SUMMER INTERNSHIP PROJECT

A REPORT ON
CUSTOMER PERCEPTION AND AWARENESS LEVEL ABOUT VAARIOUS FINANCIAL INSTRUMENTS

BY SUMIT KUMAR BATCH 2010 MBA III SEM.

KARVY STOCK BROKING LTD. MOHALI

ACKNOWLEDGEMENT
It is my privilege to express my deep sense of gratitude and indebtedness to Prof. Uttam Shukla, RPEC Sec 78 Mohali for allowing me to undergo training at Karvy Stock Broking Company, Mohali, and Punjab and for helping me finding the solution to my problems. I heart fully thank my company guide Mr. Mukesh Goyal for his expert and inspiring guidance, constructive criticism and constant encouragement. I would also like to thanks all staff members of Karvy Stock Broking Company and all others who took keen interest and helped me at any step of my work in this project.

ABSTRACT
My project customer perception and awareness level about various financial instruments

provided by various financial companies to their customer like stock broking, mutual fund, insurance, IPOs, and various financial services For the deep inclination in to the management concepts practical work is important aspect. Theoretical knowledge gives us the fundamental concepts of management and practical work teaches us these tact and skills which are successfully employed to capture todays competitive market. The main objective of dissertation and project is familiarization with the necessary theoretical inputs and to gain sufficient practical exposure to establish distant linkage between the conceptual knowledge to practical situation. Practical work thus play an important role in developing and sharpening ones skill in the field of business and

management and administration. During my tenure of dissertation, I will study the customer perception and awareness level about various financial instruments.

There are numbers of types of customer who invest in these financial instruments, in which some have knowledge about these financial product and some have not. So the study should be conduct to determine the saving behaviors of customer and their perception about various financial products. Investment is the employment of funds with the aim of achieving additional income or growth in value. The essential quality of an investment is that it involves waiting for a reward . it involves the commitment of resource that have been saved or put away from consumption in hope that some benefit will accrues in future. There are customer who looks for normal returns with minimum risk and there are customer who look for maximum return without taking care of the risk involved in it. The financial advisor should take care of the requirement of the customer. There are high levels, middle level, and low level customers. These can be categories with their income level. The requirement of high level customers may be for longer period. They looking for the long investment but the middle level and low level customer may not go for the long term investment.They investment for the purpose of saving. There can be several customer who will invest for saving the tax so they invest in that scheme which will provide these types of benefits. So they way of approaching different type of customer is different. This is totally depending upon their requirements. So before approaching to any customer, we should be well prepared with all kinds queries related to the product and this can be done by knowing customer perception and awareness level about various financial products.

In the old days investment options were fewer and the market risk were limited. The limitation was a result of the predominant role and responsibility assumed by the state in presiding our financial future. In that present times all that is changing and changing rapidly. Not only are investment options increasing, the complexity is increasing as market forces come in to fuller play. The market is bound more complex and investment advice for financial planning saving will emerge as a professional activity. A descriptive research has been conducting for the purpose of this study. Both primary and secondary data has been used for the purpose of data collection. Primary data has been collected by structured questionnaire. Secondary data has been collected by using secondary source of information like data records and company brochures.

INTRODUCTION OF THE

PROJECT

INTRODUCTION
PURPOSE OF THE STUDY :The purpose of the study is to determine the saving behaviour and investment preferences of customer. Customer perception report will provide a way to accurately measure how customers think about company, product and services provided by the company. Todays trying economic conditions have forced difficult decisions on companies. Most are making conservative decisions that reflect a survival mode in business operations. during these difficult times, understanding what customer think on an ongoing basis is critical for survival. Management needs ongoing feedback from customer, partners, and employees in order to continue to successfully innovate and grow. For this report, customer perception and awareness level will be measured in many important areas like

a) Do they know about the various financial instrument or not. b) What are the factors which a customer consider while investing in any Financial
Instrument.

c) How they get information regarding any financial instrument. d) On what basis they will invest in any particular financial Instrument. e) How long they prefer to keep their money in any financial instrument. f) How much of their money they invest in any financial instrument. g) How much return they expect from any financial instrument. h) Are they satisfied with their investment decision or not.

SCOPE OF THE STUDY :The scope of any study should be to cover large population as possible to cover with out any errors. But due to time and money constraints, this study is limited to small region only.

LIMITATIONS OF THE STUDY :-

The project is based upon various financial instrument provided by various company to their customer and the perception and awareness level of the customer about these financial instrument. For which there will be the need of information from

the customer about their knowledge for these financial instrument. The various limitations of this study will be a) Total numbers of financial instrument in the market is so large that it needs lot of resource to analyze them all. There are various companies providing various financial instrument like Mutual fund, Insurance, IPOs. b) As the project is also based on secondary data, possibilities of unauthenticated information can be avoided. c) People some time hesitate to provide complete information about self behavior. d) Due to time and money constraints study will conducted in only selected area. and saving

SOURCES AND METHOD :The whole study is based upon primary and secondary data. Therefore, information will be collected from various companies websites and by filing questionnaire from various customers.

a) DATA COLLECTION :Data collection is collected with the help of questionnaire, which will fill by customer.

