FAMILY BUDGETING

SAVINGS &
SMART INVESTMENTS
Aga Khan Economic Planning Board Presenter
(AKEPB) Hamza Karim
Central Region Member of AKEPB
Savings and Investments
 WHAT IS SAVING AND
INVESTMENT?
Saving
Savings refers to the amount
left over after an individual's
consumer spending is
subtracted from the amount of
disposable income earned in a
given period of time. Savings
can be used to increase income
through investing.
Investment
The act of purchasing those goods
which produce further goods or
which produce further income is
called investment.
Investment consist of new
machines, new plants, new roads
and new power house of raw
material or shares of some new
firms
WHO IS INVESTOR?
A person or organization that
puts money into financial
schemes, property, etc. with the
expectation of achieving a profit

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 TYPES OF INVESTORS

The Safe Players The Moderators The Adventurers

- Stays away from prospects - Are usually disposed - Adventurers don’t mind
of high risks towards taking a taking big risks with their
- Investment goals usually moderate amount of risk capital because they realize
include meeting their - Low returns don’t attract that risks often pay off well
expected liquidity needs in them much and they don’t - Usually invest in Equity
the near future or short term have the appetite to take Funds which yield returns
goals adventurous risks in life in the longer run
such as purchases / - Moderates in Pakistan -They also invest in
vacations/ tuitions tend to invest in Gold, currency like US Dollar
Saving Accounts or which has the tendency to
- Investments Includes earn high profits when
Local Committees, Bonds Saving Certificates in
their values rise
etc banks
The Risk-Reward Spectrum

Aggressive
Moderate
- High risk adjusted
returns
- Medium term view
- High duration and
- Predictable higher sensitivity to
Inflow / Outflow market movements
Conservative
equation
- Long term view
- Cash - Inflation-beating
management returns
- Low risk
- Near term
liquidity needs
 TYPES OF INVESTMENTS

Stocks Fixed Income/Bonds Gold

Mutual
Mutual Funds
Direct (Income/ National Commodit
Funds Physical
Investmen Banks Saving y
(Stock Money Gold
t Certificate Exchange
Funds) Market
Funds)
Conservative/Low Risk Investment
Options

1.National Saving Schemes (NSS)

2.Bank Deposits

3.Money Market/Income Funds

 Moderate/Risky Investment Options

1.Stock Market

2.Equity Funds

3.Commodities
 1. NATIONAL SAVING SCHEME
DEFENCE Saving Special Saving BEHBOOD
Certificates Certificates Saving Certificates

Maturity period 10 years 3 years 10 years

Profit rate (Subject to change) 10.68% 11.80% 12.48%
Minimum investment 500 500 5,000
Tax rate 10% 10% Exempt
Reinvestment No Yes No
Profit payment After 1 year After 6 months Monthly
Eligible investors Everyone Everyone Widows and senior citizen
aged over 60

• The above rates are subject to variation.

• Tax and Zakat is deducted at the time of payment
• Source: savings.gov.pk
2. BANK DEPOSITS (FIXED DEPOSIT)
Returns are good but should be kept in the bank account for respective
time period.
Minimum investment amount is too big for a retail investor.
Principal withdrawal prior to investment period is penalized.
Profit is taxed @ 10% WHT.
 3. MONEY MARKET/INCOME FUNDS

Given back to
Pool their Investment
Money Market Investors with

the trade in
short-term loans
between banks Mutual
Profit
and other Funds

financial
Invest in
institutions Generates
Investmen
t in
Different
Assets
3. MONEY MARKET/INCOME FUNDS

Pool of money
from many
people

Tax exempt if
held for more Investment &
than one year Redemption
any time

Mutual
Funds
Minimum Professional
Investment of Management
Rs. 5000/- of your
and money
subsequent irrespective of
investment of the amount
Rs. 1000/- invested
Give your money to experts who will
invest your saving (big or small)
Q AND A
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