A

SYNOPSIS REPORT
ON
A STUDY ON INVESTMENT VS. SAVINGS - RISKS AND
OPPORTUNITIES
AT
HDFC BANK LTD
Submitted
By
A. CHERISHMA
H.T.NO: 1302-20-672-167
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA’S PG COLLEGE
RAMANTHAPUR
(Affiliated to Osmania University)
2019-2021
 Aurora’s PG College (MCA), Ramanthapur
Department of Management

SYNOPSIS

Title of the Project : A STUDY ON INVESTMENT VS.

SAVINGS - RISKS AND OPPORTUNITIES

Student Name : A. CHERISHMA

Hall Ticket Number : 1302-20-672-167

Signature of the Student :

Signature of the Guide :

TABLE OF CONTENTS
 S. No. CHAPTER Page No

1.1 INTRODUCTION

1.2 NEED FOR THE STUDY

1.3 SCOPE OF THE STUDY

1.4 OBJECTIVES OF THE STUDY

1.5 RESEARCH METHODOLOGY

2.1 THEORITICAL REVIEW OF

LITERATIRE
2.2 ARTICLES

3.1 INDUSTRY PROFILE

3.2 COMPANY PROFILE

6 PROPOSED OUTCOMES

7 LIMITATIONS OF THE STUDY

8 CHAPTERISATION

10 BIBLIOGRAPHY

INTRODUCTION:

The difference between savings and investment is that saving is often deposited into a bank
savings account or a fixed deposit. On the other hand, investing involves buying assets such

as real estate, gold, stocks, or shares in mutual funds that have the potential to increase in

value over time.

Many investors, especially newbies don't understand that saving money and investing money

are two different things. They serve different purposes and play different roles in your

financial strategy. It is necessary to be clear with this fundamental concept before you begin

your journey to building wealth. A couple of common questions people have is what is

savings vs investment? When to invest, and when to save? The answer depends on what you

have planned for the future—and what you want to do with your money. This article will take

you through both the basics of savings and investments, the difference between savings and

investments, and its benefits.

Saving and investing are both important concepts for building a sound financial foundation,

but they’re not the same thing. While both can help you achieve a more comfortable financial

future, consumers need to know the differences and when it’s best to save and when it’s best

to invest.

The biggest difference between saving and investing is the level of risk taken. Saving

typically results in you earning a lower return but with virtually no risk. In contrast, investing

allows you the opportunity to earn a higher return, but you take on the risk of loss in order to

do so.

Here are the key differences between the two — and why you need both of these strategies to

help build long-term wealth.

Some of the difference between savings and investment are

 Objective: The objective behind saving and investing is the biggest difference between the

two. Savings are short-term and are used for emergencies and purchases, and can be done

without much research. Investments are made to achieve bigger goals like building wealth,

funding education, buying a house, etc. They often require long-term commitments and

market research.

 Protection against inflation: The value of cash in a saving account drops when inflation is on

the rise, but investments are excellent financial products to combat inflation.

 Returns: You usually earn a fixed and steady amount of interest on your savings.

Investments, on the other hand, have the potential to yield much higher returns.

 Risk: Savings usually have very low or negligible risk. Saving instruments like FDs, RDs and

savings bank accounts will always give you steady interest on them. But, investments carry

high risk as their value can fluctuate according to the market conditions and other economic

and financial factors.

 Liquidity: Savings instruments are usually high liquidity instruments. Therefore, they provide

you with immediate access to money as and when you need it. On the other hand,

investments usually offer low liquidity and hence financial experts recommend never to

invest your emergency funds.

NEED OF THE STUDY

Saving money refers to keeping money that you don’t spend. This money is usually used to

meet some specific financial goals you are hoping to accomplish soon, such as making

yourself less financially vulnerable in case of emergencies or saving for a huge purchase you

can’t afford to pay at once.

Investing refers to buying assets with the goal of earning more returns on your investment

and, ultimately, growing your wealth. But, when you invest money, you generally take a bit

of risk in exchange for a good return on your investments. Best investments are pegged by

some margin of safety, often in the form of assets. The best investment assets

are stocks, bonds, real estate, mutual funds, and others.