I) Primary method :-

The primary data is collected with the help of questionnaire, which will fill by customers during the period of survey.

II) Secondary method :This data will be collected from different company websites and through internet.

b) SAMPLE DESIGN :This sample design is a definite plan for obtaining a sample from given population. It mainly refers to the technique and the procedure which I have adopted in selecting item from sampling. Sample design is determined before the data are collected but I have chosen sampling unit design.

c) SAMPLING UNIT :A decision has to be taken concerning a sampling unit before selecting sample. Sampling unit may be geographical one such as a state, distt, village etc. But for my project sampling unit will be INDIVIDUAL INVESTOR.

VALUE ADDITION TO THE COMPANY :This report will help companies to strengthen customer intimacy. The report on customer perception and awareness level about various financial instruments will help the company in many areas like 1. It will help to understand the expectations of financial performance . 2. It will provide fresh insights which can help their business to continue to flourish. 3. The company can understand the problem areas. 4. The company can evaluate new services initiatives. 5. The company can set and monitor performance targets. 6. The study will help in gaining a better understanding of what the investor looks for in an investment options. 7. It can used by financial sector in designing better financial instrument customized to suit the needs f the investor. This report will develop in order to empower companies with detailed primary market research needed to make well infrmed decisions and it will provide independent with their the customer from the perspective of

measurement and validations of the health of a companys relationship

customers. These are various advantages which will give some value addition to the company in understanding the customer perception and awareness level about various financial instruments.

INTRODUCTION OF THE ORGANISATION

INTRODUCTION
ABOUT KARVY STOCK BROKING LTD.:KARVY, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investor in various capacities, and provides investor services to over 300 corporate, comprising the who is who corporate India. KARVY covers the entire spectrum of financial services such as stock broking, depository participants, distribution of financial products- mutual fund, bonds, fixed deposits, equities, insurance, commodities broking, personal finance advisory services, and

corporate finance, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments.

Organization
Karvy was started by a group of five chartered accountants in 1979 and the name KARVY has been derived from the first letter of their names K - KUTUMB RAO A - AJAY KUMAR R - RAMAKRISHNA V VAIDYANATHAN Y YUGANDHAR The partner decided to offer, other than audit services, value added services like corporate advisory services to their clients. The first firm in the group, karvy consultants limited was incorporated on 23rd July 1983. In a very short period it become the largest registrar and transfer agent in India. This business was spun off to from a separate joint venture with Computershare of Australia in 2005. Karvys foray into stock broking began with market IPOS in 1993. Within a few years, karvy began topping the IPO procurement league tables and it has consistently maintained its top position the top 5. Karvy was among the first few member of national stock exchange in 1994 and become a member of the stock exchange, Mumbai in 2001.

While the registry business is a 50:50 joint venture with Computershare of Australia, we have equity participation by ICICI venture and limited and Barings Asia limited, in Karvy stock broking limited. Karvy has always believed in adding value to services it offers to client, a top notch research team based in Mumbai and Hyderabad supports its employees to advise client on their investment needs with the information overload today, karvys team of analyst help make the right calls, be it equities, MF, insurance.

SERVICES PROVIDED BY KARVY: Commodities trading Personal finance advisory Corporate finance Depository participants services Financial product distribution (Investment/loan products) Mutual fund services

 Stock broking (NSE, BSE, F&O) Insurance (life and general) Registrar and transfer agents

KARVY GROUP OF COMPANIES: KARVY CONSULTANTS LIMITED KARVY STOCK BROKING LIMITED KARVY INVESTOR SERVICES LIMITED KARVY COMPUTER SHARE PVT. LTD. MUTUAL FUND SERVICES

ISSUE REGISTRARY KARVY GLOBAL SERVICES LIMITED KARVY INSURANCE BROKING PVT. LTD. KARVY COMMODITIES BROKING PVT. LTD.

CLASSIFICATION OF FINANCIAL

INSTRUMENT

CLASSIFICATION OF FINANCIALINSTRUMENT MUTUAL FUND

MUTUAL FUND CONCEPTS:A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money

thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.

The flow chart below describes broadly the working of a mutual fund:

Mutual Fund Operation Flow Chart

ADVANTAGES OF MUTUAL FUND:a) Professional Management :Fund manager undergoes through various research

works and has better investment management skills which ensure higher returns to the investor than what he can manage on his own.

b) Diversification:-

By owing shares in a mutual fund instead of owing individual

stock or bonds, your risk is spread out. c) Liquidity :An investor may not be able to sell some of the shares held by him very

easily and quickly, whereas units of a mutual fund are far more liquid. d) Choice of Schemes :Mutual funds provide investors with various schemes with

different investment objectives. Investors have the option of investing in a scheme having a correlation between its investment objectives and their own financial goals. These schemes further have different plans/options e) Flexibility :Investors also benefit from the convenience and flexibility offered by

Mutual Funds. Investors can switch their holdings from a debt scheme to an equity scheme and vice-versa. Option of systematic (at regular intervals) investment and withdrawal is also offered to the investors in most open-end schemes.

f) Safety :-

Mutual Fund industry is part of a well-regulated investment environment

where the interests of the investors are protected by the regulator. All funds are registered with SEBI and complete transparency is forced.

