Beruflich Dokumente
Kultur Dokumente
In
Topic
Investment Strategies
of General Public
&
Comparative Analysis of
Mutual Funds and ULIPs
By
Ashish Chatrath
PGDM- (07-09)
FT-07-529
1
Table of Contents
2
Acknowledgment
Ashish Chatrath
3
Synopsis
4
BANKING IN INDIA
5
Structure of the Organized Banking Sector in
India
6
Early History:
At the end of late-18th century, there were hardly any banks in
India in the modern sense of the term. At the time of the American
Civil War, a void was created as the supply of cotton to Lancashire
stopped from the Americas. Some banks were opened at that time
which functioned as entities to finance industry, including
speculative trades in cotton. With large exposure to speculative
ventures, most of the banks opened in India during that period
could not survive and failed. The depositors lost money and lost
interest in keeping deposits with banks. Subsequently, banking in
India remained the exclusive domain of Europeans for next several
decades until the beginning of the 20th century.
(The Bank of Bengal, which later became the State Bank of India.)
7
were owned and operated by particular communities. The banking
in India was controlled and dominated by the presidency banks,
namely, the Bank of Bombay, the Bank of Bengal, and the Bank of
Madras - which later on merged to form the Imperial Bank of
India, and Imperial Bank of India, upon India's independence, was
renamed the State Bank of India. There were also some exchange
banks, as also a number of Indian joint stock banks. All these
banks operated in different segments of the economy. The
presidency banks were like the central banks and discharged most
of the functions of central banks. They were established under
charters from the British East India Company. The exchange
banks, mostly owned by the Europeans, concentrated on financing
of foreign trade. Indian joint stock banks were generally under
capitalized and lacked the experience and maturity to compete with
the presidency banks, and the exchange banks. There was potential
for many new banks as the economy was growing. Lord Curzon
had observed then in the context of Indian banking: "In respect of
banking it seems we are behind the times. We are like some old
fashioned sailing ship, divided by solid wooden bulkheads into
separate and cumbersome compartments."
8
During the Wars
The period during the First World War (1914-1918) through the
end of the Second World War (1939-1945), and two years
thereafter until the independence of India were challenging for the
Indian banking. The years of the First World War were turbulent,
and it took toll of many banks which simply collapsed despite the
Indian economy gaining indirect boost due to war-related
economic activities. At least 94 banks in India failed during the
years 1913 to 1918 as indicated in the following table:
1913 12 274 35
1915 11 56 5
1916 13 231 4
1917 9 76 25
1918 7 209 1
9
Post-Independence
The partition of India in 1947 had adversely impacted the
economies of Punjab and West Bengal, and banking activities had
remained paralyzed for months. India's independence marked the
end of a regime of the Laissez-faire for the Indian banking. The
Government of India initiated measures to play an active role in
the economic life of the nation, and the Industrial Policy
Resolution adopted by the government in 1948 envisaged a mixed
economy. This resulted into greater involvement of the state in
different segments of the economy including banking and finance.
The major steps to regulate banking included:
10
Nationalisation
By the 1960s, the Indian banking industry has become an
important tool to facilitate the development of the Indian economy.
At the same time, it has emerged as a large employer, and a debate
has ensued about the possibility to nationalize the banking
industry. Indira Gandhi, the-then Prime Minister of India expressed
the intention of the GOI in the annual conference of the All India
Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalisation." The paper was received with positive
enthusiasm. Thereafter, her move was swift and sudden, and the
GOI issued an ordinance and nationalised the 14 largest
commercial banks with effect from the midnight of July 19, 1969.
Jayaprakash Narayan, a national leader of India, described the step
as a "masterstroke of political sagacity." Within two weeks of the
issue of the ordinance, the Parliament passed the Banking
Companies (Acquition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9th August, 1969.
After this, until the 1990s, the nationalized banks grew at a pace of
around 4%, closer to the average growth rate of the Indian
economy.