OBJECTIVE OF THE STUDY

The principal objectives of the study are:

 To understand the Investment Savings - risks and opportunities considerations of

investors

 To examine the investors awareness level and their preferences of Investment Savings

- risks and opportunities

 To compare the investment behavior of rural male and female investors

 To make some suggestions in order to enhance investment awareness among rural

people
SCOPE OF THE STUDY:

The study is confined to the rural investors of Telengana district in Hyderabad. The study

survey was conducted during 2017-21 with the help of a well structured questionnaire

consisting of relevant questions. The focus of the study was on understanding the preferences

of rural investors with regard to investment avenues, their educational qualifications and

investment awareness level.

RESEARCH METHODOLOGY

The study is both descriptive and analytical in nature. It is a blend of primary data and

secondary data. The primary data has been collected personally by approaching the online

share traders who are engaged in share market. The data are collected with a carefully

prepared questionnaire. The secondary data has been collected from the books, journals and

websites which deal with online share trading.

Source of data

Primary Sources: The primary data was collected through structured unbiased questionnaire

and personal interviews of investors. For this purpose questionnaire included were both open

ended & close ended & multiple-choice questions.

Secondary method: The secondary data collection method includes:

 Websites

 Journals

 Text books

Method Used For Analysis of Study

The methodology used for this purpose is Survey and Questionnaire Method. It is a time

consuming and expensive method and requires more administrative planning and supervision.

It is also subjective to interviewer bias or distortion.

Sample Size: 100 respondents

Sampling Unit: Businessmen, Government Servant, Retired Individuals

Statistical Tools: MS-excel and SPSS are used to analyze the data.
 REVIEW 1

Title :Investment vs. Savings - risks and opportunities Making and Risk

Author :Michi Nishihara 

Publication year :Pages 67-77 | Published online: 22 May 2015 

Abstract :

The aim of the paper is to present how investment decisions are made and what

investment risk is, what role it has in the investment decision. The decision itself is a

subjective act, but it is based on both subjective and objective factors. Risk is an

important component of every investment, thus it is necessary to analyse it as both, the

objective component of the investment, and as the subjective factor of the Investment vs.

Savings - risks and opportunitiesmaking.

REVIEW 2

Title :

Investment vs. Savings - risks and opportunitiesmaking from a constructivist

perspective

Author(s):

Carlo Massironi  (Studio MassironiConsulenzaFinanziaria, Garda, Italy)

Marco Guicciardi  (Department of Psychology, Cagliari University, Cagliari, Italy)

Abstract:Purpose– This paper aims to introduce the reader to investigate some aspects

of Investment vs. Savings - risks and opportunitiesmaking from a constructivist

perspective.Design/methodology/approach– The constructivist perspective is

introduced in its dual nature of epistemology and of modelization. From

constructivist epistemology, the paper mentions the corollaries of theoretical

pluralism and cognitive pragmatism. From Kruglanski and Ajzen's Lay epistemology

theory, the paper presents in more detail a constructivist modelization for the study

and improvement of formal processes of Investment vs. Savings - risks and

opportunitiesmaking.

Findings– Beginning from the proposed framework, the paper indicates the lines for

the development of a critical (or reflective) investment decision ‐making attitude. This

is an Investment vs. Savings - risks and opportunitiesmaking which is able to reflect

on its own constructs and cognitive processes in order to develop investment

processes with a higher “constructivist awareness” and efficacy.

Keywords-Investment vs. Savings - risks and

opportunitiesmaking, Constructivism, Lay epistemology theory, Asset

valuation, Value investing, Corporate investments, Decision making

REVIEW 3

Title :

Risk Analysis for Capital Investment Decisions

Author(s):

W.K.H. Fung, ,R.C. Stapleton

Abstract: There are two ways in which the risk of a capital project can be described.