DISADVANTAGES OF MUTUAL FUND:a) Costs Control Not in the Hands of an Investor :Investor has to pay investment management fees and fund distribution costs as a percentage of the value of his investments (as long as he holds the units), irrespective of the performance of the fund.

b) Dilution :-

Because funds have small holdings in so many companies, high returns

from a few investment often dont make much difference on the overall return.

c) Proffesional management :- management is by no means infallible, and, even if the fund loses money, the manager still takes his/her cut.

TYPES OF MUTUAL FUND SCHEMES :Wide variety of mutual funds schemes exists to cater the needs such as financial position, risk tolerance and return expectations etc. The table below gives an overview in to the existing types of schemes.

MUTUAL FUND SCHEMES: By Structure Open Ended Schemes Close Ended Schemes Interval Schemes

By Investment Objectives Growth Schemes Income Schemes Balance Schemes Money Market Schemes

Other Schemes Tax Saving Schemes

Special Schemes Index Schemes Sector Specific Schemes

Frequently Used Terms in mutual fund:a) Net asset value :Net Asset Value is the market value of the assets of the scheme

minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.

b) Sale price:- Is the price you pay when you invest in a scheme. Offer Price. It may include a sales load.

Also called

c) Repurchase Price :-

Is the price at which a close-ended scheme repurchases its

units and it may include a back-end load. This is also called Bid Price.

d) Redemption Price :- Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related. e) Sales Load :Is a charge collected by a scheme when it sells the units. Also called, Front-end load. Schemes that do not charge a load are called No Load schemes. f) Repurchase or back end load :Is a charge collected by a scheme when it buys back the units from the unit holders.

INSURANCE
People need life insurance in the first place. An insurance policy is primarily meant to protect the income of the familys breadwinners. The idea is if anyone or both die, their dependents continue to live comfortable. The circle of life begins at birth, followed by education, marriage and eventually, after a lifetime of work, we look forward to a life of retirement .Our finances too tend to change as we go through phases of our life. In the first twenty years of our life, we are financially and emotionally dependent on our parents and there are no financial commitments to be met. In the next twenty years, we gain financial independence and provide for our families. This is also the stage when our incomes may be unable to meet the growing expenses of young household. In following twenty years, as our children grow and become financially independent, we see our saving grow, a nest egg put away for life after retirement.

Definition:Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange for consideration known as premium and promises to pay a fixed sum of money to the other party on happening of an uncertain event (death) or after the expiry of a certain period.The party bearing the risk is known as the 'insurer' or 'assurer' and the party whose risk is covered is known as the 'insured' or 'assured'.

Insurance is a provision for the distribution of risks; that is to say, it is a financial provision against loss from unavoidable disasters. The protection which affords takes the form of guaranty to indemnify the insured if certain specified losses occur. The principle of

insurance, so far as the undertaking of the obligation is concerned, is that for the payment of a certain sum the guarantee will be given to reimburse the insured. The insurer, in accepting risk, so distributes them that the sum total of all the amounts paid for this insurance protection will be sufficient to meet the losses that occur. Insurance then, indicates divided responsibility. This principle is introduced in most stores where a division is made between the sales clerk and the cashiers department, the arrangement dividing the risk of loss. The insurance principle is similarly applied in many other cases of divided responsibility. Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a large, possibly devastating loss. The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated.

Types of life insurance :

Term insurance plan :- A term insurance policy is a pure risk cover for a
specified period of time. What this means is that the sum assured is payable only if the policyholder dies within the policy term. For instance, if a person buys Rs 2 lakh policy for 15-years, his family is entitled to the money if he dies within that 15-year period.

Whole life plan :- As the name suggests, a Whole Life Policy is an insurance cover
against death, irrespective of when it happens. Under this plan, the policyholder pays regular premiums until his death, following

which the money is handed over to his family. This policy, however, fails to address the additional needs of the insured during his postretirement years. It doesn't take into account a person's increasing needs either. While the insured buys the policy at a young age, his requirements increase over time. By the time he dies, the value of the sum assured is too low to meet his family's needs. As a result of these drawbacks, insurance firms now offer either a modified Whole Life Policy or combine in with another type of policy

Endowment plan:- Combining risk cover with financial savings, endowment

policies is the most popular policies in the world of life insurance.

In an Endowment Policy, the sum assured is payable even if the insured survives the policy term.

If the insured dies during the tenure of the policy, the insurance firm has to pay the sum assured just as any other pure risk cover.