11
Liberalisation
In the early 1990s the then Narsimha Rao government embarked
on a policy of liberalization and gave licenses to a small number of
private banks, which came to be known as New Generation tech-
savvy banks, which included banks such as Global Trust Bank (the
first of such new generation banks to be set up) which later
amalgamated with Oriental Bank of Commerce, UTI Bank(now re-
named as Axis Bank), ICICI Bank and HDFC Bank. This move,
along with the rapid growth in the economy of India, kick started
the banking sector in India, which has seen rapid growth with
strong contribution from all the three sectors of banks, namely,
government banks, private banks and foreign banks.
The next stage for the Indian banking has been setup with the
proposed relaxation in the norms for Foreign Direct Investment,
where all Foreign Investors in banks may be given voting rights
which could exceed the present cap of 10%,at present it has gone
up to 49% with some restrictions.
Current Situation
Currently (2008), banking in India is generally fairly mature in
terms of supply, product range and reach-even though reach in
12
rural India still remains a challenge for the private sector and
foreign banks. In terms of quality of assets and capital adequacy,
Indian banks are considered to have clean, strong and transparent
balance sheets relative to other banks in comparable economies in
its region. The Reserve Bank of India is an autonomous body, with
minimal pressure from the government. The stated policy of the
Bank on the Indian Rupee is to manage volatility but without any
fixed exchange rate-and this has mostly been true.
Deregulation:
This continuous deregulation has made the Banking market
extremely competitive with greater autonomy, operational
flexibility, and decontrolled interest rate and liberalized norms for
foreign exchange. The deregulation of the industry coupled with
decontrol in interest rates has led to entry of a number of players in
the banking industry. At the same time reduced corporate credit off
14
take thanks to sluggish economy has resulted in large number of
competitors battling for the same pie.
New rules:
As a result, the market place has been redefined with new rules
of the game. Banks are transforming to universal banking, adding
new channels with lucrative pricing and freebees to offer. Natural
fall out of this has led to a series of innovative product offerings
catering to various customer segments, specifically retail credit.
Efficiency:
This in turn has made it necessary to look for efficiencies in the
business. Banks need to access low cost funds and simultaneously
improve the efficiency. The banks are facing pricing pressure,
squeeze on spread and have to give thrust on retail assets
Misaligned mindset:
These changes are creating challenges, as employees are made to
adapt to changing conditions. There is resistance to change from
employees and the Seller market mindset is yet to be changed
coupled with Fear of uncertainty and Control orientation.
Acceptance of technology is slowly creeping in but the utilization
is not maximised.
Competency Gap:
15
Placing the right skill at the right place will determine success. The
competency gap needs to be addressed simultaneously otherwise
there will be missed opportunities. The focus of people will be on
doing work but not providing solutions, on escalating problems
rather than solving them and on disposing customers instead of
using the opportunity to cross sell.
16
Improving the asset quality as per Basel II norms
State Bank of India, with its seven associate banks commands the
largest banking resources in India. SBI and its associate banks are:
17
After the amalgamation of New Bank of India with Punjab
National Bank, currently there are 20 nationalized banks in India:
• Allahabad Bank
• Andhra Bank
• Bank of Baroda
• Bank of India
• Bank of Maharashtra
• Canara Bank
• Central Bank of India
• Corporation Bank
• Dena Bank
• Indian Bank
• Indian Overseas Bank
• Oriental Bank of Commerce
• Punjab & Sind Bank
• Punjab National Bank
• Syndicate Bank
• Union Bank of India
• United Bank of India
• UCO Bank
• Vijaya Bank
18
• Ganesh Bank of Kurundwad
• HDFC Bank
• ICICI Bank
• IndusInd Bank
• ING Vysya Bank
• Jammu & Kashmir Bank
• Karnataka Bank Limited
• Karur Vysya Bank
• Kotak Mahindra Bank
• Lakshmi Vilas Bank
• Lord Krishna Bank ( now Centurion Bank of Punjab)
• Nainital Bank
• Nedungadi Bank (now Punjab National Bank)
• Ratnakar Bank
• Rupee Bank
• Saraswat Bank
• SBI Commercial and International Bank
• South Indian Bank
• Tamilnad Mercantile Bank Ltd.
