CHAPTER 1INTRODUCTION

INTRODUCTIONThe money an individual earn is partly spent and the rest is saved for meeting future expenses. Instead of keeping the savings idle he/she may like to use savings in order to get return on it in the future. This is called Investment. Investment is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.There are ample Financial Instruments available in the market for investment; each instrument has its own features. To invest money in financial instruments is not so easy. It needs depth study where to invest so that their investment could be safe along with the growth of money. In present scenario everyone wants to invest his money but having their own different objectives. It may be growth of capital, tax minimization, retirement planning, to balance out inflation rate, safety etc. The investors always mess with these objectives which creates confusion of where to invest, which tendency they have to prefer at the time of investment, which factors influence their investment decisions, how to plan their investment portfolio and to whom to consult for taking that all decisions. So this study is based on investors perception regarding their investment. It includes what they think at the time of investment, what are the various factors they keep in mind at investment or affects their decisions regarding investment

1.1 OVERVIEW OF THE INSURANCE INDUSTRYThe insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.

A Brief History of the Insurance SectorThe insurance sector was opened up for private participation with the enactment of the Insurance Regulatory and Development Authority Act, 1999. While permitting foreign participation in the ventures set up by the private sector, the government restricted participation of the foreign joint venture partner through the FDI route to 26 per cent of the paid-up equity of the insurance company. The objective of the liberalization was to expand the scope and ambit of Insurance both Life and General in India. Since opening up, the number of participants in the sector has gone up from six insurers (including the Life Insurance Corporation of India, four public sector general insurers and the General Insurance Corporation (GIC) as the national re-insurer) in the year 2000 to 37 insurers operating in the life, non-life and re-insurance segments as on December 2007. 26 insurance companies in the private sector have been granted registration in the country in collaboration with established foreign insurance companies from across the globe. As per industry estimates, out of 78 per cent Indian households that are aware about life insurance, only 24 per cent own a policy. A combined ICICI Prudential Life Insurance and IMRB survey, conducted in three metros Delhi, Mumbai and Chennaishows that households with income of Rs. 35000 on an average have two policies. Further, 79 per cent people prefer life insurance over other tax saving instruments like post office savings, Equity-Linked Saving Schemes and fixed deposits. Since end of 2000 when insurance was privatized, Life Insurance Company and The distribution network expanded significantly. Until 2000, the general insurance sector had only four public sector players. The public enterprises Oriental Insurance Company of India (OIC), National Insurance Company of India (NIC), and New India Assurance Company of India (NIA) and United Insurance Company of India (UII) -- were located in Delhi, Kolkata, Mumbai and Chennai respectively. They primarily focused on their immediate regions and there was little competition, leading to a near monopolistic environment. On the whole, the sector achieved double-digit growth and this trend is expected to persist over the medium term. ABOUT IRDA (Insurance Regulatory and Development Authority Act) - Insurance sector has been opened up for competition from Indian private insurance companies with the enactment of Insurance Regulatory and Development Authority Act, 1999 (IRDA Act).Insurance Regulatory and Development Authority (IRDA) was established on 19th April 2000 to protect the interests of holder of insurance policy and to regulate, promote and ensure orderly growth of the insurance industry. IRDA Act 1999 paved the way for the entry of private players into the insurance market which was hitherto the exclusive privilege of public sector insurance companies/ corporations. Under the new dispensation Indian insurance companies in private sector were permitted to operate in India with the following conditions: Company is formed and registered under the Companies Act, 1956; The aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance company; The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business. The minimum paid up equity capital for life or general insurance business is Rs.100 crores. The minimum paid up equity capital for carrying on reinsurance business has been prescribed as Rs.200 crores. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.

1.2 ABOUT THE ORGANISATIONHOUSING DEVELOPMENT FINANCE CORPORATION: HDFC was started by Hasmukh Bhai Parekh in 1977 with the formation of Malhotra Committee. HDFC was incorporated with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 10 crores. HDFC has since emerged as the largest residential mortgage finance institution in the country. HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai, India. HDFC also has an international office in Dubai, U.A.E., with service associates in Kuwait, Oman and Qatar. HDFCs main goals are to: a) Develop close relationships with individual households. b) Maintain its position as the premier housing finance institution in the country. c) Transform ideas into viable and creative solutions. d) Provide consistently high returns to shareholders. e) To grow through diversification by leveraging off the existing client base.

STANDARD LIFE: The Standard Life Assurance Company ("Standard Life") was established in 1825 and the first Standard Life Assurance Company Act was passed by Parliament in 1832. Standard Life was reincorporated as a mutual assurance company in 1925.Standard Life is Europe's largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 182 years, is a modern company surviving quite a few changes since selling its first policy in 1825. Standard Life currently has assets exceeding over 125 billion under its management and has the distinction of being accorded "AAA" rating consequently for the past six years by Standard & Poor. INCORPORATION OF HDFC STANDARD LIFE INSURANCE CO. LTD.: The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited. Their ambition from the beginning was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized when HDFC Standard Life was the first life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 74%, while Standard Life owns 26%. Given Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations. HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured.HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and one of the subsidiaries of Standard Life plc, leading providers of financial services in the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry.

VISION, MISSION AND VALUESVISION: The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. 'The most obvious choice for all'.

MISSION: To be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market, rather it is a combination of several things like Customer service of the highest order. Value for money for customers Professionalism in carrying out business Innovative products to cater to different needs of different customers Use of technology to improve service standards Increasing market share.VALUES:Values that we observe while we work: Integrity Innovation Customer centric People Care One for all and all for one Team work Joy and Simplicity

PRODUCTS OF HDFC STANDARD LIFE INSURANCE:HDFC Standard Life offers a bouquet of insurance solutions to meet every need. The products of the company are categorized into various sections which are as follows:A. INDIVIDUAL PRODUCTSB. GROUP PRODUCTSFor Individuals, HDFC Standard Life has a range of protection, investment, pension and savings plans that assist and nurture dreams apart from providing protection. Customer can choose from a range of products to suit his life-stage and needs.