A pure endowment policy is also a form of financial saving, whereby if the person covered remains alive beyond the tenure of the policy, he gets back the sum assured with some other investment benefits.

In addition to the basic policy, insurers offer various benefits such as double endowment and marriage/ education endowment plans. The cost of such a policy is slightly higher but worth its value.

Single premium plan:- Single premium plan are investment plans offered by a
life insurance company. The insurance company generally pays a guaranteed interest rate on the single premium investment. Returns from single premium plans ate tax free in the hands of customer.

Money back policy :- Money Back Policy is to provide money on the occasions when
the policy holder needs for his personal life. The occasions may be marriage, education, etc. Money will be paid back to the policy holder with the specified duration. If the polciy holder dies before the policy term, the sum assured will be given to his family. A portion of the sum assured is payable at regular intervals. On survival the remainder of the sum assured is payable.

INSURANCE COMPANIES :-

With the rapid growth of the Indian Insurance industry, in particularly serving a Middle Class that is growing on both size and wealth every year, it is hardly surprisng that Indian insurance companies are growing, and playing an increasingly important role in the nation's financial services industry. This increasing market is creating considerable competition among Indian insurance companies in an industry that 20 years ago was relatively small. To date, India's Insurance Regulatory and Development Authority (IRDA), has granted registration to 12 private life insurance companies and 9 general insurance companies. Counting the existing public sector insurance companies, there are currently 13 Indian insurance companies in the life side and 13 Indian insurance companies operating in general insurance.

LIFE INSURERS
Public Sector Private Sector Life Insurance Corporation of India Allianz Bajaj Life Insurance Company limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited

Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited

GENERAL INSURERS
Public sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited Private Sector Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd.

REINSURER

General Insurance Corporation of India

SHARES

About shares:At the most basic level, stock(often reffered to as shares) is ownership , or equity, in a company. Investor buy stock in the form of shares, which represents a portion of a companys assets(capital) and earnings(dividend). As a shareholder, the extent of your ownership in a company depends on the number of shares you own in relation to the total number of shares available .For example, if you buy 1000 shares of stock in a company that has issued a total of 100,000 shares, you own one per unit percent of the company. While one per cent seems like a small holding, very few private investor are able to accumulate a shareholding of that size in publicly quoted companies, many of which have a market value running in to billions of pound. Your stake may authorize you to vote at the company annual meeting, where shareholders usually receive one vote per share. In theory, every stock holder, no matter how small their stake, can exercise some influence over company management at the annual general meeting. In reality, however, most private investors stakes are insignificant. Management policy is far more likely to be influenced by the votes of large institutional investors such as pension funds.

a)Stock symbols :-

A stock symbols, or epic symbol is the standard abbreviation of a stocks name. you can find stock symbols wherever stock performance information is published- for example, newspaper stock listing and investment websites. Company names also have abbreviations called ticker symbols. However, its worth remembering that these may vary at the different exchanges where the company is quoted.

b) PERFORMANCE INDICATORS:-

Here is the list of the standard performance indicators: Performance indicator Closing price High and low definition the last price at which the stock was bought or sold the highest and the lowest price of the stock from the previous trading day. 52 week range Volume Net change the highest and lowest price over the previous 52 weeks the amount of shares traded during the previous trading day. the difference between the closing price on the last trading day and the closing price on the trading day prior to the last

The stock exchange :A stock exchange is an organization that provides a marketplace in which investor and borrower trade stock. It also set rules and regulations to ensure that the stock market operates efficiently and fairly for all parties involved. It is a common platform where buyers and sellers come together to transact in stocks and shares. It may be a physical entity where brokers trade on a physical trading floor via an "open outcry" system or a virtual environment. A stock exchange is an entity which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.

Electronic Trading :- Electronic trading eliminates the need for physical trading
floors. Brokers can trade from their offices, using fully automated screen-based processes. Their workstations are connected to a Stock Exchange's central computer via satellite using Very Small Aperture Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer and are matched electronically.

Index :- An Index is a comprehensive measure of market trends, intended for investors

who are concerned with general stock market price movements. An Index comprises stocks that have large liquidity and market capitalisation. Each stock is given a weightage in the Index equivalent to its market capitalisation. At the NSE, the capitalisation of NIFTY (fifty selected stocks) is taken as a base capitalisation, with the value set at 1000. Similarly, BSE Sensitive Index or Sensex comprises 30 selected stocks. The Index value compares the day's market capitalisation vis-a-vis base capitalisation and indicates how prices in general have moved over a period of time.

Stock :- The word stock simply refers to a supply. You may have a stock of T- shirts in
your closet, or a stock of pencils in your desk. In the financial market, stock refers to a supply of money that a company has raised. This supply comes from people who have given the company money in the hope that the company will make their money grow.

