndnt in family. It is always important to find out why
do I want to buy insuranc and for what purpos. A wid rang of insuranc products ar
availabl in th markt and ach on is diffrnt from othrs having som uniqu attributs
which can mt spcific nds of diffrnt individuals. Howvr with such wid rang of
products availabl, it bcoms vry difficult for an individual to choos an insuranc plan to
mt his or hr rquirmnts. So basd on an individuals nds and rquirmnt on can buy
anyon of th plans availabl in th markt. Som of th plans ar listd blow:

I. Trm Insuranc

This insuranc is for a spcific priod and has th lowst possibl prmium along all th
insuranc plans. Prson can slct th lngth of th trm of thir own wish up to th priod of
35 yars. Undr such insuranc paymnts ar fixd and do not shuffl during th trm priod.

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 If in any cas any incidnt occurs, dpndants will rciv th bnfit amount undr that
priod.

II. ndowmnt Insuranc

This is th most popular policy in th world of lif insuranc. This policy covr th risk for a
spcifid priod and at thnd th assurd is paid back with bonus during th trm policy.
This policy works in two ways, on by providing lif insuranc covr and on th othr hand a
vhicl for saving. A purndowmnt policy is also a form of financial planning, whrby if
th prson covrd rmains aliv byond th tnur of th policy, h gts back th sum
assurd with som othr invstmnt bnfits.

III. Halth Insuranc

Halth insuranc covr protcts th policy holdr from any kind of accidnt and mdical
conditions. B it th mdical xpnss, th consultant's fs, or th accidnt covr, a halth
insuranc policy taks car of any halth rlatd issu. Halth insuranc can b short trm and
long trm. Group halth insuranc is offrd by corporat houss.

IV. Mony back plus

This policy is quit similar to ndowmnt insuranc plans whr th survival bnfits ar
payabl only at thnd of th trm priod. An additional and important fatur of mony back
policis is that at th tim of incidnt occurs during th trm policy, th company givs
survival bnfits amount. Such plans ar idal for thos who ar looking for a product that
provids both insuranc covr and savings. It crats a long trm savings opportunity with a
rasonabl rat of rturn undr spcifid situations.

V. ULIP

In a ULIP, invstors hav th choic of invsting in a lump sum or making prmium

paymnts on an annual, half yarly, quartrly or monthly basis. Invstors also th flxibility
to altr th prmium amounts during th policy tnur. For xampl if an individual has
surplus funds, h can nhanc th contribution in ULIP. Such invstors can shift thir
invstmnts across various plans or assts ithr at a nominal or no cost.

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VI. Annuity and Pnsion

A pnsion plan or an annuity is an invstmnt that is madithr in a singl lump sum

paymnt or through instalmnts paid ovr a crtain numbr of yars, in rturn for a spcific
sum that is rcivd vry yar. Annuity is diffr from all othr forms of lif insuranc and in
that annuity dos not provid any lif insuranc covr but, instad offrs a guarantd
incomithr for lif or a crtain priod. By buying an annuity or a pnsion plan th annuitant
rcivs guarantd incom throughout his lif.

Typs of annuitis

Lif annuity: It guarants a spcifid amount of incom for liftim.

Guarantd Priod Annuity: It provids spcifid incom for liftim and guarants that
nomin will rciv paymnts for a crtain minimum no of yars, vn if a prson dis
arlir.

Annuity crtain: Undr this plan, th annuity is paid for a fixd numbr of yars. Th
annuity paymnts stop at thnd of that priod, irrspctiv of how much longr a prson
livs.

Dfrrd Annuitis: Th prmium paid into such plans may b dductd from ons taxabl
incom at th tim of paymnt and th intrst arnd on th annuity is not taxd
immdiatly.

