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TOPIC OF REPORT

Consumer Preference
to Fixed deposits over
Mutual fund

Presented
By
Namita jain
PREVIEW
 INTRODUCTION TO SUBJECT
 OVERVIEW OF ORGANISATION
 OBJECTIVE OF STUDY
 RESEARCH METHODOLOGY
 DATA ANALYSIS AND TESTING OF
HYPOTHESIS
 FINDINGS AND SUGGESTIONS
 CONCLUSION
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FIXED DEPOSITS
 When you want to invest your hard earned
money for a longer period of time and get
a regular income, our Fixed Deposit
Scheme is ideal
 It is SAFE, LIQUID and FETCHES HIGH
RETURNS.

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BENEFITS OF FIXED DEPOSITS
 . Interest paid either monthly or quarterly
 The yield or return on a fixed deposit is different
from interest. Interest paid either monthly or
quarterly
 Possible to take loans against fixed deposits
 Bank fixed Deposits are exempt from income tax
up to a limit of Rs 9, 000/- under Section 80L,
though TDS is applicable on interest earned on
Fixed Deposits of Rs 10,000/- and above.
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Introduction to Mutual fund
 A mutual fund is a pool of money contributed by
individuals who have similar financial goals. The
money collected is then invested in various
securities such as equities, debentures/bonds
and/or money market instruments.
 Main function of Mutual fund:
 Buying and selling of securities on behalf of its
unit holders.
 Enables the small investors to share in large and
diversified portfolio of assets, which reduces the
risk of Investment.

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HISTORY
 Unit Trust of India was the first mutual fund set up in
India in the year 1963.
 In early 1990s, Government allowed public sector
banks and institutions to set up mutual funds.
 In the year 1992, Securities and exchange Board of
India (SEBI) Act was passed. The objectives of SEBI
are - to protect the interest of investors in securities
and to promote the development of and to regulate
the securities market.

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Working of Mutual Fund

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Type of Mutual fund

Mutual
fund

By portfolio By function By geography

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By portfolio

Specialized
Growth Funds Money Market Funds
Income funds
Funds

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GROWTH FUND
 Investment objective: Capital
appreciation of equity shares
 Investment avenue: Equity shares of
companies with high growth potential
 For e.g.. Morgan Stanley Growth Fund

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INCOME FUND

 Investment objective: Providing safety of


investments and regular income
 Investment avenue: Bonds, debentures and
other debt related instruments as well as equity
shares of companies with high dividend payouts.
 There are 2 aspects of income funds viz. low
investment risk with constant income and high
investment risk generating high income.
 For e.g.. Templeton Income Fund
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BALANCED FUND
 Investment objective: Modest risk of
investment and reasonable rate of return
 Investment avenue: Judicious mix of
equity shares, preference shares as well
as bonds, debentures and other debt
related instruments.
 For e.g.. GIC Balanced Fund

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SPECIALISED FUNDS
 Investment Objective: To take advantage
of conditions in a particular sector or a
specific income producing security
 Investment Avenue: Specialized
investments in securities of companies in
certain sectors or specific income
producing securities
 For e.g.. Kothari Pioneer's Internet
Opportunities
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MONEY MARKET FUND
 Investment objective: To take advantage of the
volatility in interest rates in the money market.
 Investment Avenue: Certificate of deposits
(CDs), call money market, commercial papers.
Investors can participate indirectly in the money
market through MMMFs.
 For e.g.. IDBI-PRINCIPAL Money Market Fund

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By FUNCTION

OPEN ENDED CLOSE ENDED


FUND FUND

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OPEN ENDED FUNDS
 An open-ended fund or scheme is one
that is available for subscription and
repurchase on a continuous basis. These
schemes do not have a fixed maturity
period. Investors can conveniently buy
and sell units at Net Asset Value (NAV)
related prices which are declared on a
daily basis. The key feature of open-end
schemes is liquidity.
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Close ended
 A type of unit trust that offers only a fixed
amount of shares, usually sold through a
brokerage firm by a broker. Most unit
trusts are not closed-end funds, they offer
unlimited shares and may be purchased
and redeemed directly by the individual
through the mail by check.

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KEY TERM
 The NAV per unit is the market value of
securities of a scheme divided by the total
number of units of the scheme on any particular
date. For example, if the market value of
securities of a mutual fund scheme is Rs 200
lakhs and the mutual fund has issued 10 lakhs
units of Rs. 10 each to the investors, then the
NAV per unit of the fund is Rs.20. NAV is
required to be disclosed by the mutual funds on
a regular basis - daily or weekly - depending on
the type of scheme.
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Different plans
PLANS

GROWTH PLANS

INCOME PLANS

DIVIDEND
RE-INVESTMENT
PLANS

SYSTEMATIC
INVESTMENT
PLANS
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Overview of Organization
Canara bank founded by late Shri A.S Rao
pai in July 1906.
 In 1969 , it declared to be Nationalized bank.
 In 2006 it completed its century of operation in
Indian banking system.
 With an unbroken record of profit since its
inception. As on march 2007 the total business
of bank was over Rs 2,40,000 crores.

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OBJECTIVE OF STUDY
 To determine which factors is consider
by investor before investing .
 To determine how much weightage is
given to fixed deposits over mutual fund.
 To determine purpose of investment.
 To identify whether purpose of investment
depends upon annual income of investor.

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RESEARCH METHODOLOGY
 It is descriptive and analytical research
 For research study primary data is collected by
structured questionnaire .
 Sample size is 50
 Mean and chi-square test with z-test is used for
testing of hypothesis.
 For data presentation pie and bar charts are
used.

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hypothesis
 1:Ho : Average preference of fixed
deposits is equal to Average preference of
mutual fund
 2: Ho : purpose of investment depends on
Annual income of investors.

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Return and Risk of various
securities

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DATA ANAYSIS OF
QUESTIONNAIR AND TESTING
OF HYPOTHESIS

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Do you invest your saved
money?
RESPONDENTS WHO INVEST MONEY

NO
12%

YES
88%

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What is your preferable investment
option?
perferred investment options

fixed deposits
26%
others
38%

mutual funds
36%

fixed deposits mutual funds others

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Purpose of investment

4%
32% saving
26%
income
tax benefit
future contingences
14% retirement
24%

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Ho: Average preference of fixed deposits is equal
to Average preference of mutual fund
Average preference of investors
Investment option Average
preference 40

30

mean valve
fixed deposits 26 20

10

Mutual funds 36 0
Fixed deposits Mutual fund Other

Others 38 instruments

It is analyze from above data that mutual fund


is more preferable as compare to fixed deposits
as X1<X2 .thus it means that preference of both
instrument among investors is not equal hence
null hypothesis is rejected.
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Ho : purpose of investment depends on
Annual income of investors.
Annual i ncome and pur pose of i nvestment

200000 above
income

100000-200000

bel ow 100000

bel ow 100000 100000-200000 200000 above

r eti r ement 0 1 1

f utur e conti ngence 2 9 2

tax benef i t 1 7 4

i ncome 1 4 2

savi ng 6 10 0

purpose
saving income tax benefit future contingence retirement
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cross tabulation of variables annual income and purpose of investments
the following was observed:
Chi square calculated = 9.9093
Degree of freedom =8
Chi square0.05 = 15.507 (here we take 5% level
of significance by
default)
As Chi square cal < Chi square0.05
Or
Z calculated = 0.579
Z table valve = 1.96
As Zcal <Z table valve
0.579<1.96
Therefore, H0 is accepted
That means that purpose of investment
always depends upon income of individual.
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