POST OFFICE DEPOSITS

A post office is a facility authorised by a postal system for the posting, receipt, sorting, handling, transmission or delivery of mail.[1] Post offices offer mail-related services such as post office boxes, postage and packaging supplies. In addition, some post offices offer nonpostal services such as passport applications and other government forms, car tax purchase, money orders, and banking services. The back rooms of a post office are where mail is processed for delivery. Mail may also be processed in other post offices that are not open to the general public. You can request copies of your old mail from major post offices only. Small town offices usually do not keep copies A Post-Office Recurring Deposit Account (RDA) is a banking service offered by Department of post, Government of India at all post office counters in the country. The scheme is meant for investors who want to deposit a fixed amount every month, in order to get a lump sum after five years. The scheme, a systematic way for long term savings, is one of the best investment option for the low income groups.

Features
The minimum investment in a post-office RDA is Rs 10 and then in multiples of Rs. 5/- for

a period of 5 years. There is no prescribed upper limit on your investment. The deposit shall be paid as monthly installments and each subsequent monthly installment shall be made before the end of the calendar month and shall be equal to the first deposit. In case of default in payment, a default fee is chargeable for delayed deposit at 0.20 Paise per month of delay, for Rs.10 Denomination. After more than four defaults, the account shall be treated as discontinued in case the account is not revived within two months from the fifth default. For Advance deposits for 6 months or 12 months, a rebate is allowed at the prescribed rate (For Rs 10 denomination:- Rs.1/- for 6 advance deposits, Rs.4/- for 12 advance deposits. One withdrawal is allowed after one year of opening a post-office RDA on meeting certain conditions. You can withdraw up to half the balance lying to your credit at an interest charged at 15%. The withdrawal or the loan may be repaid in one lump or in equal monthly installments. Premature closure is allowed on completion of three years from the date of opening and in such case, interest is payable as per the rate applicable for the Post Office Savings Bank Account. After maturity of the account, it can be continued for a further period of 5 years with or without further deposits. During this extended period, the account can be closed at any time.

Advantages
The post office offers a fixed rate of interest unlike banks which constantly change their recurring deposit interest rates depending on their demand supply position. As the post office is a department of the government of India, it is a safe investment. The principal amount in the Recurring Deposit Account is assured. Moreover Interest earned on this account is exempted from tax as per Section 80L of Income Tax Act.

Post Offices Deposit Schemes:Post Office Savings Account: These accounts promote the habit of thrift in

account holders. Amount deposited is withdrawable on demand with facility of earning some interest on the balance in the account.. Post Office Recurring Deposit Scheme: This scheme offers facility of saving small amounts every month for meeting future financial goals. Deposit Scheme for Retiring Govt. employees: This scheme offers tax free

income to retiring/retired employees of Central / State Governments on their retirement benefits.

Deposit Scheme for Retired Employees of Public Sector Undertakings: This scheme offers tax free income to retired employees of Public Sector Undertakings on their retirement benefits. Post Office Senior Citizens Savings Scheme: This scheme provides facility of earning regular interest income relatively higher Interest Rate to senior citizens on their investments. The interest is payable quarterly.. Post Office Time Deposit Scheme: This scheme offers facility of long term investments. The interest is compounded quarterly and is paid annually. Post Office Monthly Income Scheme: This is the only scheme available at Post

Offices, where interest is payable at monthly intervals.

IPOS
An initial public offering (IPO) referred to simply as an "offering" or "flotation," is when a company (called the issuer) issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market. An IPO can be a risky investment. For the individual investor it is tough to predict what the stock or shares will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value. An initial public offering (IPO) occurs when a company first sells common shares to investors in the public. Generally, the company offers primary shares this way, although sometimes secondary shares are also sold as IPOs. For a company to offer IPOs, they need to hire a corporate lawyer as well as an investment banker to underwrite the offer. The actual sale of the shares is generally offered by stock exchange or by regulators. When the

company starts to offer IPOs, they are usually required to reveal financial information about the company so that investors know whether the companies a good investment or not.

The Main Advantages of an Initial Public Offering (IPO)

While contemplating the idea of taking a company public via an IPO (Initial Public Offering), the increased capitalization for the issuing business is a strong point to consider, since a public offering creates a market value on a companys stock. Company directors and shareholder can retain their stock and use it for varied activities, such as: currency for mergers and acquisitions, as stock options to help retain key personnel, they may also sell their shares in the open market. Additionally, the business will have greater access to the capital markets for future capital inflow. In general terms, a companys valuation and debt-to-equity ratio will improve after going public, making it possible for the company to receive much better terms from lenders. While undertaking an IPO a company is doing two things simultaneously: It is offering shares for sale to the public It is also raising capital. There is no doubt that offering securities to the investment public will help a companys management and directors retain a large degree of control, as opposed to many other capital funding scenarios.

