S. P. MANDALI’S PRIN L. N.

WELINGKAR
INSTITUTE OF MANAGEMENT DEVELOPMENT &
RESEARCH

SUMMER INTERNSHIP PROJECT REPORT

ON

Comparative study of various alternative available in the

market for wealth management

BY

APOORVA MALPEKAR

MMS 2018 – 20 SEMESTER III

SPECIALISATION: MMS Finance

ROLL NO. 93

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 TABLE OF CONTENT

Sr. No Particulars Page No

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 ACKNOWLEDGEMENT

It’s a matter of great pleasure and satisfaction to present this report on Comparative study of
various alternative available in the market for wealth management. I would like to take
this opportunity to thank all those who helped me during my summer internship.

This project would not have been complete without the constant support and guidance of my
mentor Mr. Manoj Kumar Gupta, Senior branch manager, Tilak Nagar Branch and Mr
Bishwajit Kumar, Operations head. I would also like to express my sincere gratitude to
entire staff at Tilak Nagar Branch, Bank Of Baroda. I am thankful for their practical insights
and encouragement at every step of my summer internship.

I would like to thank my faculty mentor Prof. Narasinha Sawaikar for his practical input
throughout the span of my project. I would also like to thank the teaching staff of Welingkar
Institute of Management for making me capable enough to undertake this project
independently and for broadening my horizon.

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Executive Summary

Wealth management is an investment term which includes managing the funds of an

individual or a client. Wealth management is a continuous process which includes investing
the surplus funds of the clients in various investments portfolio and reviewing them
periodically to see that they are giving a good returns. It involves establishing client-advisor
relationship, Gathering the data and analysing the position of the client, presenting an action
plan, implementing the plan and reviewing the current portfolio on a regular basis.
Bank of Baroda offers services related to wealth management.
Their main competitor includes other wealth management banks or firms which include:
 Motilal Oswal
 ICICI Securities
 HDFC Securities
 Morgan Stanley
 Religare Wealth Management
 Kotak Securities
It offers products and services through which its clients can maximise their wealth. It offers
investment in various portfolio ranging from Mutual Funds, Insurance, Stocks and also fixed
deposits. It offers investment through its dedicated website or an app called BOBCAPS.
The surplus income if not invested remains stagnant, the time value of money decreases. The
value of 100 Rs. today may not be same after 10 years. Its purchasing capacity would
decrease over a period of time. Therefore it is necessary to put the surplus wealth into use. In
this scenario wealth management is beneficial. It helps to fulfil various goals like buying a
vehicle or a house. Or an insurance policy which protects the investor against any unforeseen
incident.
There are various instruments available in the market for wealth management and most of the
clients are not aware about them. They usually follow the heard mentality or rumours in the
market, invest hastily and loose their wealth. This is where wealth management comes to use.
Bank Of Baroda have their own dedicated wealth management department. They analyse the
client needs, their risk appetite and design an investment portfolio according to various
factors as stated above. The investment portfolio may be distributed among various
investment instrument to reduce or mitigate the risk which arises due to changing market
condition. The research design was formed by using a sampling survey method where about
100 people were interviewed by a way of questionnaire or an unstructured interview.
The study was conducted at Bank Of Baroda, TilakNagar Branch Mumbai. During the project
I took the help of branch managers and wealth management staff also various bank reports. I
also conducted a survey regarding various parameters of wealth management and its services.
The survey included parameters like current knowledge about different investment
instruments, their risk appetite, Average duration for the investment, Awareness about Bank
Of Baroda products, Ratio of investment to income, Expected returns, frequency of
investment and what a customer expects from the wealth managers.
Based on the data analysed a few points were hypothesised.
 Investment amongst the age group of 25-30 is growing rapidly.

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  Young investors prefer higher risk investment as compared to older people.
 People expect more that 20% returns on theirs investments.
 People invest 2 times on an average per year.
 Some clients are averse from changing their investment even if it is strongly
recommended by their wealth managers.
 The traditional Fixed Deposit which used to be primary Investment is loosing its hold
even though it is almost risk free.
 People invest more in mutual funds by the way of systematic investment plan.
 Clients are less aware about Insurance Investment and their importance.
 Wide network of emerging and budding clients as a result of Bank Of Baroda merger
with Dena and Vijaya Bank.
 Bank Of Baroda is lagging behind in Wealth Management as compared to its main
competitors like ICICI Securities or HDFC Securities.
 Lack of creativity in designing a specific client oriented wealth management in Bank
of Baroda.
 Unavailability of popular wealth management scheme in Bank Of Baroda.