This article outlines these two approaches: Sensitivity Analysis and Probability

Analysis, and emphasises the connection between the two methods. The output of a

computer model of the sensitivity of the project to underlying factors is used as input

for a probability analysis. The methods are illustrated with a case study, the MM Co

Ltd.
REVIEW 4

Title :

Optimal Investment vs. Savings - risks and opportunities under

regulatory and environmental risks

Author: Michi Nishihara 

Publication year :

Published online: 22 May 2015 

Abstract

This paper investigates the decision-making of a firm that has an option to invest from

among multiple alternative projects. This type of option is called a max-option, and the

nature of a max-option has been investigated in several papers. I extend the previous

analysis to a model that allows the random occurrence and disappearance of alternative

projects in which to invest. The occurrence and disappearance of investment opportunities

will be caused by changes in regulation, exits and entries of rival firms, technological

innovation, political risk, catastrophes, etc. By proving the properties of the options, this

paper suggests how a firm should deal with regulatory and environmental risks.

Specifically, I demonstrate that the prospective future occurrence of an alternative (e.g. as

a result of deregulation) has the significant effect of increasing the option value and

deferring the investment decision. The results help better understand investment decisions

with regulatory and environmental uncertainty.

Keywords: finance, investment analysis, decision analysis, real option, regulatory risk

REVIEW5

Title :Finance investments and Fund savings

Author :Aristis, Philip Resende,

Publication year :Nov2017, Vol. 31 Issue 6, p832-845. 14p. 5 Diagrams, 2 Charts.

Abstract:

Purpose: This contribution discusses the Finance-Investment and Saving-Funding

(FISF) circuit regarding the closed and open economies with government. Moreover, we

discuss the fiscal policy effects on aggregate demand and income in the FISF circuit

context. Keynes explained the FISF circuit assuming ashort-term capital advance closed

economy without government.

Findings: The novelty of the current contribution is to analyze the above mentioned

circuit in the closed and open economy context including government. We show that the

basic features of the FISF circuit remain unchanged for the closed and open economies

when government is considered in the circuit.

Originality:To achieve these goals, this contribution is organized as follows: in the next

section, the FISF circuit is highlighted for the closed and open economies without

government. In the third section, the FISF circuit mechanisms are explored in the context

of closed and open economies with government. Moreover, the government's role and the

fiscal policy impact on aggregate income are emphasized.

Keywords:Finance-Investment,FISF, short-term capital,initial capital, ex-

ante investment'
3.1 INTRODUCTION TO THE INDUSTRY

A bank is a financial institution that accepts deposits and channels those deposits into lending

activities. Banks primarily provide financial services to customers while enriching investors.

Government restrictions on financial activities by banks vary over time and location. Banks are

important players in financial markets and offer services such as investment funds and loans. In some

countries such as Germany, banks have historically owned major stakes in industrial corporations

while in other countries such as the United States banks are prohibited from owning non-financial

companies. In Japan, banks are usually the nexus of a cross-share holding entity known as the

keiretsu. In France, bancassurance is prevalent, as most banks offer insurance services (and now real

estate services) to their clients.

Introduction

India’s banking sector is constantly growing. Since the turn of the century, there has been a noticeable

upsurge in transactions through ATMs, and also internet and mobile banking.

Following the passing of the Banking Laws (Amendment) Bill by the Indian Parliament in 2012, the

landscape of the banking industry began to change. The bill allows the Reserve Bank of India (RBI)

to make final guidelines on issuing new licenses, which could lead to a bigger number of banks in the

country. Some banks have already received licences from the government, and the RBI's new norms

will provide incentives to banks to spot bad loans and take requisite action to keep rogue borrowers in

check.

Over the next decade, the banking sector is projected to create up to two million new jobs, driven by

the efforts of the RBI and the Government of India to integrate financial services into rural areas.

