Investment is putting money into something with the expectation of profit. More specifically, investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, income (dividends), or appreciation (capital gains) of the value of the instrument. Saving and Investment are the key functions which affect the pace of growth of economy. The investment function depends upon the Income level, Saving rate, Awareness about the investment options and the risk taking ability of the investors. There has been a continuous change in the economic and business environment, leading to the emergence of new opportunities to the new entrants and to those already in the field. Investors give different preferences to identical investment alternatives and under the similar situation.
1. Investments in Bank Fixed Deposits (FD) Fixed Deposit or FD is accrues 8.5% of yearly profits, depending on the bank's tenure and guidelines, which makes it's widely sought after and safe investment alternative. The minimum tenure of FD is 15 days and maximum tenure is 5 years and above. Senior citizens are entitled for exclusive rate of interest on Fixed Deposits. 2. Investments in Insurance policies Insurance features among the best investment alternative as it offers services to indemnify your life, assets and money besides providing satisfactory and risk free profits. Indian Insurance Market offers various investment options with reasonably priced premium. Some of the popular Insurance policies in India are Home Insurance policies, Life Insurance policies, Health Insurance policies and Car Insurance policies. Some top Insurance firm in India under whom you can buy insurance scheme are LIC, SBI Life, ICICI Prudential, Bajaj Allianz, Birla Sunlife, HDFC Standard Life, Reliance Life, Max NewYork Life, Metlife, Tata AIG, Kotak Mahindra Life, ING Life Insurance, etc.
Gold bonds are not entitled of capital gains tax and wealth tariff. The sum insured can be accrued back in cash or gold. Moreover. healthcare etc. Investments in Public Provident Fund (PPF) Like NSC. mutual fund investment are also entitled for various market risks but with a fair share of profits. stock market to some extent cannot be considered as the safest investment options. Investments in Real Estate Indian real estate industry has huge prospects in sectors like commercial. Influenced by unanticipated turn of market events. as per the investor's preference. Investments in National Saving Certificate (NSC) National Saving Certificate (NSC) is subsidized and supported by government of India as is a secure investment technique with a lock in tenure of 6 years. hospitality. 8. Investments in Mutual Funds Mutual Fund firms accumulate cash from willing investors and invest it in share market. 4. Calculated realty demand for IT/ITES industry in 2010 is estimated at 150mn sq. 00. retail. Like stock market. 000 is required to be deposited in a fiscal year. PPF also falls under Section 80C of IT Act so investors could gain income tax deduction of up to Rs 1. The investor can deposit invest minimum of 200 gm in exchange for gold bonds holding a tariff free rate of interest of 3% . to accrue higher gains. Investments in Gold Deposit Scheme Controlled by SBI. 00.4% on the basis of the period of the bond varying with a lock in period of 3 to 7 years.3.000. The investor is entitled for the calculated interest of 8% which is forfeited two times in a year. firms and HUFs with no specific upper limit. Investments in Stock Market Investing in share market yields higher profits. 7. 6. An investment of minimum Rs 500 and maximum Rs 70. an investor must update himself on the recent stock market news and events. The prospective investor can create it PPF account in a GPO or head post office or in any sub-divisions of the centralized bank. There is no utmost limit in this investment option while the highest amount is estimated as Rs 100.ft. National Saving Certificate falls under Section 80C of IT Act and the profit accrued by the investor stands valid for tax deduction up to Rs 1. manufacturing. Gold Deposit Scheme was instigated in the year 1999. Investments in this scheme are open for trusts. However.000. housing. around the chief Indian
. The basic rate of interest in PPF is 8%. 5. The rate of interest of PPF is evaluated yearly with a lock in tenure of maximum 15 years. Public Provident Fund (PPF) is also supported by the Indian government.
10. Indian equities promise satisfactory returns and have more than 365 equity investments firms functioning under it. 9.cities. Termed as the "money making industry". The NRI investor can repatriate upto USD 1 million every year. by forfeiting valid tariffs. Investments in Equity Private Equity is expanding at a fast pace.5 billion in 2008 under equity shares and featured among the top 7 nations in the world. The interest returns accrued on in this account is entitled under IT Act and is subject to 30% tax reduction at source including the appropriate surcharge and education cess. The deposited amount along with the interest is completely repatriable. the total equity investment is predicted to increase upto USD 20 billion. realty sector of India promises annual profits of 30% to 100% through real estate investments. Investments in Non Resident Ordinary (NRO) funds Investing in domestic (NRO) is one of the best investment alternatives for NRIs who wish to deposit their income accrued abroad and maintain it in Indian rupees. In 2010. for genuine reasons. India acquired US $13. Investment can be done in Indian financial institutions including the Non Banking Finance Companies which are listed with RBI.
REVIW OF EXISTING LITERATURE
The review of previous studies provides an insight into the research dimensions. sought to investigate the relationships between stock markets and financial intermediaries. CORPORATE FINANCING PATTERN And Economic Growth in India”. The development of new theories. has focused on the globalization of financial institutions and capital markets.
. and policy makers to cope with the emerging situation for which a continuous assessment of existing performance and a careful prediction of future scenario of the market is must. and its component parts. concepts and approaches in the contemporary world of financial market has made it a necessity for stakeholders. The comprehensive analysis and understanding of the financial system. The study of Agarwal (1996) on “ CAPITAL MARKET DEVELOPMENT. investors . The study also sought to ascertain the relationship between the stock market development and the economic growth. ideas.
To ascertain the preference of investors toward different securities available in the market. to ascertain the size of investment and nature of investors involved in the stock market activities. 3. To identify the motives of buying or selling particular financial assets by the investors. 1.OBJECTIVES OF THE STUDY
The basic objective is to identify the investment behaviour of rural and urban investors.