The main objective of this study includes a study to monitor the potential of wealth
management sector, finding the gaps which needs to be fulfilled in wealth management
services of Bank Of Baroda, Analysis and studying the behaviour of people, Have a general
idea about different asset classes available in thee market, Understanding the company’s
procedure in wealth management department,

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Company Background

Bank of Baroda is one of the leading commercial bank of India. Bank of Baroda is an Indian
multinational Banking services and financial institute (BSFI) company which is owned by
central government of India. It offers a wide array of services like deposits, retail and
corporate loans, Debit and Credit card services, Locker facilities, NRI services, foreign
currency credit, offshore banking and import and export finance. It also offers fee based
services like cash and wealth management and remittance services.
It was founded by Maharaja Sir Sayajirao Gaekwad III, The Maharaja of Baroda on 20 July
1908. The bank was nationalised on 19 July 1969 by Government of India along with 13
major commercial banks and has been designated as profit making public sector unit (PSU).
In 1908, Maharaja Sayajirao Gaekwad set up the bank with other experts of industry such as
Sampatrao Gaekwad, Ralph Whitenack, Vithaldas Thakersey, Tulsidas Kilachand and NM
Chokshi. After 2 years a branch in Ahmedabad was also established. The bank substantially
grew after World War II. In 1953 it grew internationally establishing its branch in Kenya in
Mombasa and Uganda. In 1957 it took a major leap step after establishing a branch in
London. In 1958 Bank Of Baroda acquired Hind Bank which was its first domestic
acquisition. The bank was nationalised in 1969.
Over the years it grew significantly now it has over 9500 branches and 13,400 ATMs it has
over 120 million plus customers. The bank has fully owned subsidies which include BOB
financial solution limited and BOB capital market. It also has a joint venture with IndiaFirst
Life Insurance service to provide Insurance service to its customers. The bank owns 98% of
share in The Nainital Bank and also sponsored three regional rural bank.
Moreover after the recent merger with Dena and Vijaya bank it has widened it’s scope over
more areas in India by using their existing customer base and infrastructure. All the assets
and liabilities of both the bank would merge with Bank of Baroda. As per the merger for
every 1000 shares held in Vijaya bank the shareholder would get 402 shares in Bank Of
Baroda. In case of Dena bank it would be 110 shares in favour or 1000 shares. After this
merger it would be the third largest lender after the State Bank Of India and ICICI Bank. This
merger would be effective from 1st April 2019.
The Bank Of Baroda logo is a unique representation of a universal symbol. It is called the
BOB rising Sun. The sun is an excellent representation of what the bank stands for. Just as
the rays of the sun reaches each and every corner of the earth Bank of Baroda strives to reach
each person in India which represents all inclusive financial inclusion.

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BALANCE SHEET

Particulars March 2019 March 2018

Equities and Liabilities
Shareholder’s Fund
Equity Share Capital 530.36 530.36
Total Share Capital 530.36 530.36
Reserves and Surplus 45,410.73 42,864.41
Total Reserves and 45,410.73 42,864.41
Surplus
Total Shareholders Fund 45941.10 43,394.77
Equity Share Application 5042.00 0
Money
Deposits 638,698.72 591,314.82
Borrowing 67,201.30 62,571.97
Other Liability and 24,113.29 22,718.21
Provisions
Total Capital and 780,987.40 719,999.77
Liabilities

Assets
Cash with Bank and RBI 26,661.73 22,699.64
Balance with bank money at 62,567.89 70,197.74
call and short notice
Investment 182,298.08 163,184.53
Advances 468,818.74 427,431.83
Fixed Assets 6,990.30 5,367.39
Other Assets 33,650.68 31,118.64
Total Assets 780,987.40 719,999.77
Contingent Liabilities,
Commitments
Bills For Collection 49,059.93 45,779.69
Contingent Liabilities 380,312.98 298,226.66