2. quitis

Ths ar th typ of scurity that rprsnts th ownrship in a company. quitis ar tradd

in stock markts. Thy can b purchasd via th Initial Public Offring rout dirctly from th
company. Invsting in quitis is a good and long trm invstmnt option as th rturn on
quitis ovr a long trm horizon ar gnrally highr than most othr invstmnt avnus. It
is all about growth but as anquity invstor, you ar part ownr of a company and hnc
participat in th growth opportunitis that your company can bnfit from. Also, as good
companis ar normally abl to adjust to inflation by ithr incrasing prics or by controlling
costs, quitis also normally offr th bst hdg to inflation.

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3. Mutual Funds

A Mutual fund is an invstmnt tool that allows small invstors to accss a wll-divrsifid
portfolio of quitis, bonds and othr scuritis. A mutual funds is a profssionally managd
firm of collctiv invstmnts that pools mony from many invstors and invsts it in stocks,
bonds, short-trm mony markt instrumnts, and othr scuritis. This invstmnt avnu is
popular bcaus of its cost-fficincy and risk divrsification. Prson can invst as littl as
Rs.1000 pr month in a mutual fund. A mutual fund is a trust that pools th savings of a
numbr of invstors who shar a common financial goal. Th mony thus collctd is thn
invstd in capital markt instrumnts such as shars, dbnturs and othr scuritis. Thr
ar svral bnfits from invsting in Mutual funds.

a) Small Invstmnts

Mutual funds hlp to rap th bnfit of rturns by a portfolio sprad across a wid spctrum
of companis with small invstmnts. Such a sprad would not hav bn possibl without
thir assistanc.

b) Profssional Fund Managmnt

Profssionals having considrablxprtis, xprinc and rsourcs; manag th pool of

mony collctd by mutual funds. Thy thoroughly analyz th markts and conomy to pick
good invstmnt opportunitis.

c) Sprading Risk

An invstor with a limitd amount of fund might be abl to invst in only on or two stocks
or bonds, thus incrasing his or hr risk. Howvr, mutual funds will sprad its risk by
invsting a numbr of sound stocks or bonds. A fund normally invsts in companis across a
wid rang of industris, so th risk is divrsifid at th sam tim taking advantag of th
position it holds. Also in cass of liquidity crisis whr stocks ar sold at a distrss, mutual
funds hav th advantag of th rdmption option at th NAVs.

d) Liquidity

20
Closd ndd funds hav thir units listd at th stock xchang, thus thy can be bought and
sold at thir markt valu. Ovr and abov this, th units can be dirctly rdmd to th
mutual funds as and whn thy announc th rpurchas.

21
e) Choic

Th larg amount of mutual funds offrs th invstor a wid varity to choos from. An
invstor can pick up a schm dpnding upon his risk and rturn profil.

f) Rgulations

All th mutual funds ar rgistrd with SBI and thy function within th provisions of
strict rgulation dsignd to protct th intrsts of th invstor.

22
Mutual Fund Typs

Risk hirarchy of diffrnt mutual funds

Diffrnt mutual fund schms arxposd to diffrnt lvls of risk and invstors should
know th lvl of risks associatd with ths schms bfor invsting. It provids a clar
pictur of th rlationship btwn mutual funds and lvls of risk associatd with ths
funds.

23
4. Crtificat of dposits

It was introducd in India in 1991. It is a schm of raising funds by commrcial banks,

xcpt rural banks and is a ngotiabl rcipt of funds. Du to thir ngotiabl natur, thy
ar also calld ngotiabl crtificat of dposit. It may b in a rgistrd form or a barr
form. Th latr is mor popular as it can b transactd mor radily in scondary markts.
Unlik trasury bills, this carris anxplicit rat of intrst. Subscribrs to th crtificat of
dposits ar individuals, corporations, companis, trusts, funds and associations tc.

Though intrst on crtificat of dposits is taxd, it is still popular form of short-trm

invstmnts for companis du to following rasons:

Ths crtificats ar fairly liquid

Thy ar gnral risk fr
Thy offr a highr yild as compard to convntional dposits.