For Organizations, HDFC Standard Life has a host of customized solutions that range from Group Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable plans apart from providing long term value to the employees help in enhancing goodwill of the company.In this project I, as a trainee was dealing with Individual Products. The various products and plans under this category are:Individual Products:1. HDFC Children's Plan,2. HDFC Endowment Assurance Plan, 3. HDFC Loan Cover Term Assurance Plan,4. HDFC Money Back Plan, 5. HDFC Personal Pension Plan,6. HDFC Single Premium Whole Of Life Plan, 7. HDFC Term Assurance Plan,8. HDFC Unit Linked Endowment,9. HDFC Unit Linked Endowment Plus, 10. HDFC Unit Linked Pension, 11. HDFC Unit Linked Pension Plus,12. HDFC Unit Linked Young Star,13. HDFC Unit Linked Young Star Plus1At HDFC Standard Life realize that not everyone has the same kind of needs. Keeping this in mind, varied range of products that customer can choose from to suit all needs. These will help secure customer future as well as the future of family.

Protection Plans: Customer can protect his family against the loss of his income or the burden of a loan in the event of his unfortunate demise, disability or sickness. These plans offer valuable peace of mind at a small price. HDFC Standard Life Protection range includes Term Assurance Plan & Loan Cover Term Assurance Plan.

Investment Plans: HDFC Standard Life Single Premium Whole of Life plan is well suited to meet long term investment needs. HDFC Standard Life provides with attractive long term returns through regular bonuses.

Pension Plans:HDFC Standard Life Pension Plans help secure financial independence even after retirement. Pension range includes Personal Pension Plan, Unit Linked Pension, and Unit Linked Pension Plus Savings Plans.Savings Plans:HDFC Standard Life Savings Plans offer flexible options to build savings for future needs such as buying a dream home or fulfilling childrens immediate and future needs.

Group Products:1. Group Term Insurance, 2. Group Variable Term Insurance, 3. Group Unit Linked Plan, 4. Gratuity Group Unit Linked Plan, 5. Superannuation Group Unit Linked Plan , 6. Leave Encashment

PRODUCT PORTFOLIOHDFC offers products as per the life stages of the customers and their respective needs.Your insurance need will change as your life goes, from starting to work to enjoying your golden years and all the stages in between. Each one of these stages may pose a different insurance need/cover for you. In this section, we have drawn up the basic life stages and help you analyze various insurance needs accordingly.

LIFE STAGES & NEEDS IN THE DIFFERENT STAGESSTAGE 1: YOUNG & SINGLEAn important stage where one lays down the foundation of a successful life ahead. Take advantage of the time and power of compounding to ensure that you build up your dreams. Start saving early.

NEEDS: Save for Home & Wedding Tax Planning Save for Golden Years

STAGE 2: JUST MARRIED

Marriage brings about a significant change. New dreams and new opportunities also bring in additional responsibilities. While both of you look forward to a happy and secure life, it is equally important to ensure that eventualities dont come in the way of shaping your dreams.

NEEDS: Planning for home / securing your home loan liability. Save for vacation. Save for your first child.

STAGE 3: PROUD PARENTS

Once you have children, your need for life insurance is even more. You need to protect your family from an untoward incident. Ensure your protection umbrella takes into account the future cost of securing your childs dream. You will want life to go on for your loved ones, and having enough life insurance is a way to help ensure that.

NEEDS: Provide for children's education Safeguarding family against loan liabilities Savings for post-retirement

STAGE 4: PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today, it is important for you to take time and plan for your life after retirement. Having an early start for retirement planning can make a significant difference to your savings. Think about your golden years even before you have reached them. The key is to think ahead and plan well using your time and money.

NEEDS Provide for regular income post retirement Immediate Tax benefits Lead a secure, independent and comfortable life style in your retirement years.

MILESTONES IN THE HISTORY HDFC is Indias leading housing finance institution and has helped build more than 23, 00,000 houses since its incorporation in 1977. In Financial Year 2003-04 its assets under management crossed Rs.36, 000Cr. As at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around 1 million depositors. Rated AAA by CRISIL and ICRA for the 10th consecutive year Awarded The Economic Times Corporate Citizen of the year Award for its long-standing commitment to community development. Presented the Dream Home award for the best housing finance provider in 2004 at the third Annual Outlook Money Awards HDFC Standard Life Insurance is the first private life insurance company to be granted a license by IRDA Rated as the "Best New Insurer - 2003" by Outlook Money magazine, Indias number 1 personal finance magazine Rated by Business world as Indias Most Respected Private Life Insurance Company in 2004. Has the highest brand recall, close to 80% (Source: AC Neilson ORG MARG, April 2005) Has one of the widest branch networks with offices in over 100 cities servicing over 440 towns

1.3 COMPETITOR INFORMATIONAs we know that this time insurance sector is on boom. Reason is that it gives more profit not only to the company but also to the investor. Today company invest money not only in government securities and bonds but also in the equity which gives more return than the government securities and bonds, and bank deposits. In the market there are lots of insurance companies which are trying to capture more and more market share. The information regarding competitors of HDFC Standard Life Insurance are:-

Life Insurance Corporation of IndiaEvery day the company wake up to the fact that more than 220 million lives are part of our family called LIC. We are humbled by the magnitude of the responsibility we carry and realize that the lives that are associated with us are very valuable indeed. Although this journey started five decades ago, we are still conscious of the fact that, while insurance may be a business for us, being part of millions of lives every day for the past 50 years has been a process called TRUST.

Kotak Mahindra Insurance Company Limited

Kotak Mahindra Insurance Company or Om Kotak Mahindra Life Insurance is a 74:26 joint venture between Kotak Mahindra Bank Limited India and Old Mutual PLC- a leading global financial services provider. Kotak Mahindra Bank Limited (KMBL) is the flagship venture of Kotak Mahindra Group. The group is a full-services financial group providing a wide array of services and products to institutions, banks, corporates and individuals.

Reliance General Life Insurance CompanyReliance General Life Insurance Company is a Reliance Capital Ltd. product. Under the guidance of Anil Dhirubhi Ambani Group, reliance insurance company has secured the position of the top insurers in India. Reliance General Insurance is one of the first non-life companies to get the license from the IRDA. The risks covered under general insurance include property, marine, casualty and liability. Wide ranges of products are available at Reliance Standard Insurance for both group and individual customers.

SBI Life InsuranceSBI Life Insurance offers Personal Insurance and related services in order to enable us plan our life for contingencies and unforeseen events. SBI Life Insurance is a product of the collaboration of the State Bank of India and the French Insurance company, the Cardiff SA. SBI Life Insurance offers Insurance Benefits and pension services based on the case and the portfolio of the clients.