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Profit And Loss Statement

Particular 2018-19 2017-18

Interest Earned 49,974.11 43,648.54
Other Income 6,090.99 6,657.15
Total Income 56,065.10 50,305.69
Interest expended 31,290.30 28,126.77
Employee Cost 5,039.13 4,606.87
Selling and Admin Expenses 103.95 117.25
Depreciation 910.38 863.08
Miscellaneous Expenses 18,287.82 19,023.54
Preoperative Expenses 0.00 0.00
Capitalised
Operating Expenses 11,287.98 10,173.37
Provisions and 13,053.30 14,437.37
Contingencies
Total Expenses 55,631.58 52,737.51
Net Profit for the Year 433.52 -2,431.81
Extraordinary Items 0.00 0.00
Profit brought forward 0.00 0.00
Total 433.52 -2,431.81
Preference Dividend 0.00 0.00
Equity Dividend 0.00 0.00
Corporate Dividend Tax 0.00 0.00
Earnings Per Share (Rs) 1.64 -9.17
Equity Dividend (%) 0.00 0.00
Book Value (Rs) 173.66 163.64
Transfer to Statutory 433.52 -2,431.81
Reserves
Transfer to Other Reserves 0.00 0.00
Proposed Dividend/Transfer to 0.00 0.00
Govt
Balance c/f to Balance Sheet 0.00 0.00
Total 433.52 -2,431.81

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 INTRODUCTION

Background to the Problem

Wealth management is the process of managing the wealth of customers and clients
effectively. The excess income is invested in various market investments like shares, mutual
funds, debt securities, Insurance, and other securities. The main purpose is to increase the
current wealth and use it to suffix the future needs. Other purpose may also to save tax by
investing in various tax saving funds. It puts the current wealth into use. If the wealth remains
stagnant, its value would decline over a period of time. Like value of 10Rs would not be
same after 10 years ahead due to various external factors like market condition, inflation,
purchasing power of money and. Other factors. Thus wealth management puts the money to
use by investing in various marketable securities.
The client has various option to invest based on how much time he wants to invest and what
risk he is ready to take. Naturally higher the risk higher the return. And higher timeframe
higher the returns.
The steps in wealth management are
• Discovery
• Data gathering
• Analysing
• Recommendation
• Implementing
• Periodic review

Instruments in wealth management includes

• Shares and derivatives
• Debts and bonds
• Mutual fund
• Insurance
• LIC policies
Out of these shares and derivatives are most risky but have the highest returns. Government
securities and bonds carry the least risk but have less returns.

A proper investor must have a proper combination of each classes of these assets. Which
gives higher returns and also which are safe so that fluctuations in markets may not cause
much loss to the investor. Also he must regularly monitor his portfolio about the investment
which are losing its value over the period of time. Therefore must replace them with
alternative investment to prevent further losses

In India there are four main types of wealth management Providers Viz: Banks, Brokerage
Firms, Boutique Advisory Firms, and Professional individuals like CA and Part time bankers.

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The area of concern in my project is the wealth management service which is provided by
banks. Bank of Baroda have a wealth management team of its own which provide portfolio
management advisory to its customers.

The problem most of the people face is that they follow herd mentality, Hastily invest in
securities without studying about them, also get some wrong advices from friends and
families thereby losing their money.

Statement of the Problem

A wide range of investments alternative are available in the market for the investors to invest.
They fall into two main broad categories viz,. Financial Assets and Real Assets. Financials
Assets are those which are held in electronic or paper form. They normally are intangible.
They have a claim on the issuer like the government or corporate body. Financial Assets
include Shares, Debentures, Bonds, Mutual Funds, Insurance Policies and Derivative
Instruments.
Real Assets are in Physical form i.e. they are tangible. They include Residential houses,
livestock, plantations, gold, precious stones and art objects. As the economy improves their
value also increases.
The above two forms of investment are complimentary and competitive. For investment
purpose we must be familiar with features of each type of investment also the returns and the
risk each investment carries. This helps an investor to chalk out the investment alternatives
which are suitable for him according to his risk appetite and the percentage of returns he
wants in that particular time.

Wealth Management Process

Wealth management involves various steps. It involves preparation of special plan to fulfil
the goals of clients. The following are the steps involved.