Also, the traditional way of operations will slowly give way to modern technology.
 3.2COMPANY PROFILE
HDFC Bank Ltd is a major Indian financial services company based in Mumbai. The Bank is a

publicly held banking company engaged in providing a wide range of banking and financial services

including commercial banking and treasury operations. The Bank at present has an enviable network

of 2201 branches and 7110 ATMs spread in 996 cities across India. They also have one overseas

wholesale banking branch in Bahrain, a branch in Hong Kong and two representative offices in UAE

and Kenya. The Bank has two subsidiary companies, namely HDFC Securities Ltd and HDB

Financial Services Ltd. The Bank has three primary business segments, namely banking, wholesale

banking and treasury. The retail banking segment serves retail customers through a branch network

and other delivery channels. This segment raises deposits from customers and makes loans and

provides other services with the help of specialist product groups to such customers. The wholesale

banking segment provides loans, non-fund facilities and transaction services to corporate, public

sector units, government bodies, financial institutions and medium-scale enterprises. The treasury

segment includes net interest earnings on investments portfolio of the Bank. The Bank's ATM

network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro,

Plus/Cirrus and American Express Credit/Charge cardholders. The Bank's shares are listed on the

Bombay Stock Exchange Limited and The National Stock Exchange of India Ltd. The Bank's

American Depository Shares (ADS) are listed on the New York Stock Exchange (NYSE) and the

Bank's Global Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange.

HDFC Bank Ltd Was incorporated on August 30, 2094 by Housing Development

Finance Corporation Ltd. In the year 2094, Housing Development Finance Corporation Ltd was

amongst the first to receive an 'in principle' approval from the Reserve Bank of India to set up a bank

in the private sector, as part of the RBI's liberalization of the Indian Banking Industry. HDFC Bank

commenced operations as a Scheduled Commercial.

PROPOSED OUT COMES

When you have an extra amount, you can save it for a rainy day, or invest it for the

future. But savings vs investment, the choice is highly subjective. We all have goals

that we would like to attain by a specific time in our lives, but what can we attain

with a savings account that gives us little or nothing annually?

Though risky, investing has a higher potential for growth. When compared to a

savings account, investing generates more income on your capital annually.

Understanding the various types of investments and how they work is essential if you

want to be successful when reaping your financial rewards. We all want our hard-

earned money to work for us, and this simply means that we want to see our capital

generate more money. Investing does just that.

Finding financial independence is vital because it can save you from a lot of

heartache and stress. So what are you doing to secure yourself financially? Are you

saving money or investing?

LIMITATION

The study was confined to a small sample of investors from telengana state. The study

discussed about the investment preferences of rural investors and considerations for

investing their money. A few respondents were reluctant to share their views on investment

decisions. The study focused on awareness level of rural investors and their preferences only.

Further research can be undertaken for investigating determinants of investment decisions,

risk tolerance level of rural investors. The study can be conducted specially on rural poor

households’ pattern of saving and investment.

 BIBLIOGRAPHY

BOOKS

1. Pandey, I.M. (1981) Financial Management. 2nd Revised Edition, Rashtravani Printers, New Delhi.
2.Awomewe, A.F. and Ogundele, O.O. (2010) The Importance of the Payback Method in Investing
Decision. Blekinge Institute of Technology, Blekinge. (Unpublished Work)
3.Brigham, E.F. (1992) Management Theory and Practice. 5th Edition, The Dryden Press, New York
.4.Wadee, N. (2012) Decision Management : Theory and Application. New York Institute of
Technology, Center for Entrepreneurial Studies, New York.
5.Stein, J.C. (2003) Agency, Information and Corporate Investment. In: George, M., Constantinides,
M.H. and Stultz, R.M., Eds., Handbook of the Economics of Finance, Elsevier North-Holland,
Amsterdam, 131-183.
6. Parker, J. (2012) Theories of Investment Expenditures. Economies 318 Course Book Chapter 19, 2.
2, JOURNALS

MAGAZINE:

Business world

Business Today

Emerald Group Publishing Limited 2013

MCB UP Limited 1980

NEWSPAPERS :

business line

Financial express

3, WEBSITES:

www.bseindia.com

www.mutualfundsindia.com

www.crisil.com

www.licofindia.com

www.ICICI BANK LTD.com