24
5. Public Providnt Fund

PPF is considrd saf invstmnt avnu. Th currnt intrst rat on PPF is 8.7% pr
annum. Again likPF th rat of intrst is rvisd 8.80%. Th govrnmnt modifis th
sam from tim to tim. Th bst part of PPF is that th intrst thron is xmpt from tax.
Tax dduction can b claimd on contribution mad by an individual into his own PPF
account or into th PPF account of his spous or childrn.

PPF account can b opnd in a nationalizd bank or a post offic. It is a 15 yar account.
Thntir amount including accumulatd intrst can b withdrawn aftr 15 yars.

Many may not lik to invst on PPF du to its vry long tnur. Howvr on may opn an
account and contribut only small sums initially; aftr all minimum annual contributions.

6. Ral stat Invstmnt

Ral stat invstmnt is now tratd as a major cas of capital budgting by using stat of
th art invstmnt analysis which incorporatd th futur schms of incom with associatd
risk adjustmnts. It has bn th highlight of th invstmnt litratur sinc th 1970s whn
invstmnt thorists xtndd tchniqus such as probability, tim valu of mony and utility
into its analysis.

7. Gold

Th lov to invst in gold is always bn a good option for invstors. Thr has always bn a
dmand for gold in India making it th largst consumr of gold in th world. Th
consumption of gold is mostly in form of jwllry. But as invstmnt an invstors gnrally
buy gold as a barrir or saf havn against any political, social or currncy basd crisis. Ths
crisis includ invstmnt markt dclins, inflation, war and social unrst.

It can b bought in various forms, on can ithr buy it in th form of physical gold bars,
gold- coins tc. Gold jwllry is not a good invstmnt as it is not as liquid as bars as gold
fund. Th disadvantag is that a hug amount is to b paid as making chargs or dsign
chargs which is discountd whil slling it. Th scond disadvantag is most jwllrs do
not giv cash instad of gold. Instad thy allow to xchang it for gold jwllry.

25
8. Invstmnt in bank

It is th most common or primary invstmnt avnus. Not many popl rcogniz this sctor
as an invstmnt avnu. Banks ar th most common so think of gaining xprinc by
invsting in it. Fw invstmnts in banks can b in th following forms such as fixd dposit,
saving bank account and rcurring dposit.

9. Invstmnt through post offic

It is also a major part in Indian houshold invstmnt, which is mostly du to its all India
prsnc of srvic ntwork. Diffrnt avnus for post offic invstmnt ar such as post
offic rcurring dposit, trm dposit, national saving crtificat and many mor.

26
ResearchMethodology

1. Rsarch objctivs
To analyz th procss for making prsonal financial dcisions.
To assss prsonal and conomic factors that influnc prsonal financial planning
To idntify stratgis for achiving prsonal financial goals for differentlife
situations

About the research

Research project is a systematic presentation consisting of the enunciated problem,

formulated hypothesis, collected facts of data, analyzed facts and proposed conclusion in
form of recommendation. Thus, it is the scientific way of carrying out a method for doing
research. It includes overall research design, the sampling procedure, data collection method
and analysis procedure. In short the search for knowledge through objective and systematic
method of finding solution to a problem in research.

Sample Size:
The sample size taken in the report is 50 respondents across Delhi/NCR.

Sources of data collection method:

There are two ways to collect the data i.e. primary data collection method and secondary data
collection method.

Primary Data:
Information is collected by conducting a survey by distributing a questionnaire. These
investors are of different age group, different occupation, different income levels, and
different qualifications.

Secondary Data:
This data is collected by using the following means.
1. Investment Magazines, Business Magazines, Financial chronicles.
2. Experts opinion published on various print media and data available on internet
websites

27
Data Analysis and Interpretations

1. Ag circulation of th rspondnt
Ag group of rspondnts No of rspondnts Prcntag
20-30 11 22
30-40 15 30
40-50 9 18
50-60 10 20
Abov 60 5 10
Total 50 100

No of respondents
15
16
14
11
12 10
9
10
8 5
6
4 No of respondents
No. of respondents
2
0

Age

Popl from btwn 30-40yrs of ag group ar considrd to be th most activ ag group.