1. Specification of investment and the constrains on the investor

A typical wealth management objective sought by most of the investors are capital
appreciation, safety of the principal amount, regular income and tax saving. These
objectives must be specified further for the constrains arising like the liquidity, time
horizon and the risk appetite.

2. Quantification of capital market expectation

A proper asset mix should be addressed to question our relative long term estimate of
return and risk of various asset classes. We have to quantify the capital market future
expectations.

3. Choice of asset mix

This is the most important decision to be made to select a proper asset mix. An asset
mix may constitute of more securities which may carry high risk and high returns

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 assets. Also some assets may be for a longer duration of time like fixed deposits and
their maturity time may differ. So the liquidity factor must also be taken into
consideration.

4. Formulation of Portfolio Strategy

Once all the above steps are completed the next steps is to decide the portfolio
strategy. The strategy may be a dynamic strategy or a stagnant strategy. A dynamic
strategy tends to earn superior returns by adjusting to market conditions, sector
rotation. Stagnant strategy involves holding a diversified portfolio and maintaining a
pre-determined level of risk exposure.

5. Selection of the securities

Generally investors pursue an active stance while selection of an asset. Like the credit
rating of that asset. Yield to maturity, tax shelter, liquidity factor and other various
parameter.

6. Portfolio Execution
In this phrase the investor executes the plan by placing an order for the security.
Completing the paperwork etc.

7. Performance evaluation
A periodic evaluation is made to check how the asset is performing. Whether there is
any deviation from the expected performance. Usually a periodic data is sent to client
to show the performance of the portfolio.

Wealth management offers the following services

 Investment Planning
 Retirement Planning
 Tax Planning
 Estate Planning
 Business Planning

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Literature Review

The need of this study is to determine and compare the various investment alternative which
are available in the market for managing your wealth. This study helps us to find the best
alternative based on different parameters like risk, liquidity, timeframe and returns. There are
various classes of assets like shares, mutual funds, debentures, bonds and insurance policies.
The literature used for the study includes various policy papers and scheme papers of mutual
funds and life insurance, Data available on Money control and Investopedia and banking
websites. The books referred were Investment Analysis and Portfolio Management by
Prasanna Chandra and Corporate Valuation by Ashwath Damodaran.

The Data provided in various pamphlets of the respective Asset Management Companies and
Insurance Companies provided the historical data and returns over the years also the size of
the investment and their classification. Using the data I was able to evaluate the best multual
fund portfolio using various ratios like treynor’s and sharpe ratios.

Treynor ratio
It is also known as reward to volatility. It measures how much excess return was
Generated for each unit of risk taken by a portfolio.
Treynor ratio = portfolio return – risk free return / portfolio beta

Sharpe ratio
It is also known as the sharpe index. The ratio measures excess returns per unit of
Deviation in an investment.
Sharpe ratio is calculated as portfolio return – risk free return / standard deviations
It is similar to the treynor ratio except it takes into consideration standard deviation.

Besides for evaluation different factors like the performance of asset under Bear market and
Bull market was also taken into consideration. Their standard deviation and differences in
performances over the year.

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Objectives of Study

 Things which are offered in wealth management

 Investment planning – Assisting investors in investing their money into
various investment markets to achieve their financial goals.
 Insurance Planning – Assisting in buying protection against any unforeseen
events to protect your future.
 Retirement Planning – To fulfil your old age needs when your regular income
or salary stops.
 Tax Planning - To minimise tax liability by identifying and investing in tax
saving fund.
 To classify the assets according to different parameters.
 To find the best available alternative investment mix in the market.
 To study the sentiments and mind sets of clients regarding different assets and
investments
 To study various guidelines in relation to investments ( Example: SEBI, IRDA, RBI
act)
 To identify the different approach in wealth management like
 Fundamental approach – To establish intrinsic value of a security by analysing
the fundamental factors relating to company, industry and economy
 Psychological approach – To identify the psychological mood of the investors
based on emotions rather than reasons.
 Academic Approach – In the capital market to identify the expected return
from a security based on market risk.
 Eclectic Approach – Based on the above three approaches.
 To evaluate different portfolio using different ratios like treynor and sharpe ratio.
 To protect the interest of investor