• Thane Janata Sahakari Bank
• Bassein Catholic Bank
• United Western Bank( now IDBI Bank)
• YES Bank
Foreign banks
• ABN AMRO Bank N.V.
• Abu Dhabi Commercial Bank Ltd
• American Express Bank
• Antwerp Diamond Bank
• Arab Bangladesh Bank
• Bank International Indonesia
• Bank of America
19
• Bank of Bahrain & Kuwait
• Bank of Ceylon
• Bank of Nova Scotia
• Bank of Tokyo Mitsubishi UFJ
• Barclays Bank
• BNP Paribas
• Calyon Bank
• ChinaTrust Commercial Bank
• Cho Hung Bank
• Citibank
• DBS Bank
• Deutsche Bank
• HSBC (Hongkong & Shanghai Banking Corporation)
• JPMorgan Chase Bank
• Krung Thai Bank
• Mashreq Bank
• Mizuho Corporate Bank
• Oman International Bank
• Société Générale
• Standard Chartered Bank
• State Bank of Mauritius
• Scotia
• Taib Bank
Total: 88 Banks.
20
• Banaskantha Mehsana Gramin Bank
• Bareilly Kshetriya Gramin Bank
• Baroda Uttar Pradesh Gramin Bank
• Bijapur Grameena Bank
• Bilaspur-Raipur Kshetriya Gramin Bank
• Bolangir Anchalik Gramya Bank
• Bundelkhand Kshetriya Gramin Bank
• BundiChittorgarh KshetriyaGraminBank
• Cauvery Grameena Bank
• Chaitanya Grameena Bank
• Chambal Kshetriya Gramin Bank
• Champaran Kshetriya Gramin Bank
• Chhatrasal Gramin Bank
• ChhindwaraSeoniKshetriyaGraminBank
• Chitradurga Gramin Bank
• Cuttack Gramya Bank
• Damoh Panna Sagar Kshetriya Gramin Bank
• Devipatan Kshetriya Gramin Bank
• Dhenkanal Gramya Bank
• Dungarpur Banswara Kshetriya Gramin Bank
• Ellaquai Dehati Bank
• Farrukhabad Gramin Bank
• Gaur Gramin Bank
• Gurgaon Gramin Bank
• Hadoti Kshetriya Gramin Bank
• Himachal Gramin Bank
• Hissar-Sirsa Kshetriya Gramin Bank
• Indore Ujjain Kshetriya Gramin Bank
• Jaipur Nagaur Aanchalik Gramin Bank
• Jamnagar Rajkot Gramin Bank
• Jamuna Gramin Bank
• Jhabua-Dhar Kshetriya Gramin Bank
• Kakathiya Grameena Bank
• Kalpatharu Grameena Bank
• Kamraz Rural Bank
21
• Kanpur Kshetriya Gramin Bank
• Kapurthala Ferozpur Kshetriya Gramin Bank
• Kashi Gomti Samyut Gramin Bank
• Kisan Gramin Bank,Budaun
• Kolar Gramin Bank
• Krishna Grameena Bank
• Kshetriya Gramin Bank, Hoshangabad
• Kutch Grameen Bank
• Malaprabha Grameena Bank
• Mandla Balaghat Kshetriya Gramin Bank
• Manjira Grameena Bank
• Marwar Ganganagar Bikaner Gramin Bank (Previously :
Marwar Gramin Bank)
• Mewar Aanchalik Gramin Bank
• Nagarjuna Grameena Bank
• Netravati Grameena Bank
• Nimar Kshetriya Gramin Bank
• North Malabar Gramin Bank
• Panchmahal Vadodara Gramin Bank
• Pandyan Grama Bank
• Pinakini Grameena Bank
• Pragjyotish Gaonlia Bank
• Prathama Bank
• Raigarh Kshetriya Gramin Bank
• Rani Lakshmi Bai Kshetriya Gramin Bank
• Ratlam Mandsaur Kshetriya Gramin Bank
• Rayalaseema Grameena Bank
• Rewa-Sidhi Gramin Bank
• Sahyadri Gramin Bank
• Samyut Kshetriya Gramin Bank
• Sangameshwara Grameena Bank
• Shahjahanpur Kshetriya Gramin Bank
• Shivpuri Guna Kshetriya Gramin Bank
• South Malabar Gramin Bank
• Sree Anantha Grameena Bank
22
• Sri Saraswati Grameena Bank
• Sri Visakha Grameena Bank
• Surat Bharuch Gramin Bank
• Thar Aanchalik Gramin Bank
• Tripura Gramin Bank
• Tungabhadra Gramin Bank
• Vidur Gramin Bank
23
vast network in India and overseas
India's second largest private sector bank and is now the
The Federal Bank Limited
largest scheduled commercial bank in India
Bank which started as private shareholders banks,
Imperial Bank of India
mostly Europeans shareholders
The first Indian bank to open a branch outside India in
Bank of India, founded in
London in 1946 and the first to open a branch in
1906 in Mumbai
continental Europe at Paris in 1974
The oldest Public Sector Bank in India having branches