This is th ag whr popl taks maximum risk in thir lif basd on thir xprinc and
knowldg. Thy ar mor inclind towards thir family, thy can be th bttr judg of thir
lif but as thir lif progrsss, family rsponsibility incrass and thir ability rducs with
ag and this can be clarly obsrvd with th hlp of graph. This is how financial planning
should be don by th popl of India.

28
2. How much risk dos a prson is willing to tak with a growing ag?

Ag group Willing to tak risk Total

High Modrat Low
20-30 4 5 2 11
30-40 6 6 3 15
40-50 5 3 1 9
50-60 3 4 3 10
Abov 60 1 2 2 5
Total 50

6 6
6
5 5 55 55 5
5
4 44444 4
4
3 33333 3 3 3
3
2 22 22 2 2 2
2
Risk 11 11 1 1 1
1

Age

W all ar awar of th fact that th invstmnt dcisions could be mor mnac. So th

abov graph rprsnts th radinss to go for invstmnts at diffrnt lif stags. What
happns whn you arin an ag group of 30-40, individuals ar mornrgtic and thy think
of doing invstmnt and willing to tak risks to mak thir financial planning mor succssful
for th yars to com. As th ag progrsss th willingnss to invst dclins.

29
3. Incom circulation of rspondnt

Incom upto No of rspondnts Prcntag

400000 8 16
400000-500000 13 26
500000-600000 11 22
600000-700000 5 10
700000-800000 6 12
Abov 800000 7 14
Total 50 100

No of respondents
13
14 11
12 8
10 7
6
8 5
6
4
2
No of respondents 0

Income

Abov graph shows th incom distribution of popl of diffrnt ag groups. It is ncssary

to know th incom flow of ach and vry individual. Th amount of incom dtrmins th
various invstmnt dcisions that a prson tak in his lif. It is not ncssary that popl nd
to invst only if thy ararning hug amount of mony. As w can s that th major portion
of rspondnts ar in th incom slab of Rs400000- Rs500000, so this shows that vn if thy
arbe in th bginning stag of thir carr thy can invst as pr thir nd and rsourcs in
hand.

30
4. Invstmnt mad in diffrnt avnus

Avnu Rspondnt Prcntag

Lif Insuranc 17 34
Public providnt fund 13 26
Mutual fund 10 20
Fixd dposit 6 12
Gold 4 8
Total 50 100

Respondent
17
18 13
16 10
14
12 6
10 4
8
6
4
2
Respondents 0

Avenues

Through this graph w can obsrv that diffrnt popl hav got a fair chanc to invst in
diffrnt avnus. This is th bttr stp to invst and mak your financial planning strongr.
It shows that almost vryon was a part of lif covr policy and what w can obsrv from
this is that th major invstmnts wr mad in lif insuranc and public providnt fund.
Ths ar th two such avnus whrvryon tris to approach and mak his financial
planning strongr. Vry fw of thm invstd in gold as wll.

31
 Objctiv Rspondnt
Standard of living 18
Safty 6
Dfnd against possibilitis 8
Mting futurxpnss 18
Total 50

Respondent

18 18

8 6

Standard of living
Safety
Defend against possibilities
Meeting future expenses

This graph shows that diffrnt popl hav got invstmnt objctivs. Som aim for highr
invstmnts and som aim for lowr but th rsult ultimat dpnds upon thxprinc. So it
is important to dtrmin th invstmnt objctivs to mt its avnus. According to th
graph invstmnt should be mad as it hlps in raising living standards and mting
futurxpnss. As for safty sid popl should also look to invst in banks and PPF.