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Research Design

The type of research used in this study is mainly quantitative research design. This is
because it uses statistical data to develop a hypothesis. It uses numerical data to come
to any conclusion. Like comparative analysis between 2 mutual funds, their yearly
return and percentage of investment under each asset class. Plus it is also an
exploratory design.
Some aspects of research is based on qualitative data like analysing the mind set of
people while choosing any investment. Their partiality towards a particular
investment. Particular biases above a company etc. The numerical data is compared
with the past historic data or evaluated by using various financial ratios like treynor
ratio and sharpe ratio. The data is also analysed for any regression or any deviation.
The cause of such regression is then studied.
The project timeline was for 8 week during May to June end. The research was
conducted in the bank branch of Bank of Baroda Tilak Nagar during normal banking
hours. I interacted with the bank staff and also with their regular customers.
Both type of data was used for developing a report viz. Primary as well as Secondary
data. Primary data was obtained by interaction and interviewing with the customers,
Bank Staffs and observations. Secondary data was obtained by reference to various
company pamphlets, websites, and information brochure.
The questionnaire developed was in relation to obtain the qualitative as well as the
quantitative data.
The quantitative data included parameters like
 Expected return from an investment
 Timeframe for an investment
 Total no of time you invest in an year
 Total amount you invest
The numbers obtained from it would be then helpful for analysis the statistical aspect
of the problem regarding the investment alternatives.

The qualitative data included aspects like

 The most preferred type of investment
 Factors while choosing an investment
 Things which you expect from an investment advisor
 View about not so popular insurance investments
The sample survey included about 100 people from the branch which included regular
customer and 60 surveys that were collected via a google form which was shared via
whatsapp. The sampling technique used was simple random technique and online
interviewing technique.

The limitations of this study was that only limited data was available. I had To rely on
the data which was available on the internet for comparative study of different AMCs

15
Plus the data on return on investment was a historic data. The sample which was
interviewed may not represent the whole population.

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 Data Analysis

Different Alternative In The Market For Wealth Management

Investment Option Maximum Minimum Minimum Investment Period

Amount Amount

Equity Shares No Limit No Limit Not Applicable

Mutual Funds No Limit 500 Rs. Applicable in case of ELSS and

Close Ended Funds.

No limit Variable Variable according to schemes

Bonds according to
scheme
15,00,000 Rs. 1000 Rs. Variable
Fixed Deposit PM

Real estate No limit No limit No Limit

investment

Gold ETF No Limit No Limit No limit

Post office scheme 4,50,000 1,500 5 years maturity

IPO No Limit No Limit Not applicable

ULIPS No limit 45 years or below for most plans

,1,00,000

PPF 1,50,000 PY 500 PY 15 Years

Saving bank deposit No limit 2000-10,000 No limit

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 Analysing the investment instruments in detail

1. Bank Deposits: Traditionally banks in India have 4 main types of deposit accounts,
ie. Saving Banking Accounts, Current Accounts, Fixed Deposits and Recurring
Deposits

I. Current Account: Current Accounts are used by businessmen and are less used
for the purpose of investment. There is no limits for number of transactions or the
amount of transactions in a day.

II. Savings Account: These accounts are one of the most popular amongst
individuals. They provide cheque facility and also provide a lot of flexibility for
deposits and withdrawal of amounts from the account. Most banks have some
rules for the maximum number of withdrawals in a period and the maximum
amount one can withdraw. Banks themselves can decide the interest rates on
savings deposits. In no frills account there is no minimum requirement of balance.

III. Recurring Deposit Account: These are popularly known as RD accounts. These
accounts are suitable for people who do not keep the money deposited in the bank
for a longer period of time. But one have to mandatorily deposit the agreed
amount each month otherwise it attracts penalty. They earn interest per month.

IV. Fixed Deposit Account: Fixed deposit are a type of deposit account where you
can deposit your money for a particular period of time. During that tenure you
cannot withdraw the money. Fixed deposit tenure ranges from 7 days to 5 years
with interest rate varying according to different bank and the period to which it is
invested. Generally private and foreign banks gives higher rate of return for fixed
deposit.