For example, if a private company decides to use the services of venture capitalists to raise capital, instead of going public, the VCs (Venture Capitalists) might insist on a decisionmaking position, such as a seat on the board of directors. When a company decides to raise capital via the going public process of an IPO (Initial Public Offering), those unpleasant considerations are avoided. No doubt the prestige related with becoming a public company has a definite appeal. The fact that its easier to promote a public company is also a pertinent consideration because the funding resources available to public companies are much better than whats available to private concerns. Public companies have historically achieved higher recognition than private companies; hence, the public relations image and the perceived stability of being a public company is a plus. All the above considerations should come into play when you are considering the pros and cons of going public via an IPO (Initial Public Offering).

GOVERNMENT SECURITIES
Government securities(G-secs) are sovereign securities which are issued by the Reserve Bank of India on behalf of Government of India,in lieu of the Central Government's market borrowing programme.

The term Government Securities includes:

Centeral government securities State government securities Treasury bills

The Central Government borrows funds to finance its 'fiscal deficit'.The market borrowing of the Central Government is raised through the issue of dated securities and 364 days treasury bills either by auction or by floatation of loans.

In addition to the above, treasury bills of 91 days are issued for managing the temporary cash mismatches of the Government. These do not form part of the borrowing programme of the Central Government.

Government securities are one of the safest in the market. Available at the primary and secondary market of securities, they are avidly searched by all kinds of financial institutions. Their faultless history, spectrum of choices and high liquidity gives government index securities a top notch qualification.

Features of Government Securities

Nomenclature

The coupon rate and year Example: 6.90% GOI

of maturity identifies 2019 indicates

the government security. the following:

6.90% is the coupon rate, GOI denotes Government of India (which is the borrower), 2019 is the year of maturity. Eligibility All entities registered in India like banks, financial institutions, Primary Dealers, firms, companies, corporate bodies, partnership firms, institutions, mutual funds, Foreign Institutional Investors, State Governments, Provident Funds, trusts, research organisations, Nepal Rashtra bank and even individuals are eligible to purchase Government Securities. Availability Government securities are highly liquid instruments available both in the primary and secondary market. They can be purchased from Primary Dealers. PNB Gilts Ltd., is a leading Primary Dealer in the government securities market, and is actively involved in the trading of government securities. Minimum Amount In terms of RBI regulations, government dated securities can be purchased for a minimum amount of Rs. 10,000/-only.Treasury bills can be purchased for a minimum amount of Rs

25000/- only and in multiples thereof. State Government Securities can be purchased for a minimum amount of Rs 1,000/- only. Repayment Government securities are repaid at par on the expiry of their tenor. The different repayment methods are as follows : For SGL account holders, the maturity proceeds would be credited to their current accounts with the Reserve Bank of India. For Gilt Account Holders, the Bank/Primary Dealers, would receive the maturity proceeds and they would pay the Gilt Account Holders. For entities having a demat acount with NSDL,the maturity proceeds would be collected by their DP's and they in turn would pay the demat Account Holders Benefits of investing in government security: a) safety:- The zero default risk is the greatest attraction for investment in government securities. It enjoys the greatest amount of security possible, as the government of India issues it. b) Fixed income: during the term of the security there is likely to be fluctuations in the government security prices and thus there exists a price risk associated with; investment in government security. However, the return on the holding of investment is fixed if the security is held till maturity.

c) Convenience: Government securities do not attract deduction of tax at source and hence the investor having non taxable gross income need not file a return only to obtain a TDS fund.

FIXED DEPOSITS

Depository institution (such as a bank, credit union, or a finance or insurance company) account that pays higher than savings account interest rates but imposes conditions on the amount, frequency, and/or period of withdrawals. A certificate of deposit (CD) is normally issued only for time deposits. Also called fixed deposit. Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on deposit earns a fixed rate of interest, according to the terms and conditions that govern the account. The actual amount of the fixed rate can be influenced by such factors at the type of currency involved in the deposit, the duration set in place for the deposit, and the location where the deposit is made. The most unusual characteristic of a fixed deposit is that the funds cannot be withdrawn for a specified period of time. In most cases, fixed deposits carry a duration of five years. During that time, the money remains in the account and cannot be withdrawn for any reason. Individuals, corporate entities, and even non-profit organizations that wish to set aside funds and limit their access to the funds for a period of time often find that fixed deposits are a simple way to accomplish this goal. As an added benefit, the monies in the account will earn a fixed rate of interest regardless of any fluctuations in interest rates that apply to other types of accounts. However, both these benefits can also turn into disadvantages under certain circumstances. Because the money cannot be withdrawn until the duration is complete, the funds cannot be used even in emergency situations. Changes in the going interest rate may also rise to a

point above and beyond the interest rate applied to existing deposits. This means account holders are actually earning less interest with fixed deposits than with other types of loans and accounts. While the interest rate on fixed deposits cannot be changed, there is sometimes a way to work around the issue of obtaining use of funds in an emergency situation. At times, the lending institution where the fixed deposit is placed may be willing to extend a separate loan to the account holder, using the fixed account as collateral. While not ideal, this can at least make it possible to deal with the current financial crunch. Fixed deposits are a credible way to make a return on investment that is somewhat higher than a standard savings account. The use of fixed deposits can also be helpful when working with various types of currency. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it is possible to choose the type of currency involved in the deposit and lock in a rate of interest. If the choice of currency is a good one, this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the deposit and earn more than with a standard fixed deposit strategy. However, going with an FCFD does contain a slightly higher amount of risk, since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled. If the currency did not fare well in the interim, there is some chance of obtaining a loss,