all over India and serving the customers for the last 132 Allahabad Bank
years
The first Indian commercial bank which was wholly
Central Bank of India
owned and managed by Indians
Company Profile
24
Despite its British base, it has few customers in the United
Kingdom and 90% of its profits come from Asia, Africa,
and the Middle East. Because the bank's history is entwined
with the development of the British Empire its operations
lie predominantly in former British colonies, though over
the past two decades it has expanded into countries that
have historically had little British influence. It aims to
provide a safe regulatory bridge between these developing
economies.
It now focuses on consumer, corporate, and institutional
banking, and on the provision of treasury services—areas
in which the Group had particular strength and expertise.
Standard Chartered is listed on the London Stock Exchange
and the Hong Kong Stock Exchange and is among the top
25 constituent members of the FTSE 100 Index.
History
The name Standard Chartered comes from the two original banks
from which it was founded—The Chartered Bank of India,
Australia and China, and The Standard Bank of British South
Africa.
25
In those early years, both banks prospered. Chartered opened its
first branches in Bombay, Calcutta and Shanghai in 1858, followed
by Hong Kong and Singapore in 1859. With the opening of the
Suez Canal in 1869 and the extension of the telegraph to China in
1871, Chartered was well placed to expand and develop its
business.
Each had acquired other small banks along the way and spread
their networks further. In 1969, the banks decided to merge, and to
counterbalance their existing network by expanding in Europe and
the United States, while continuing their expansion in their
traditional markets in Asia and Africa. All appeared to be going
well, when in 1986 Lloyds Bank of the United Kingdom made a
hostile takeover bid for the Group.
26
their commitments. It also began a series of divestments notably in
the United States and South Africa, and entered into a number of
asset sales.
On 15th April 2005, the bank acquired Korea First Bank, beating
HSBC in the bid. Since then the bank has rebranded the branches
as SC First Bank.
27
renaming the new entity Standard Chartered Bank (Thailand).
Standard Chartered also formed strategic alliances with Fleming
Family & Partners to expand private wealth management in Asia
and the Middle East, and acquired stakes in ACB Vietnam,
Travelex, American Express Bank in Bangladesh and Bohai Bank
in China.
28
offers broking, wealth management and investment banking
services across 60 Indian cities.
Position today
Today, the bank is a leading player throughout the developing
world.
29
Standard Chartered Global Presence
30
Africa • Laos
• Tanzania • Macus • UK
• Uganda • Malaysia
• Zambia • Mauritius
• Nepal
• Zimbabwe • Pakistan
• Philippines
• Singapore
• South Korea
• Sri Lanka
• Taiwan
• Thailand
• Vietnam
31
Listed on both the London Stock Exchange and the Hong Kong
Stock Exchange, Standard Chartered PLC is consistently ranked in
the top 25 FTSE 100 companies by market capitalization.
Special features:
32
Besides Economic contribution the bank provides services to
protect environment, spread social benefits of economic growth
and contributes to better governance.
INTEREST RATES
33
In case you need to withdraw amounts in excess of what is
available in your transaction account, we will break your deposit
for the exact amount you require. The rest of the deposit continues
earning the original high interest.