2. Mutual Funds: Mutual fund invest the money pooled by large investors into different
market funds. They are managed by professional fund investors, who uses their fund
management skills to invest in funds.
As an investor you represent the small portion of the fund you hold as an investment.
Thus an investor is known as a unit holder.
The different type of mutual funds are
 Equity fund
 Debt fund
 Money market fund
 Balanced or hybrid fund
 Gilt fund
 FMP Plan

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Types of mutual funds

I. Open-Ended – This type of scheme allows buyers to buy or sell units at any point
in time. The buyers can buy and sell at the current NAV price. The delivery is
usually after 2 days after placing the order.

1. Debt/Income funds
In this type of fund the amount is invested in securities which are of debt and
Government security class. This type of funds fluctuate less and have low
returns but the risk factor is also low.
Example of debt mutual funds are

Scheme Name 1 Year return 5 years return

Aditya Birla SL 7.92% 8.43%
Floating rate fund
Aditya Birla SL 8.05% 8.50%
Savings Fund
ICICI Pru Savings Fund 7.56% 8.31%

2. Money Market/Liquid Fund

This type of fund is most suitable for an investor who want to invest for a
shorter duration of time. This scheme invest in short liquid and debt fund and
provide reasonable returns to the investor.

Fund NAV 1 month 3 month

Aditya Birla Sun 254.901 0.7 2.1
Life Money
Manager Fund

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 UTI Money 2,140 0.7 2.1
Market Fund
Kotak Money 3,142 0.7 2.1
Market Scheme
ICICI Pru Money 268.462 0.7 2.0
Market Fund
L&T Money 18,2604 -1.6 -0.8
Market Fund
Reliance Money 2921 0.7 2.1
Market Fund

3. Equity/ Growth fund

These are popular among the most retail group of investor. It is a kind of high risk high return
type of fund.
There are different type of Equity/Growth funds
 Index funds – which follows the moment of the index particularly sensex or nifty.
Investment in this type of fund is advised as sensex is expected to cross 50,000 plus in
near future
Examples are
fund NAV 3 months return 6 months return
Reliance Index 19.2047 4.4 11.1
Fund –SENSEX
SBI Nifty Index 101.108 4.1 10.9
Fund

 Sectoral fund scheme – They invest in specific sectors like infrastructure or real
estate. They provide high return with high risk
Examples are
Fund NAV 3 Months 6 Months
IDFC Infrastructure 16.25 3.4 4.3
fund
Aditya Birla 26.56 6 11
Banking and
financial services
fund
Frankin Build India 38.3452 4 .2
Fund
Reliance Power 100.74 4.2 5.7
And Infra Fund

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  Tax Saving Mutual Fund
The main aim this type of mutual fund is to save tax liability. They offer long time
growth opportunity. They have 3 years lock in period
Examples are
Fund 1 Year 3 Year 5 Year
Aditya Birla Sun 1.19 13.55 15.36
Life tax Relief
Fund
Axis Long Term 7.45 15.21 17.36
Equity Fund
TATA India Tax 9.80 15.32 16.89
Saving Fund
Invesco India Tax 5.08 14.59 15.82
Plan
Kotak Tax Saver 13.46 15.82 15.32

4. Balanced fund
These type of fund invest in both equities as well as fixed income securities. The proportion
is pre-determined and is disclosed in the offer document. They are also known as hybrid
funds. It is ideal for casual aggressive investor
Examples of Balanced Fund are

Fund 3 Month 6 Month 1 Year

Mirae Asset Hybrid 3.79 9.59 13.32
Equity

LIC MF Hybrid Fund 4.61 8.71 12.41

BNP Paribas 5.23 9.68 11.60

Substantial Equity
Hybrid Fund

Mirae Asset Hybrid 3.32 8.65 11.54

Equity

ICICI Pru Equity and 3.12 8.58 10.79

debt Fund

SBI Equity Hybrid 4.33 8.95 10.58

Fund

21
INSURANCE

Insurance is an investment tool in which the insured transfers his risk or a potential loss to an
insurance company that would mitigate any loss arising in the future in exchange of a
monetary compensation which is known as an insurance premium.
More than 20 companies offer different product for insurance. In order to choose a suitable
policy one needs to know each and every benefit that a policy offers. IRDA is the regulatory
body of insurance in India for supervision and development.
There are basically 2 types of insurance
 Life Insurance
 General Insurance
Any insurance other than life insurance is known as general insurance. Nowadays companies
make contract ranging from one year to maximum five years. Vehicle Insurance, Marine
Insurance, Fire Insurance etc fall into the category of general insurance.
In India ICICI Lombard HDFC Ergo SBI LIFE TATA AIG etc provide good general
insurance scheme.
Life insurance is the most popular type of insurance. It pays the insured amount plus the
interest to the beneficiaries in case of an unforeseen event like death, illness, accident or
critical illness.
The risk that a Life Insurance Covers are.
 Death
 Illness
 Income During Retirement
Life insurance can be classified as whole life plan, endowment, term plan, money back plan
and Unit Linked Insurance Plan (ULIP).