Metlife Insurance Company LimitedMetLife India Insurance Company Private Limited was incorporated in April 2001 as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M.Pallonji and Co. Private Limited and other private investors. Metlife India insurance company is a subsidiary of US based metropolitan life insurance company.

General Insurance Corporation of IndiaGeneral Insurance Corporation of India or GIC of India was incorporated in 1972 to supervise and control the general insurance business in India. All the general insurance companies were merged into four main subsidiaries of GIC namely: National Insurance Company,New India Assurance Company Ltd, Oriental Insurance Company Ltd, United India Insurance Company Ltd. These four companies were renotified independent business activities inNovember 2000 after the implementation of IRDA(Insurance Regulatory and development Authority) Act. In 2002, the General Insurance Corporation of India ownership was ceased and the holding was vested to the Government of India.Birla Sun Life InsuranceBirla Sun Life Insurance Co. Ltd is a 26:74 joint venture between Sun Life Financial Services Canada and Aditya Birla Group.

Bharti AXA Life Insurance Company Ltd.Bharti AXA Life Insurance Company Limited is a 74:26 joint venture between Bharti Group - one of India's leading Multi-business groups and AXA - a world leader in financial protection and wealth management services. Bharti AXA was established in end 2006 with head office at Mumbai.

ING Vysya Life Insurance Company LimitedING Vysya Life Insurance Company Limited established its foothold in the private life insurance industry in India in September 2001.ING Vysya Life Insurance Co Ltd is the result of a joint venture between the world's second largest life insurance company - ING Insurance and one of the largest private sector banks in India - Vysya Bank. Another stakeholder in the JV is GMR Group.

Royal Sundaram InsuranceRoyal Sundaram Alliance Insurance Company Limited is the outcome of a 74:26 joint venture between Sundaram Finance Ltd India and Royal & Sun Alliance PLC London. Royal Sundaram Alliance Insurance Co Ltd was the first foreign joint venture to obtain a license for operating non-life insurance businesses in India.Royal Sundaram began their official operations on 12th march'2001 with their head office in Chennai. Today they have four regional offices in Chennai, Mumbai, Gurgaon and Kolkata along with 35 branch offices.

AMP Sanmar Life Insurance Company LimitedAMP Sanmar Life Insurance Company Limited was a 26:74 joint venture between AMP Australia and Sanmar Group. In 2005, Reliance Life Insurance Company Limited, a subsidiary of Reliance Capital Limited under Anil Dhirubhi Ambani acquired AMP Life Assurance Co. Ltd. this made Reliance Life Insurance the very first private sector life insurance company to start business in India without any foreign collaborator.

ICICI Prudential Life Insurance CompanyICICI Insurance has two faces-ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company Limited. ICICI Prudential Life Insurance is a 74:26 joint venture between ICICI Bank India Ltd. and Prudential PLC based in UK. Established in 2000.ICICI Lombard General Insurance Company Limited is a 74:26 JV between ICICI Bank India ltd. - the second largest private sector bank in India and Lombard Canada Ltd. a Fairfax Financial Holdings Ltd group company that is a 26 billion USD Company. ICICI Lombard started their general insurance businesses in August 2001. It is India's No. l private general insurance company. It is also the first general insurance company to be awarded ISO 9001:2000 certification.These companies are giving tough competition to each other in acquiring market share and adopting new marketing strategy for it. The main competitor of HDFCSL is LIC, Reliance life insurance ltd, and ICICI Prudential.

Today LIC Insurance product likes "JIVAN ANAND", Reliance life Insurance product like "Alternate Investment plan and investment and medic lame plan" and HDFC Standard lifeProduct like "Young Star Plan and pension Plus Plan" is running in the market and helping to the industry to capture more market share. In this stuff market HDFCSL need to adopt new marketing strategy, new innovative policy, and new idea of policy, and advertisement so that it can get the potential market share.

1.4 SWOT ANALYSIS

STRENGTHS: 1. Domestic image of HDFC supported by Prudentials international image is strength of the company . 2. Strong and well spread network of qualified intermediaries and sales person.3. Strong capital and reserve base.4. The company provides customer service of the highest order.5. Huge basket of product range which are suitable to all age and income groups.6. Large pool of technically skilled manpower with in depth knowledge and understanding of the market.7. The company also provides innovative products to cater to different needs of different customers.

WEAKNESSES: 1. Heavy management expenses and administrative costs. 2. Low customer confidence on the private players. 3. Vertical hierarchical reporting structure with many designations and cadres leading to power politics at all levels without any exception.4. Poor retention percentage of tied up agents.

OPPORTUNITIES: 1. Insurable population According to IRDA only 10% of the population is insured, which represents around 30% of the insurable population. This suggests more than 300m people, with the potential to buy insurance, remain uninsured.2. There will be inflow of managerial and financial expertise from the worlds leading insurance markets. Further the burden of educating consumers will also be shared among many players. 3. International companies will help in building world class expertise in local market by introducing the best global practices.

THREATS:1. Other private insurance companies also trying to capture the same uninsured population.2. Big public sector insurance companies like Life Insurance Corporation of India (LIC), National Insurance Company Limited, Oriental Insurance Limited, New India Assurance Company Limited and United India Insurance Company Limited. People trust them more.3. Poaching of customer base by other companies.4. Most of the people dont understand the need or are not willing to take insurance policies in general.

1.5 About The TopicTypes of Investments / Various Financial instrumentsThere are many ways to invest money. In order to decide which investment vehicle is suitable for investor, he/she needs to know their characteristics and why they may be suitable for a particular investing objective. Fixed Deposits Public Provident Fund National Savings Certificate and Government Bonds Mutual Funds and ELSS Retirement Plans Equity Market Insurance and ULIP

1. Fixed DepositsA Fixed Deposit also known as a Term Deposit is an account which allows us to deposit money for a fixed time period. When the deposit period elapses, the depositors get interest on the amount deposited. The fixed deposit interest rates can be as high as 9.5%. Money may be placed with a bank, merchant bank, building, society or credit union for a fixed term at a fixed rate of interest which remains unchanged during the period of the deposit. Depositors may have to accept an interest penalty if they break the deposit, ie ask to take the money out before the agreed period has expired.

Few points which FD investors must consider at the time of investment.