32
5. Individual satisfaction on thir prvious invstmnt

Satisfaction Rspondnt Prcntag

Ys 10 20
No 32 64
Nutral 8 16
Total 50 100

Respondent

8 10

32

Yes No Neutral

This graph tlls us about th prvious invstmnt of diffrnt popl. As w can s that
majority of popl ar not satisfid from thir prvious invstmnt with th rturns thy hav
got. This also highlight that th invstmnt was not don proprly and th rason could be
insufficint knowldg of financial planning, no propr planning of invstmnt or may be
misguidd by diffrnt dalrs at som point of tim. So thr ar th smallr critrias whr
on nds to hav a clos look bfor invstmnt.

33
6. Montary litracy of rspondnt

Financial litracy Rspondnt

Vry good 16
Good 12
Avrag 17
Poor 5
Total 50

Respondent
17
18 16
16
14 12
12
10
No of respondents 8 Respondent
5
6
4
2
0
Very good

Financial literacy

According to th abov showing graph, th rason bhind knowing th financialducation is

to bcom mor familiar with how bttr is th oprant in knowing or planning for his own
invstmnt. Th broadr sgmnt of rspondnt can bexprssd by knowing th
dcntinformation of an oprant and his portfolio. In this mannr it can bexprssd that
many ar not prpard to rcogniz that thy don't hav th rquird larning but actually it is
not so. It is just a mattr of larning and implmnting. So this maks difficult for thm to
mak right slction.

34
7. Sourcs of information that has influnc th invstors on thir invstmnt
dcision

Sourcs Rspondnt
Nwspapr 15
Frinds, Prs 6
Mdia 13
Agnts 9
Profssionals 7
Total 50

Respondent
15
13
16 9
14 6 7
12
10
8
6
4
2
0

No of repondents

Sources

Diffrnt popl hav com up with diffrnt sourcs of information from whr thy can
think of doing invstmnt as pr thir nds. This shows how much popl ar kn for
making thir financial statmnts strongr. As w can s that nwspaprs and mdia is th
only sourc from whr you can gt sufficint information about day to day invstmnts.
Such sourcs ar vital in vry individuals lif. Mostly popl prfrrd lss providing
information from thir frinds bcaus it may or may not be tru dpnding upon thir
xprinc.

35
8. Rspondnt roccurrnc of invstmnt

Invstmnt frquncy Rspondnt Prcntag

Monthly 2 4
Quartrly 15 10
Half yarly 17 34
Annually 18 36
On-tim 8 16
Total 50 100

Respondent
17 18
15
18
16
14
12 8
10
8
6 2
4
2
No of respondents 0

Frequency

According to this graph popl prfr to invst mor on annual basis and if thy do so thy
can gt good rturns. Long trm invstmnt gnrally hav lowr risks and as a rsult popl
gnrally invst long trm. Short trm invstmnts lik on a monthly or quartrly basis, ths
can be a bttr option but this rquirs morxprinc and planning. On can xprinc
gratr risks in such invstmnts. For tangibl assts lik land, machinry and gold on tim
invstmnts can be a bttr option.

36
9. Invstmnt in mutual funds

Invstmnt Rspondnt
Dbt fund 10
quity fund 11
Mony markt fund 9
Indx fund 14
Balancd fund 6
Total 50

Respondent
14
10 11
14 9
12 6
10
8
6
4
2
0

No of respondents

Investment

W can obsrv that mutual funds has its diffrnt typs to invst. Invstors hav invstd
mor in indx fund as thy can provid gratr opportunity and markt apprciation. At th
sam tim invsting in dbt, quity and mony markt funds provids lss rturns and also
minimiz th risk of capital corrosion. Such invstmnts nds to be mad carfully having
lssr rturns but highr risks.

37
10.Do rspondnts havnough tim to dal with thir invstmnt opportunitis

Tim availabl Rspondnt Prcntag

Ys 8 16
No 42 84
Total 50 100

Respondent

42

Yes No

So from th abov data it rflcts that many popl do not nough tim for an invstmnt
opportunity but thy also fl that such invstmnts ar ncssary to be madvn for onc in
a lif tim. So what you nd to do is just wait for th opportunity and invsts.