1. Whole-Life Plan – The Company collects the premium from the insured person till
retirement or till the end of the policy and repays the claims to the person or the
nominee only after the death of the insured person. This helps the family to survive
better after the death of the dependent person.

2. Endowment – Insurance Company collects premium form the client for a certain
period of time like 15to30 years. Company pays the assured sum to the respected
nominee in case of death of the insured during the policy period or pays the premium
paid by the insured with fix returns to the insured.

3. Money back – This policy is known as the wealth generation plan. The policy is
useful for those investor who needs periodical income. The insurance company
collects premium for a certain period of time which is called premium payment term,
and pays percentage of sum assured to the insured on regular interval. If insured dies
during the policy term, insurance company pays sum assured and accrued bonus to the
nominees

22
4. Term plan – In case of a term insurance, insurer pays regular premium to cover his
death risk. Insured does not get anything from the insurance company if he survives
till the end of policy term. The premium paid for term cover goes to the company. The
good part of this plan is, insured gets back his premium amount with minimum
premium. There is no term plan as of now in India.

5. ULIP – it is a new type of insurance which is a mix of investment plus insurance.

Insurance companies collects premium from different clients and invest the same into
equity and debt markets or ULIP Fund. The returns generated by this investment are
passing on to the inventors at the end of the tenure of the policy. The insured person
gets the benefit of risk cover as well as the profit which is gained on the investment.
The product offers the flexibility of partial withdrawal after certain period of premium
payments. In case of death of Insured, the nominee gets the sum assured or fund
value, whichever is higher.

TABLE Illustrating DIFFERENT INSURANCE SCHEMES

Insurance Grievances Claim Sum assured Max Maturity
Provider Solved Settlement Minimum Age
Ratio
HDFC LIFE 94% 82.86% No limit 75 Years
Reliance Life 98% 83.60% 120 crores 65 Years
Insurance
MAX Life 93.96% 96.36% 10 crores 70 Years
Insurance
Bharti AXA 93.58% 80.82% No limit 65 years
Life Insurance
AVIVA Life 100% 84.97% No limit 70 years
Insurance
Bajaj Allianz 98.98% 91.88% No limit 70 years
Life Insurance
SBI LIFE 99.88% 89.50% No limit 70 years
IDBI Federal 100% 75.80% 30 crore 75 years
Life Insurance
PNB Metlife 99.85% 92.86% 10 crore 75 years
Life Insurance
ICICI Pru Life 99.45% 93.80% 15 crore 65 years
Insurance
Birla Sunlife 99.95% 95.30% No limit 80 years
Insurance
Future 94.98% 87.70% No limit 75 years
Generalli
Insurance

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 Edelweiss 93.58% 57.14% No limit 80 years
Tokyo Life
insurance
Aegon Life 93.66% 90.50% 75 years
Insurance

3. Health Insurance
It is an insurance policy which takes care about the expenses which are incurred for availing
any healthcare or medical treatment at hospital in exchange of yearly premium. Additional
benefits include medical check-ups, cashless treatment and post and pre hospitalisation
expenses.
Availing health insurance policy allows you get benefit of tax liability. The premium paid
towards the health insurance helps to reduce the annual tax liability. It comes under section
80D of Income Tax Act, 1961.

The different types of health insurance policy in India

 Individual Policy
 Family Floater Policy
 Critical Illness cover Policy
 Pre-existing Disease Cover Health policy
 Senior Citizen Policy
 Personal Accidental Cover Policy
 Maternity Policy

A brief Overview of Different health provider companies

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GOVERNMENT SERVICES

There are many scheme started by the Central Government as well as the respective State
Government to provide financial stability to its citizen and also to provide the fruits of
economic development to its citizens also to provide financial aids to weaker section of the
society in form of Jandhan bank accounts and health schemes like Ayushman Bharat.