1. SafetyFDs have conventionally been the premier choice for investors with a low risk appetite; assured returns is the key factor which attracts investors towards deposits. Stick to FDs of the highest credit rating i.e. those with a AAA rating even if their rates seem modest vis--vis those offered by company deposits.2. TenureShort tenured fixed deposits continue to be your best bet. With interest rates on the ascent, a further hike in rates offered by fixed deposits cannot be ruled out. Locking your investments in longer tenured instruments may lead to an opportunity loss.3. Additional benefitsFixed deposits from reputed entities offer additional benefits, e.g. they can be used as collateral against which loans can be raised. Select a fixed deposit scheme which scores favourably on such parameters.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. 4.Tax-savingFDsTax-saving is no longer the guarded domain of Public Provident Fund (PPF) and National Savings Certificate (NSC). Tax-saving FDs offered by banks are also eligible for deduction under Section 80C. The deposits are subject to a 5-Yr lock-in period. Presently, the returns on tax-saving FDs vary between 7.50%-8.50% per annum. The minimum and maximum investment amounts (per annum) have been pegged at Rs 100 and Rs 100,000 respectively. Introduction of tax-saving FDs offers risk-averse investors the opportunity to diversify across instruments while conducting the tax-planning exercise.

2. Public Provident Fund The Public Provident Fund Scheme is a statutory scheme of the Central GOI. The Scheme is for 15 years. The rate of interest is 8% compounded annually. The minimum deposit is 500/- and maximum is Rs. 70,000/- in a financial year. One deposit with a minimum amount of Rs.500/- is mandatory in each financial year. The deposit can be in lump sum or in installments, not more than 12 Installments in a year or two installments in a month subject to total deposit of Rs.70,000/-. It is not necessary to make a deposit in every month of the year. The amount of deposit can be varied to suit the convenience of the account holders. The account in which deposits are not made for any reasons is treated as discontinued account and such account can not be closed before maturity. The discontinued account can be activated by payment of minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year. Account can be opened by an individual or a minor through the guardian. The grand father/mother cannot open a PPF behalf of their minor grand son/daughter. The facility of first withdrawal 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 in such account. Pre-mature closure of a PPF Account is not permissible except in case of death. Nominee/legal heir of PPF Account holder on death of the account holder can not continue the account, but account had to be closed. The account holder has an option to extend the PPF account for any period in a block of 5 years on each time. The account holder can retain the account after maturity for any period without making any further deposits. The balance in the account will continue to earn interest at normal rate as admissible on PPF account till the account is closed. The PPF scheme is operated through Post Office and Nationalized banks. Deposits in PPF qualify for rebate under section 80-C of Income Tax Act. The interest on deposits is totally tax free. Deposits are exempt from wealth tax. Nomination facility available. Best for long term investment. 3. National Savings Certificate Minimum investment Rs. 500/- No maximum limit. Rs. 1000/- grow to Rs. 1601/- in six years. Rate of interest 8% compounded half yearly. Two adults, Individuals, and minor through guardian can purchase.Companies, Trusts, Societies and any other Institutions not eligible to purchase.Non-resident Indian/HUF can not purchase. No pre-mature encashment. Annual interest earned is deemed to be reinvested and qualifies for tax rebate for first 5 years under section 80 C of Income Tax Act. Maturity proceeds not drawn are eligible to Post Office Savings account interest for a maximum period of two years. Facility of reinvestment on maturity. Certificate can be pledged as security against a loan to banks/ Govt. Institutions. Facility of encashment of certificates through banks. Certificates are encashable any Post office in India before maturity by way of transfer to desired post office. Certificates are transferable from one Post office to any Post office. Certificates are transferable from one person to another person before maturity. Duplicate Certificate can be issued for lost, stolen, destroyed, mutilated or defaced certificate. Tax Saving instrument - Rebate admissible under section 80 C of Income Tax Act. Interest income is taxable but no TDS. Deposits are exempt from Wealth tax.

4. Government BondsA government bond is a bond issued by a national government denominated in the country's own currency. Bonds issued by national governments in foreign currencies are normally referred to as sovereign bonds.Government bonds are usually referred to as risk-free bonds, because the government can raise taxes to redeem the bond at maturity. Some counter examples do exist where a government has defaulted on its domestic currency debt, such as Russia in 1998, though this is very rare. As an example, in the US, Treasury securities are denominated in US dollars. In this instance, the term "risk-free" means free of credit risk. However, other risks still exist, such as currency risk for foreign investors. Secondly, there is inflation risk, in that the principal repaid at maturity will have less purchasing power than anticipated if the inflation outturn is higher than expected. Many governments issue inflation-indexed bonds, which should protect investors against inflation risk.

Bonds are issued by public authorities, credit institutions, companies and supranational institutions in the primary markets. The most common process of issuing bonds is through underwriting. In underwriting, one or more securities firms or banks, forming a syndicate, buy an entire issue of bonds from an issuer and re-sell them to investors. The security firm takes the risk of being unable to sell on the issue to end investors. However government bonds are instead typically auctioned. A bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals. Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Bonds must be repaid at fixed intervals over a period of time.

5. Mutual FundsA mutual fund is a body corporate registered with SEBI that pools money from the Individuals/corporate investors and invests the same in a variety of different financial Instruments or securities such as Equity Shares, Government Securities, Bonds, Debentures, etc. The income earned through these investments and the capital appreciations realized 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. Mutual fund units are issued and redeemed by the Asset Management Company (AMC) based on the funds net asset value (NAV), which is determined at the end of each trading session. Mutual funds are considered to be the best investments as on one hand it provides good returns and on the other hand it gives us safety in comparison to other investments avenues.Figure: Below describes broadly the working of a mutual fund:

Fig No. 16. Equity Linked Saving SchemeEquity linked saving schemes are a kind of mutual funds like diversified equity funds with Tax benefits. It is just like other tax saving instruments like National Savings Certificate and Public Provident Fund. Main advantage with ELSS is lock-in period is only 3 years while for NSC it is 6 years and for PPF it is 15 years. At the same time risk factor is high in ELSS.As per Income Tax Act 80C investment up to Rs 1,00,000 are eligible for deduction from the gross total income hence reducing the total taxable income. For example if your total annual income is Rs 3,00,000 and you invest Rs 1,00,000 in ELSS then your taxable income will become Rs 2,00,000.Previously there was an upper limit for investing in tax saving instruments like ELSS of 5,00,000. Only individuals with less than 5,00,000 annual income are allowed to invest in tax saving instruments. But last year financial budget removed this restriction and now any individual can invest in ELSS irrespective of their income level.Advantages of ELSS1. Main advantage of ELSS is its short lock-in period. Maturity period of NSC is 6 years and PPF is 15 years. 2. Since it is an equity linked scheme earning potential is very high. 3. Investor can opt for dividend option and get some gains during the lock-in period 4. Investor can opt for Systematic Investment Plan 5. Some ELSS schemes also offer personal accident death cover insurance 6. Provides 30 to 40% returns compared to 8% in NSC and PPF

Disadvantages of ELSS1. Risk factor is high compared to NSC and PPF 2. Premature withdrawal is not allowed but it is allowed in other instruments in some specific conditions.