due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete. ADVANTAGE OF FIXED DEPOSITS Any investment portfolio should comprise the right mix of safe, moderate and risky investments. While mutual funds and stocks are the favorite contenders for moderate and risky investments, fixed deposits, government bonds etc. are considered safe investments. Fixed deposits have been particularly popular among a large section of investors in India as a safe investment option for a long period.

With fixed deposits or FDs as they are popularly known, a person can invest an amount for a fixed duration. The banks provide interest rates depending on this loan amount and the tenure of deposit. Here are the benefits, drawbacks of fixed deposits and precautions one should take while making such investments.

Benefits
1.Safety The fixed deposits of reputed banks and financial institutions regulated by RBI (Reserve Bank of India) the banking regulator in India are very secure and considered as one of the safest investment methods.

2 Regular income Fixed deposits earn fixed interest rates for their entire tenure, which is usually compounded quarterly. So, those who want an income on a regular basis can invest into fixed deposits and use the interest rate as their income. This makes a fixed deposit very popular way of investing money for retirees. 3.Save tax

With the directives of the income tax department stating that investment in fixed deposits up to a maximum of Rs.100,000 for 5 years are eligible for tax deductions under section 80 C of income tax act, fixed deposits have again become popular. Fixed deposits save tax and give high returns on invested money.

Drawbacks 1.Lower rate of returns While the money invested in stock markets may give you a return of 20% the fixed deposits will yield only about 10%. So, the money grows slowly in the case of fixed deposits. 2. Taxes The interest earned on fixed deposits is fully taxable and is added to the annual income of the individual. Gains from stocks are considered capital gains while dividends are tax free.

3. Rising inflation can wipe out the interest benefits The actual benefits or income from fixed deposit can be annulled by a rising inflation. Suppose the inflation which is currently at 3 % rises to about 6%, your fixed deposit at 10% annual return will effectively yield only(10%-6%) = 4% of return. This return would have been (10% -3%) = 7% if the rate of inflation had not changed. This can drastically eat into your fixed deposit income.

NSC,PPF

National saving certificate

National Savings Certificate, popularly known as NSC, is a time-tested tax saving instrument that combines adequate returns with high safety. NSCs are an instrument for facilitating long-term savings. A large chunk of middle class families use NSCs for saving on their tax, getting double benefits. They not only save tax on their hard-earned income but also make an investment which are sure to give good and safe returns.

How to invest
National Savings Certificates are available at all post-offices. The application can be made either in person or through an agent. Post office agents are active in nooks and corners of the country. Following types of NSC are issued:

Single Holder Type Certificate: This can be issued to: (a) An adult for himself or on behalf of a minor (b) A Trust.

Joint 'A' Type Certificate: Issued jointly to two adults payable to both holders jointly or to the survivor.

Joint 'B' Type Certificate: Issued jointly to two adults payable to either of the holders or to the survivor.

Who can Invest

An adult in his own name or on behalf of a minor A trust

Two adults jointly

Denomination and limits

National Savings Certificates are available in the denominations of Rs. 100 Rs 500, Rs. 1000, Rs. 5000, & Rs. 10,000. There is no maximum limit on the purchase of the certificates. So it is for you to decide how much you want to put in the NSCs. This is of course a huge benefit for you can decide as much as your budget allows.

Maturity
Period of maturity of a certificate is six years. Presently interest paid is 8 % per annum half yearly compounded. Maturity value of a certificate of any other denomination is at proportionate rate. Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.

Tax Benefits

Interest accrued on the certificates every year is liable to income tax but deemed to have been reinvested.

Income Tax rebate is available on the amount invested and interest accruing under Section 88 of Income Tax Act, as amended from time to time.

Income tax relief is also available on the interest earned as per limits fixed vide section 80L of Income Tax, as amended from time to time.

Public Provident Fund

Public Provident Fund, popularly known as PPF, is a savings cum tax saving instrument. It also serves as a retirement planning tool for many of those who do not have any structured pension plan covering them. The balances in PPF account cannot be attached by any authority normally. How to Open Account Public Provident Fund account can be opened at designated post offices throughout the country and at designated branches of Public Sector Banks throughout the country. Who can Open Account The account can be opened by an individual in his own name, on behalf of a minor of whom he is a guardian. Tabs on Investment Minimum deposit required in a PPF account is Rs. 500 in a financial year. Maximum deposit limit is Rs. 70,000 in a financial year. Maximum number of deposits is twelve in a financial year.

Maturity

The maturity period of the account is 15 years. Rate of interest is 8% compounded annually.