As in the below table shows Post Office Scheme Started By the government. Which have
different tenure and different minimum amount required.

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The above table describes the senior citizen Savings Scheme which Have higher rate of
interest as compared to normal saving scheme deposits. The deposit can be for a maximum
of 15 years. This scheme also provides benefits under Section 80C for reducing the tax
liability

The last annexure in the table describes the 15 year PPF where any individual can invest in a
PPF the amount remains there for 15 years and you get the principal along with interest ie.
8.60% per annum.

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The first annexure in table explains about NSC ie. National Savings Certificate which have
an interest rate of 8.1% for 5 years which is compounded yearly the minimum deposit
is 100 and maximum is 1,000

The second annexure in table explains about kisan vikas patra scheme in which the invested
amount doubles in 110 months ie. 9 years and 2 months minimum deposit is rs 10,000 and
there is no maximum limit.

The second annexure explains the sukanya samriddhi which is for the benefit of the girl child
the minimum amount is 1000rs and maximum is 1.5 lakh The deposit is to be made in lump
sum. The account can be opened till the birth of girl child till she is 10 years of age. The
account can be closed after the girl attends 21years of age

The third annexure explains the investment in gold sovereign bond. The interest is paid
2.75% semi-annually. However the interest is taxable.

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Investment in Stocks and Shares

Investment in stock is good option to get good returns in a shorter period of time. They have
the best chance for returns if chosen wisely. Stocks represent a part of company. You make
direct purchase of a stock of a company which you feel would do better in future.
It has been time proven that investment in good quality company shares have given good
returns. They are known as blue-chip funds.
You can also invest in shares of a foreign country which are under FEMA.
There are 4 main kind of stock
 Growth Stock- They have a potential for growth. They are usually emerging
companies stock but they possess a higher risk of loss.
Company Expected target Returns%
Phoenix Mills 732 21
MindTree 1000 15
Shalby 275 26
Vedanta 425 47
DCB Bank 250 27

 Dividend Stock-They give more dividend returns. The growth rate of stock is slow
though as they have progressed over the year. They are usually large cap companies
with higher capitalisation.
Company Last Price Latest Dividend %
Graphite India 341.25 2,750
Nalco 50.25 114
Vedanta 176.90 1185
ILandFS 4.00 30
UFO Moviez 189.65 300
Reliance Capital 70.70 110

 New Issue Stock – These kind of stock are issued for the first time via an Initial
Public Offer. They have a potential for growth.
Company Issue Price Current Price % gain/loss
Polycab 538 612.95 13.93
Rail Vikas 19.00 27.70 45.79
Evans Electric 52 193.95 272.98
Artemis 60 96.98 61.33
V R Films 61 100 61.93

 Defensive Stock- These kind of stock do not fluctuate in times of a big market crash.
They remain stagnant over a period of time.
o HeroHonda
o Maruti Suzuki
o Cipla
o Infosys
o Bharat Petroleum

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Real Estate Investment

Real estate is a fast growing sector in India, which holds huge prospectus in Hospitality,
Manufacturing, Commercial, and retails. Buying a housing property in good metropolitan city
is good option as the property rates are over increasing. But in case of few it may not be
possible to invest in property to funds constraint so in that case a buyer can buy real estate
mutual funds which invest in mutual funds property.
Aditya Birla Real estate mutual Fund has an annualised growth of 6.16% with an NAV of
18.47

Investment in Gold

Gold is one of the first evergreen investment which has been a tool for investment over the
years.
If you are looking for gold investment you can opt for Gold ETF, Gold Mutual Fund, Gold
Bar and Gold Deposit scheme.

The below are the Top 5 GOLD ETF Fund.

INVESTMENT IN BONDS

People who are vary of investing in mutual funds or shares can invest in bonds which actually
provide higher rate of returns than a normal saving bank deposit. There are many good bonds
available in the market. One can expect a decent returns of about 7.70% per year for a 10
years bond deposit. These types of bond are under regulation of government of India.

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Bank Of Baroda Wealth Management

Bank of Baroda is a leading bank which also provides wealth management services. It also
provides its own products for wealth management.
The various products available for wealth management in bank of Baroda

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