Diversified Equity Schemes and ELSSBoth Equity linked saving scheme and diversified equity scheme operates in same way. Both are high return and high risk schemes. But there is a 3 year lock in period of ELSS and it provides tax benefits too.Systematic Investment PlanBest way to invest in ELSS is through Systematic Investment Plan(SIP). With SIP you can invest a small amount every month for a specific time period. With SIP investor can take advantage of fluctuations in the stock market. So investor will get more units when the market is down and get less units when the market is up. For eg if you are investing Rs 1000 every month and you will get 100 units for when Net Asset Value (NAV) is 10 and will get 50 units when NAV is 20. So investing a fixed sum regularly helps to cover the market fluctuations by rupee costs averaging. Also most of the Asset Management Companies (AMC) charges less entry load for SIP compared to normal purchase.7. Retirement PlansAretirement planis an assurance that you will continue to earn a satisfying income and enjoy a comfortable lifestyle, even when you are no longer working. An increasing number of individuals have already started planning for theirretirement so that they can live their life happily even after getting retired.Independence is the new way of life: An increasing number of young Indian professionals are moving away from the traditional joint family structure. Since support no longer comes easily, parents have realized the need to provide for themselves during their retirement years.Skyrocketing costs throw even a well-salaried person off balance. With rates rising everyday, you can imagine how high they will be when you are ready to retire. Aretirement planprovides you with a steady income every month, to arm you in the face of rising costs.The key to retirement planning success is to start early and gain the benefit of the power of compounding. The person should start planning for retirement at a very young age because of many reasons:0. Life expectancy: As of 2007 the life expectancy at birth for males is 67 years and 71 years for females. With advancement in technology life expectancy is likely to increase. Result: You will have to fend for more number of years post retirement.

2. Medical emergencies: With age come health problems. With health problems, come medical expenditure which may make a huge dent in your income post retirement. Failure here could lead you to liquidate (sell) your assets in order to meet such expenses. Remember mediclaims do not always suffice. 3. Nuclear families: Gone are the days when people use to have an entire cricket team making a family. Today's youth prefer not more than two children. With westernisation coming in, the culture of joint family is changing. They prefer independence and stay away from their family. Hence people have to develop a corpus to last them through their retirement without any help from family. 4. No government sponsored pension plan: Unlike the US and UK where they have IRA and state pension respectively as social security benefit during retirement, the government of India does not provide such benefits. So again you are on your own and planning for retirement will play a major role.5. Job hopping: With youngsters hopping jobs regularly they do not get benefit of plans like super annuity and gratuity. Both these require certain number of working years spent in the service of a particular employer.

8. Equity Equities are often regarded as the best performing asset class vis--vis its peers over longer time frames. However equity-oriented investments are also capable of exposing investors to the highest degree of volatility and risk. There are a number of factors, which affect the performance of equities ad studying and understanding all of them on an ongoing basis, can be challenging for most.Stock markets have always been a draw for investors for their ability to generate wealth over the long-term. Fear, greed and a short-term investment approach act as hurdles that frustrate the investor from achieving his/her investment goals. You need to keep in mind the risk associated with the stocks. You also need to diversify your equity portfolio i.e., include more stocks. This helps you diversify your investment risk, so even if something were to go wrong with a stock in your portfolio, other stocks/industries should help you shore up your portfolio.Two important resources that are critical to investing directly in stock markets are quality stock research and a reliable and inexpensive stock broker. The first one research on stocks is the most critical input that investors need to identify before they begin investing in stock markets. This is because even while you may have the risk appetite for equities, you still need credible, stock market related research that can help you make the right investment decision.

The good thing about the Indian market, riding on the back of an economy that has grown by over 7% in the last few years, is that you cant miss being part of growth if you invest in the stock markets carefully. The bad part is the CHOICE! Of the listed 4,758 stocks on BSE and the NSE, how do you even get close to taking a call? Here comes the need of a financial advisor who can make your investment decisions and monitor your funds. Clearly, as Indians earn more, save more and accumulate more, financial advisors will play a crucial role in helping individuals create, protect and manage wealth.

9. Insurance and ULIPLife insurance has traditionally been looked upon pre-dominantly as an avenue that offers tax benefits while also doubling up as a saving instrument. The purpose of life insurance is to indemnify the nominees in case of an eventuality to the insured. In other words, life insurance is intended to secure the financial future of the nominees in the absence of the person insured.The purpose of buying a life insurance is to protect your dependants from any financial difficulties in your absence. It helps individuals in providing them with the twin benefits of insuring themselves while at the same time acting as a compulsory savings instrument to take care of their future needs. Life insurance can aid your family on a rainy day, at a time when help from every quarter is welcome and of course, since some plans also double up as a savings instrument, they assist you in planning for such future needs like childrens marriage, purchase of various household items, gold purchases or as seed capital for starting a business.Traditionally, buying life insurance has always formed an integral part of an individuals annual tax planning exercise. While it is important for individuals to have life cover, it is equally important that they buy insurance keeping both their long-term financial goals and their tax planning in mind. This note explains the role of life insurance in an individuals tax planning exercise while also evaluating the various options available at ones disposal.Life is full of dangers, but with insurance, you can at least ensure that you and your dependents dont suffer. Its easier to walk the tightrope if you know there is a safety net. You should try and take cover for all insurable risks. If you are aware of the major risks and buy the right products, you can cover quite a few bases. The major insurable risks are as follows: Life Health Income Professional Hazards Assets Outliving Wealth

ULIPSULIP stands for Unit Linked Insurance Plans. As we know that insurance is for protecting our life from the any uncertain events like death or accident. The purpose of the normal insurance plan is just protecting the life but not ensuring any savings for the future. Many people wanted plan which gives protection also gives the returns for their investment. So, insurance companies come up with the ULIP plan where the premium about is invested in the share market and returns better income on the maturity period.ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion is invested in a fund which in turn invests in stocks or bonds. The value of investments alters with the performance of the underlying fund opted by you.ULIPs are structured such that the protection element and the savings element can be distinguished and hence managed according to your specific needs, offering unprecedented flexibility and transparency.