One deposit with a minimum amount of Rs.500/- is mandatory in each financial year.

The amount of deposit can be varied to suit the convenience of the account holders. The account holder can retain the account after maturity for any period without making any further deposits. In this case the account will continue to earn interest at normal rate as admissible till the account is closed.

The account holder also has an option to extend the PPF account for any period in a block of 5 years at each time, after the maturity period of 15 years.

Lapse in deposit
If deposits are not made in a PPF account in any financial year, the account will be treated as discontinued. The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.

Premature Closure or Withdrawl

Premature closure of a PPF Account is not permissible except in case of death. Nominee/legal heir of PPF Account holder cannot continue the account after the death.

Premature withdrawal is permissible in the 7th year of the account subject, to a limit of 50% of the amount at credit preceding three year balance. Thereafter one withdrawal in every year is permissible.

Account transfer
The Account is transferable from one post Office / bank to another and from post Office to bank or from a bank to a post office.

Tax Benefits

Deposits in PPF are eligible for rebate under section 80-C of Income Tax Act. The interest on deposits is totally tax free. Deposits are exempt from wealth tax.

CONCLUSION AND REFRENCES

CONCLUSION
The project will carry out the customer perception and awareness level about various financial instruments. In my research project the conclusion which will derive after the survey based upon following points which will the outcome of the survey.

a) Do they know about the various financial instrument or not. b) What are the factors which a customer consider while investing in any Financial Instrument. c) How they get information regarding any financial instrument. d) On what basis they will invest in any particular financial Instrument. e) How long they prefer to keep their money in any financial instrument. f) How much of their money they invest in any financial instrument. g) How much return they expect from any financial instrument. h) Are they satisfied with their investment decision or not.

REFRENCES

APPENDIX

OUESTIONNAIRE
Hi, I am Sumit kumar, a student of, RATTAN PROFESSIONAL EDUCATION COLLEGE, Mohali presently pursuing MBA. I have prepared the following questionnaire

for the completion of my summer training project. I promise that all the answer provided by you would be kept confidential. This questionnaire is purely for education purposes.

Personal profile of client Name: - .. Occupation: - .. Income: - less than 1.5 lakhs ( ) 1.5 to 3 lakhs ( ) 3 to 5 lakhs ( ) more than 5 lakhs ( ) Contact no: - Q1. Do you know about the following financial instrument? Mutual fund Yes ( ) No ( )

Insurance Shares P.O deposits Fixed deposits Govt. securities IPOs

Yes ( ) Yes ( ) Yes ( ) Yes ( ) Yes ( ) Yes ( )

No ( ) No ( ) No ( ) No ( ) No ( ) No ( )

Q2. What are the factors which you consider while investing in any Financial Instrument? Safety ( ) Return Risk ( ) ( )

Tax saving ( ) Any other reason

Q3. On what basis you will invest in any particular financial Instrument? Past performance ( ) Portfolio ( )

Fund manager

( )

Market sentiment ( ) Any other reason

Q4. How do you get information regarding any financial instrument? Newspaper ( ) Friends\Relatives ( ) Financial advisor ( ) Any other

Q 5. How long you prefer to keep your money in any financial instrument? Less than 1 year ( ) 1 year to 3 year 3 year to 5 year More than 5 year ( ) ( ) ( )

Q6. How much of your money you invest in any financial instrument? 10% to 15% ( ) 15% to 30% 30% to 50% ( ) ( )

More than 50% ( )

Q7. How much return you expect from any financial instrument? Less than 10% ( ) 10%-20% 20%-30% ( ) ( )

More than 30% ( )

Q8. Will you invest your money for saving the tax in any financial instrument?

Yes ( )

No ( )

Q9. In which financial instrument you will invest to save the tax? Insurance ( ) PPF(public provident fund)
NSCs(national saving certificate)

( ) ( )

Q10. Are you satisfied with your investment decision, please rate? Highly satisfied ( ) Satisfied Less satisfied ( ) ( )

No satisfaction ( )

Thank you for your help and cooperation

Recommendation and suggestions

Targeting the lower income group A program of promotional and educational work with an interest in financial inclusion should be launched. Lack of money is the major factor explaining the low take up of mutual funds by those on low incomes. But another key is a lack of understanding of the benefits and importance of mutual funds. The aim should be to raise awareness and improve access to cover. Delivering of better services

Customer service follows the same principle truly delivering good service relies on a number of positive elements all working in unison. The customer expects better services from the company. So if any customer is visiting the workplace, tidiness should be there at workplace. If there is high volume of calls, the available solutions should be there that can easily organize incoming calls. Raising awareness Mutual fund industry should run regular campaigns to raise public awareness of better management, involving a wide range of issues from promoting better road safely to highlighting the importance of saving. Catch new clients All those firms who are into mutual fund distribution what they did they always try to fetch out the investments from the existing clients like they do not try to catch the new customers, so therefore with the help of kiosk marketing and cold calling they should try to expand their business.