Created by L&D

Understanding Investments

Basic Knowledge of Financial Product

Taxation

Q&A
Investment is a instrument which helps in grow money & it
also helps you to fulfil your certain desires of your life.

Types of Investment Instrument

- Fixed Income Schemes like FD , Bonds etc
- Life Insurance
- Direct Equity
- Mutual Funds
- Real Estate
- Gold
- Fixed Income
- Commodity
- Forex
IDENTIFY THE PURPOSE OF TIME HORIZON OF THE
INVESTMENT INVESTMENT
Inflation: The rate at which the general level of prices for goods and services
is rising, and, subsequently, purchasing power is falling

For E.g.; When McDonald launched its McAloo Burger it

was at Rs.20, now because of inflation (Due to rise in price
of potato, transportation cost, etc.) the same burger now
costs Rs.30 (including taxes).

So,Inflation rate is 30-20/20*100=

50%.
Inflation
Average CPI has been 8.17% in last 37 years How inflation is eating your money!
1980
Rs. 100,000
1995
Rs. 25,571

2010
Rs. 7,120

2016

Rs. 4,270

Reduced Value of Money @ 8.17%

average rate of inflation

Source: http://www.inflation.eu/inflation-rates/india/historic-inflation/cpi-inflation-india.aspx
Money in savings account + 100000
Interest earned in 1 year (@3.5 per + 3500
annum)
103500
Tax on Interest (@30.9%) - 1081
Impact of Inflation (@5% per annum) - 5000

Value at the end of year 1 97418

Mutual fund is an investment vehicle
that pools the money of many investors
who share a common financial goal
and invests them in a diversified portfolio of
securities
 Passed
Pool their
back to
money with

Investors

Income/Dividend/ Fund
Total Return Manager

Stock Market
generates Debt market Invests in
Money Market
Video
 Broad Mutual Fund Types

Open Ended Closed Ended

Equity Debt Equity Debt

Aggressive Monthly
ELSS Funds CPOF
Growth Funds Income Plan

Growth Funds
Liquid Funds FMP
Diversified
Equity Fund Short Term
Debt Funds

Balanced Fund
 Parameter PPF Bank FD Equity MF Schemes
Returns 8% 6.5 to 7% 12-15%
Interest Receipt On Maturity On Maturity Depends on Performance
Tenure 15 Yrs 7 -10 yrs No Specified Term
Partial Withdrawal No No Yes
Long term Tax Liability No Yes No
Minimum Rs 500 p.a. Rs 10000 Rs 5000
Investment
Maximum Rs 1,50,000 No Upper Limit No Upper Limit
Investment
Monthly Investments N.A N.A. Rs 500
Lock In Period Default 15 yrs Depends on Term of Deposit No Lock-in Period
 Particulars Bank RD MF SIPs
Money Savings Per Month 10000 10000

Interest Period in Years 10 10

Returns Expected p.a 6.5% 12%

Maturity Value 16,93,153 23,00,387

Total Amount Invested 12,00,000 12,00,000
Total Gain 4,93,153 11,00,386

Tax on Interest (@30.9% on FD & 10% in MF 1,47,946 100039

exceeding 1lac profit in equity)
Post Tax Return in Hands of Investor After 10yrs 15,45,207 22,00,348

Investment in MF SIP is giving extra benefit for Rs.6,55,141 !!!

Insurance is a means of protection
from financial loss. It is a form of risk
management, primarily used
to hedge against the risk of a
contingent or uncertain loss.
Human Life is priceless...and It is also an INCOME GENERATING
ASSET

Risk For Human Being

Dying too
Living too
Early
Long

Financial Loss
 Life Insurance Products

Traditional Plan Unit Linked Insurance Plan

Investments are
Pure Endowment Term Plan(Risk made in equities,
Management Scheme) debts & money
market instruments

Benefit paid in case Benefit paid only in

of Death /survival case of death during
during the term the term
Proposal form Initial step(application) to initiate the contract

Proposer The person who applies for the insurance contract

Life Insured The person who is covered in the insurance contract

Sum Assured The risk cover amount promised by the insurer

Premium The money paid as consideration for a specified Sum Assured

Policy term The duration of the insurance contract

Maturity value The amount received at the end of policy term

Premium The number of years premium is to be paid. Can be less than or

paying term equal to Benefit Period

Surrender value The amount received if policy is closed before the end of policy
term
As risk cover As Investment

As Tax Planning
An investment that provides a return in the form of fixed
periodic payments and the eventual return of principal at
maturity is said to be Fixed Income.

For e.g.
A invests Rs. 1,00,000/- for 3 years @ 10% p.a payable
annually. Then his yearly interest will be Rs. 10,000/- and
maturity amount will be Rs. 1,00,000/-

In above example, the Interest payments and Maturity

amount is Fixed.
Company National Non
Fixed Bonds Pension Convertible
Deposits System (NPS) Debenture

Capital Gain Tax Free

GOI Bonds
Bonds Bonds
 Non Cumulative

• Interest Calculated – Simple

• Interest Payable – Monthly, Qtlry , Half Yearly
• Maturity Value : Only Principle
• Taxation – Interest Taxable and Added in
Types of Fixed Income

Deposits Cumulative

• Interest Calculated – Compounding

• Interest Compounding – Monthly, Qtlry , Half
Yearly
• Maturity Value : Principle & Interest
• Taxation – Interest Taxable and Added in
Income
 General Insurance

Fire Marine Miscellaneous

dealing with transport dealing with all other like

dealing with fire related
related risk & ships motor, liability, Medical
risks
etc