38
RESULTS

1. The findings that I have conducted from the research suggests that Investment is all
about learning and experience.
2. What we have seen or observed from the above interpretations is that the people of age
group 30-40s are keener to invest into diversified categories.
3. Investment opportunities are widely available in our country, with the help of
investment we can secure our life towards the better future and for the better standard of
living.
4. Since the opportunities are more but people get less time to think of investment may be
because of risk involved in it so they go for one time investment depending upon the
funds available and circumstances.
5. We have also noticed that the mutual funds are subject to market risk but investing in
such provides can provide better opportunities and market appreciation. Generally
people try to invest on annual basis and when they do so they get good returns.
6. From the analysis we can say that people should made long term investments as they
generally have lower risks.
7. There are various sources of information about investment from where people get
influence on their investment decision. Some of them like newspapers, media, friends,
agents and professionals.
8. One thing is very important for investors point of view is that whenever they make any
investment, one needs to highly knowledgeable about investment.
9. It is a good option for each and every one to earn money but simultaneously it is also a
concept of brain game.

39
LIMITATIONS

40
CONCLUSION

I would like to conclude by saying that the financial investments decisions are necessary in
each and every individuals life but these decisions needs to be taken when one is aware of
how to plan and manage financial resources. Before begin with the financial carrier what is
required is to know more about the importance of financial planning. Try to set some
financial short and long term goals. Begin with short term investments and monitor your
progress on daily basis. One needs to keep track of the investments as per the income. Earlier
trend was to save more and more and do not for the investments. Other important fact is one
must need to understand the difference between need and want. In todays time everyone
wants to invest but ultimately investment should be made depending upon the market
conditions. The goal should be properly implemented and divided into short term and long
term. Therefore it is very important to understand its significance at a younger age, achieving
your future financial goals becomes more convenient as you can invest in different products
to meet your needs. One thing is very important for investors point of view is that whenever
they make any investment, one needs to highly knowledgeable about investment. So, it is
important to start taking little risk and start investing independently. It is a good option for
each and every one to earn money but simultaneously it is also a concept of brain game.

41
ANNEXURE: QUESTIONARIE

Ag

o 20-30
o 30-40
o 40-50
o 50-60
o abov 60

Incom

o upto 400000
o 400000-500000
o 500000-600000
o 600000-700000
o 700000-800000
o Abov 800000

1. What rat of your monthly compnsation do you spar?

o abov 15%
o btwn 15%-25%
o btwn 25%-35%
o btwn 35%-45%
o abov 50%

2. Hav you mad any invstmnt bfor for th blow givn avnus?

o Mutual fund
o Lif Insuranc
o PPF
o Gold
3. In which sgmnt of mutual fund you will prfr to invst?

o dbt funds
o indx funds
o mony markt funds

42
 o divrsifid quity funds
o balancd funds

4. How would you prfr your invstmnt frquncy?

o monthly
o quartrly
o half yarly
o annually
o on-tim

5. What ar th sourcs of information that can influnc your invstmnt

dcision?

o nwspaprs
o agnts
o frinds and prs
o mdia

6. Do you havnough tim to dal with your invstmnt opportunities?

o ys
o no
o may be

43
7. Monetary literacy of individuals
o very good
o good
o average
o poor

8. How much risk does a person is willing to take with a growing age?
o High
o Moderate
o low

9. What wr th important objctivs that you think of bfor making an

invstmnt?

o Safty
o mting futurxpnss
o high standard of living
o dfnd against possibilitis

10.Ar you satisfid with your invstmnt?

o Ys
o No
o Nutral

44
BIBLIOGRAPHY

1. WWW.MYWEALTHGUIDE.COM

2. WWW.MONEYCONTROL.COM

3. WWW.FINANCIALPLANNINGINDIA.COM

4. WWW.SCRIBD.COM

5. WWW.SEBI.COM

6. WWW.FPSB.CO.IN

7. WWW.INVESTOPEDIA.COM

8. WWW.LEARNVEST.COM

9. WWW.BUSINESS.REDIFF.COM

45