WORKING OF ULIPSIt is critical that you understand how your money gets invested once you purchase ULIP.Once you decide the amount of premium to be paid and the amount of life cover you want, the insurer deducts some portion of the premium upfront. This portion is known as the Premium Allocation charge and this varies from product to product. The rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and administration charges are thereafter deducted on a periodic (mostly monthly) basis whereas the fund management charges are deducted on a daily basis Since the fund of your choice has an underlying investment either in equity or debt or a combination of the two your fund value will reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the time of maturity. The pie-chart below illustrates the split of your ULIP premium in a graphical format.

Fig No. 2 In addition to the investment fund ULIPs give you the benefit of insurance cover as well. The mortality charge mentioned above goes towards provision of this cover. Over a period of time, the component of charges as a percentage of the premium paid tends to decrease. Which is why, you should continue paying your premiums regularly. That is the best way of making your ULIP deliver on its dual benefit of protection and wealth creation.WHEN ULIPS WORK BESTGet the most out of your ULIPWhether you are in the process of deciding which ULIP to invest in; or whether you already have a unit linked insurance policy to secure your important financial goals there are some key principles which should govern any decision related to ULIPs. Adhering to these key principles will allow you to make optimum utilization of your ULIP.

Appropriate Life Cover Right Fund Option Long-Term Investment Know the charges Know the features

WHY BUY ULIPSULIPs are dynamic plans and are flexible by nature and hence allow for changes and high degree of customization in the plan as opposed to most of the financial plans which once purchased cannot be modified. It is because of embedded characteristics of transparency, flexibility, liquidity & goal based savings that ULIPs have emerged as preferred investment option today.The following subsections will not only help you to understand various attributes of ULIPs but also guide you to use these features to manage your policy.

FLEXIBILITY Flexibility to change your life cover: ULIPs give you the flexibility to choose your sum assured (insurance cover) at the time of policy inception. Moreover, some ULIPs allow you to increase your sum assured over the term of the plan. This is crucial as your protection needs keep on changing with time .Typically, greater the financial liabilities you have such as repayment of a home loan, greater will be your need for protection. Flexibility to change premium amount: With ULIPs you can easily change premium amount as most ULIPs provide you the option to increase or reduce premiums after a certain period of time to match your premium paying capability. Another distinguishing feature of ULIP is Top up which is an additional contribution over & above regular premium so that if you receive extra money today you can invest the amount in your policy & maximize your investment gains. Flexibility to opt for a rider: ULIPs also enable you to customize the policy with optional riders to enjoy additional protection. Riders are additional or supplementary benefits that are bought along with the main insurance policy. Some of the commonly offered riders by most insurance companies are critical illness benefit rider, accident & disability benefit rider, waiver of premium rider etc. For ex. a critical illness rider cover major critical illnesses like heart attack etc. In case of contracting any of the above illness, the insurance company pays the insured amount. Flexibility to choose your fund option: Most of the ULIPs come with an in - built range of fund options to choose from ranging from aggressive funds to conservative funds so that you can decide to invest your money in line with your investment preferences and needs. Whats more, ULIPs even come with the option of switching between different fund options so that you are able to reap maximum benefits from your investments.

TRANSPARENCYOne of the key advantages that ULIPs offer is complete transparency which makes the working of a ULIP abundantly clear to the investor. Thus, you are empowered to make informed decisions on how to best use your ULIP.FREE-LOOK PERIODULIPs also offer you a distinct feature that no other financial product offers as of now. It is called Free-look period which is a 15 day window during which you can close the policy & get paid back the entire premium less charge borne by company in issuing the policy in case you are unhappy with the product.NET ASSET VALUEIt is critical that you monitor the performance of your policy on a regular basis. This will help you ascertain whether you are on right financial track or not. To help you do so all life insurance companies publish the NAV of different fund options on their website on a daily basis so that you can track the performance of your policy on a regular basis. This will also help you make informed decisions when it comes to comparing fund performances.TAX BENEFITSULIPs are an efficient tax saving instrument too .The tax benefits that you can avail in case you invest in ULIPs are described below: Life insurance plans are eligible for deduction under Sec. 80C Pension plans are eligible for a deduction under Sec. 80CCC Health insurance plans and critical illness riders are eligible for deduction under Sec. 80D The maturity proceeds or withdrawals of life insurance policies are exempt under Sec 10(10D), subject to norms prescribed in that section.

CHAPTER 2RESEARCH METHODOLOGY

MEANINGResearch methodology is a way to systematically solve the research problem. It may be understood as a science of how research is done scientifically.

2.1 OBJECTIVES OF THE STUDY To gain an insight into the Financial Instruments available for investment in the market. To analyze the impact of investment objectives on investment decisions. To anatomize the importance of time for the investors. To extrapolate which is the better investment option which can generate good returns for the investor and will give the benefit of Tax Saving.

2.2 SCOPE OF THE STUDY1. This study is helpful in understanding about the various investment opportunities available in the market.2. This study helps the investors whom to consult before making any investment.3. This study is useful to company in understanding the investors perception to devise the suitable product/marketing strategies in order to attract them. 4. Financial planner get advantage to make portfolio according to response given by respondents/investors, which belong to different occupations, having different income level, different age level or which instrument is mostly like by the investors for investment.

2.3 METHODOLOGY In this project the Primary method of data collection used is 1. Questionnaire MethodIn this Project, a Questionnaire is prepared, which is given in the annexure section, and this Questionnaire is filled by investors living in the Delhi.

In this project the Secondary method of data collection used are 1. Websites 1. Books

2.4 SAMPLE SIZESample size used in this project is 54 respondents of Delhi.

CHAPTER 3DATA ANALYSIS & FINDINGS

Ques1. Do you invest your money in any kind of Financial Instruments?Yes85%

No15%

Table No. 1

Fig No.3INTERPRETATIONAccording to this graph, it is interpreted that 85% people invest their money in financial instruments to get good returns and with the purpose of tax saving too. There are 15% people who do not invest their money in financial instruments due to many reasons like they do not believe in saving money for investment and in some cases, they like to save but their high expenses and financial commitments do not permit them to invest.

Ques2. Which one you prefer the most and why? F.D., Govt. Bonds, PPF23%

Insurance and ULIP30%

Equity Trading26%

Retirement Plans9%

Mutual Funds12%

Table No. 2

Fig No. 4

INTERPRETATIONAccording to this figure, it has been analyzed that most of the people i.e. 30% prefer ULIP and Insurance as an investment tool because ULIP combines the benefit of Insurance and Investment both and Insurance save human life against death and avail tax benefit too. Secondly,26% of the people prefer to invest in Equity because they want to earn higher returns.23% of the people still prefer F.Ds and investments in govt. bonds because they prefer safety of the principal and tax saving/benefits.Ques3. What is the main objective of your investment? Protection (Life Insurance)23%

Returns32%

Safety13%

Retirement Planning9%

To reduce tax liability / tax saving15%

Beating Inflation8%

Table No. 3

Fig No. 5INTERPRETATIONIt is found that growth of capital/returns is the most important objective which investors consider while investing. It is also seen that 23% of the investors prefer to secure their life against death. Safety of their capital is also considered to be important. Inflation has only been given 8% which reflects that people are still not giving much consideration to inflation even due to a sharp rise in the inflation rate. The people who are business man are generally seen returns/growth and tax benefits at the time of investment. Serviceman generally gives preference to safety and retirement benefits.

Ques.4 In which sector do you prefer to invest your money? Fig No. 6INTERPRETATIONAccording to the above pic chart it it seen that near about 20% people prefer to invest their surplus income in public sector, 24% of them prefer government sector, 36% prefer investment in private sector and 20% prefer or like to invest in foreign sector to maximize the amount of money invested.

Ques 5. Which Tendency do you prefer the most?

Fig No. 7

INTERPRETATIONIt is found that 39% people like the tendency high risk high return, as they believe unless and until we would not take risk how can we earn or get return more. That tendency is generally prefer by business and servicemen whose income level is more than 5 lac. The investor with low income level generally prefer moderate risk or low risk to invest in insurance, Government bonds, bank savings, Debt etc. The age level also influence the tendency, the age level between 18 30 likes to take risks but above 45 they prefer low risk low return.

Ques. 6. What percentage of income do you invest?

Fig No. 8

INTERPRETATION

From the above pic chart the level of income people prefer to invest is seen clearly. Near about 10% people invest below 15% of their savings, and there are large no. of people who lie between 15-50% as shown above. There are also few people about 17% who are able to invest more than 50% of their income.

Ques7. For what term do you generally invest?Less than10years60%

10-15 years35%

More than 15 years5%

Table No. 4

Fig No. 9

INTERPRETATIONBy looking at this graph, it has been analyzed that most of the people take the time horizon of less than 10 years which is followed by 35% of the investors investing for 10-15 years. Investors investing for 10-15 years in order to earn better returns because most of the times long term investment generate good returns over the investments. ULIPs are the best products for Long-Term Investors. Investors investing for more than 15 years go for insurance, retirement plans etc.

Ques8. Why do you save and invest?

To meet day to day expenses56%

To achieve future goals.44%

Table No. 5

Fig No. 10

INTERPRETATIONIt is found that 56% of the investor invest their money to meet day to day expenses and like to invest for a short period of time. These investors use to invest mostly in Equity shares, Mutual Funds (ELSS) etc. There are 44% of the investors who invest their money to achieve future goals and invest for long period of time like in ULIP, Retirement Plans, Life Insurance etc. The investors perception investing to achieve future goals is different from the investors investing to meet day to day expenses.

Ques 9. At what time you prefer to invest in the financial instruments?

At the beginning/middle of the financial year55%

At the end of the financial year45%

Table No. 6

Fig No. 11

INTERPRETATIONIt is found that 55% of the investors go for investment in financial instruments at the beginning and middle of the financial year because they want peace of mind and they think that they will be able to save small amount of money till the end of year and will not be able to save and invest more. While 45% of the investors invest at the end of the year in order to save tax or to take advantage of tax benefits and use to take financial decisions from CAs /Tax Consultants.

Ques 10. Whom do you consult before going for any kind of tax saving investment?

Fig No. 12

INTERPRETATIONIt is found that 40% of the respondents take their financial decisions independently which depicts they are not taking any advisory services from financial experts and they feel that they can handle their portfolio on their own and hence make their own decisions regarding investments. while 35% of the respondents make investment decisions from Tax Consultants and CAs so that they can save their huge amount of tax by investing their money and 18% of the investors take their investment decisions by consulting financial consultants. This opens up the door for various financial advisors who can target these investors and can give advisory services.

Ques.11 What is the purpose behind investment?

Fig No. 13

INTERPRETATIONFrom the above chart we can see the purpose of investors. There are large number of people who invest for creation of wealth (31%) , there are 29% who invest to get constant returns out of their investments. 21% are investing to save tax and others are investing to meet their future expenses as shown above.

Ques.12 How often do you monitor your investment?

Fig No. 14

INTERPRETATIONFrom the above pie chart we can see that there are only few people who are constantly monitoring their investments (16%), some of them are looking on montly basis and we can see most of the people are not much concerned about their investments, as per the survey it is seen they monitor their investments occasionally(45%)

Ques.13 Do you have a formal budget for family expenditure?

Fig No. 15

INTERPRETATIONIt is clearly seen from the above pie chart that most of the people do not have a formal budget for their family expenditure. Only 36% people have their budget expenditure rest do not have a formal budget which affects the investment behavior of an individual.

FINDINGS

On the basis of Data Analysis of the project titled Study of various financial instruments as tax saving options. The following findings have been observed:

85% of the people invest their money in financial instruments and 15% of the people do not invest their money because they are not able to save for investment i.e. they spend whatever amount of money they earn. It has been observed that most of the people i.e. 40% invest their money into insurance with the main objective of availing Tax Benefits. Most of the respondents i.e. 35% invest their money with a long term view i.e. 10 15 years. Before choosing an investment option, most of the respondents i.e. 32% look for how quickly they will be able to increase their wealth i.e. returns and a large proportion of respondents look for both the safety of principal and tax benefits. Most of the respondents i.e. 30% invest in ULIP because it is a combination of Insurance and Investment. 39% people like the tendency high risk high return because they prefer to earn higher returns. 56% of the investor invests their money to meet day to day expenses and like to invest for a short period of time. 45% of the respondents go for investment in financial instruments at the end of the financial year to avail tax benefits and use to take financial decisions from CAs /Tax Consultants.

CHAPTER - 4LIMITATIONS OF THE STUDY

LIMITATIONS

The project was constrained by time limit of two months. Mindset of people may vary depending upon their age, gender, income etc. People mind set about the survey was an obstacle in acquiring complete information & positive interaction. Respondents were very busy in their schedule. So it was very time taken in every Questionnaire response by them. Sometimes due to negativity in their mind regarding insurance, they never use to take interest in giving correct information. Limited analytical techniques have been used due to the nature of data available on the subject.

CHAPTER 5CONCLUSIONS & SUGGESTIONS

CONCLUSIONOn the basis of Data Analysis of the project titled Study of various financial instruments as tax saving options. It can be concluded that:

Investment in various financial instruments is affected by the perception of the people and their tendency towards risk and return. The age of the investor also affects the investment decision. The younger investors like to take risk and generally invest in more in equity than the people who are between 4560. While investing into ULIPs, Insurance, Retirement plans and PPF people invests with the main objective of taking the Tax Benefit the government offers while in Mutual Funds and equity shares people invests with the main objective of the appreciation of capital. People generally invest for the period of 1015 years, take a long term view for investment in order to grow their money. Most of the people prefer ULIP as an investment option because ULIPs offer the benefits of both Insurance and Investment.

SUGGESTIONSAfter doing a survey on Study of various financial instruments as tax saving options.The following suggestions can be made:

Many of the investors take their investment decisions independently but they should consult CAs, Tax consultants if they are investing with the main purpose of tax saving. People are insured but there is still high uninsured population so the insurance companies should tap the highly uninsured area in order to increase their market share. HDFC SLIC being the private player, must use aggressive marketing strategies to capture the more market because LIC is a public company and people have more trust on it. So, HDFC SLIC has to do a lot in order to build a trust in the customers. Mutual Funds are not so popular because there are lot of charges deducted every year for example Fund Management charge, entry load, exit load in case of premature withdrawls etc. So these entry and exit loads must be abolished by the mutual fund companies. Somewhere ULIPs are criticized for charging heavy charges in the initial 2 3 years, for example policy administration charges, premium allocation charge. So these charges must be reduced in order to attract more customers. It is suggested that if the investor is investing in ULIPs then invest for long period of time to earn high returns. Investors should not put all the eggs into one basket but should diversify its portfolio to minimize the risk. Investors who prefer equity investment should also include debt in their portfolio because share market is totally unpredictable and can lead to heavy losses in bear situation. Investors investing with the main purpose of tax saving should consult their consultants to know where to invest so that investment leads to higher returns as well as tax saving too.

BIBLIOGRAPHY

BOOKS1. Chandrasekaran.P Introduction to Foreign Trade , Foreign Exchange & Risk Management , Indian Institute of Bankers,4th Edition, May-June 20092. Khan M.Y. and Jain P.K (2001), Financial Management, Tata McGraw Hill. 3. Kothari C.R., Research Methodology: Methods and Techniques, Edition- 2005, Published by WISHWA PRAKASHAN 1990. 4. Pandey I.M. (2003), Financial Management, Tata McGraw Hill.

WEBSITES

1. www.hdfcbank.com2. http://www.hdfcbank.com/aboutus/default.htm?src=hp_top_nav3. http://www.hdfcbank.com/personal/products/accounts-and-deposits4. http://www.hdfcbank.com/personal/products/investments/investment-products5. http://www.hdfcbank.com/aboutus/cg/Financial_Information.htm6. http://economictimes.indiatimes.com/hdfc-bank-ltd/infocompanyhistory/companyid-9195.cms7. http://educaregroup.hpage.co.in/swot-analysis-of-hdfc_54832419.html8. http://www.researchandmarkets.com/reports/2260067/hdfc_bank_limited_swot_strategy_and_corporate9. http://www.hdfcbank.com/aboutus/careers/default.htm?src=hp_top_nav10. http://www.hdfcbank.com/personal/products/insurance/life-insurance11. http://www.hdfcbank.com/personal/hnw/hnw-detail/imperia-banking/gts8miso12. http://www.hdfcbank.com/ways-to-bank/bank-online/netbanking13. http://en.wikipedia.org/wiki/HDFC_Bank14. http://economictimes.indiatimes.com/hdfc-bank-ltd/infocompanyhistory/companyid-9195.cmsANNEXUREQUESTIONNAIREPersonal InformationName: __________________________________________________Telephone No: __________________________________________________Age Group 18-25 years 25-35 years 35-45 years 45-60 years Above 60 years

Income Group (per annum): 5 lacs

Ques1. Do you invest your money in any kind of Financial Instruments? Yes NoQues2. Which one you prefer the most and why? Fixed Deposit, Post Office Savings, Government Bonds Retirement Plans Equity Trading Insurance and ULIP Bank Savings PPF Mutual Funds

Ques3. What is the main objective of your investment? Protection (Life Insurance) Returns Safety Retirement Planning To reduce tax liability / tax saving Beating Inflation Others (please specify).

Ques.4 In which sector do you prefer to invest your money? Private sector Government sector Foreign sector Public Sector

Ques5. Which Tendency do you prefer the most? Low risk, low return Moderate risk, moderate return High risk, high return

Ques 6. What percentage of income do you invest ? 0-15% 15-30% 30-50% >50%

Ques7. For what term do you generally invest? Less than 10years 10-15 years More than 15 years

Ques8. Why do you save and invest? To meet day to day expenses To achieve future goals.

Ques9. At what time you prefer to invest in the financial instruments? At the beginning of the financial year At the end of the financial year

Ques10. Whom do you consult before going for any kind of tax saving investment? Independently Tax Consultants/CAs Advice from friends/Relatives Financial Consultants.

Ques.11 What is the purpose behind investment?

Wealth creation Tax saving Earn returns Future expenses

Ques.12 How often do you monitor your investment? Daily Monthly Occasionally

Ques.13 Do you have a formal budget for family expenditure? Yes No---------------------------------------------------------------------------------------------------------------------------- 58 -