34
Core Service: Standard Chartered is listed on both the London
Stock Exchange and the Stock Exchange of Hong Kong and is in
the top 25 FTSE-100 companies, by market capitalization.
TRANSFORMATION
The Bank clearly states its commitment to making a difference in
the communities in which it operates. Evidence of this is
demonstrated on the company’s website through the wide array of
community projects it is engaged in, across the world.
35
Community investment in emerging markets
Just some of the projects that the Bank has engaged in within
this partnership:
SOCIAL RESPONSIBILITIES
36
having to deal with the effects of HIV / AIDS in their
communities and other education-focused programmes.
The Bank has been recognized for its efforts through awards and
external recognition. The company has begun taking a more
strategic approach to its activities through more careful
measurement and monitoring of activities. This is ensuring it
delivers more effectively to its business objectives and to the
communities in which it operates.
SWOT ANALYSIS:
1. Expansion of Standard Chartered:
From the early 90s, Standard Chartered has focused on developing
its strong franchises in Asia, the Middle East and Africa using its
37
operations in the United Kingdom and North America to provide
customers with a bridge between these markets. Secondly, it would
focus on consumer, corporate and institutional banking, and on the
provision of treasury services – areas in which the Group had
particular strength and expertise.
38
Problem Statement:
To understand the behavior pattern of people of different
age groups, incomes and occupations with respect to the
investment they make thereby.
Objective:
To make a comparison of different investment products
discussed above. This will enable the investors to invest
39
in the investment products which are most suited to
them. This shall be done with the help of conducting a
survey taking a sample size of 44 people.
40
Sex,
Occupation.
Name:
Age:
( )Below 25, ( )25 to 40, ( )40 to 60, ( )Above 60.
Income:
( )Below 1,50,000 ( )1,50,000 to 4,00,000 ( )4,00,000 to 6,50,000
( )Above 6,50,000
Occupation:
41
( )Private Sector Employee, ( )Govt. Employee, ( )Businessman/Self
Employed, ( )Others…………..
Objective of Investment:
( )Growth/Return, ( )Savings, ( )Tax Savings, ( )Child Marriage,
( )Others…………
Tenure:
( )Less than 1 yr, ( )1 yr to 3 yrs, ( )3yrs to 5 yrs, ( )More than 5 yrs.
Data Profile
42
Gender Profile
36.36%
Female
Male
63.64%
Income Profile
2.27%
27.27%
29.55%
1.5L to 4L
4L to 6.5L
Above 6.5L
Below 1.5L
40.91%
43
Occupation Profile
4.55%
36.36%
Business/Self Employed
Government Employee
40.91% Private Sector Employee
Retired
18.18%
4.55% 4.55%
11.36%
11.36%
Bullion
6.82% Fixed Deposits
Kisan Vikas Patra
Life Insurance Policies
44
Risk Profile
6.82%
45.45% High
Low
Medium
47.73%
Objective Profile
11.36%
22.73%
Child Marriage
Growth/Returns
N/A
9.09% Safety
Savings
50.00% Tax Savings
2.27%
4.55%
45
Tenure Profile
27.27%
45.45% 1 to 3 Yrs
3 to 5 Yrs
Less than 1 Yr
9.09% More than 5 Yrs
18.18%
38.64%
High
56.82% Low
Medium
4.55%
46
Findings of the Research:
Count of
Age Tenure
More than 5 Grand
Age 1 to 3 Yrs 3 to 5 Yrs Less than 1 Yr Yrs Total
25 to 40 7 3 2 6 18
40 to 60 4 2 3 9
Above 60 2 1 2 5
Below 25 7 2 2 1 12
Grand
Total 20 8 4 12 44
Count of Age
20
18
16
14 Tenure
12 More than 5 Yrs
10 Less than 1 Yr
8 3 to 5 Yrs
6 1 to 3 Yrs
4
2
0
25 to 40 40 to 60 Above 60 Below 25
Age
47
2. Relation between Income & Risk
Count of Income
20
18
16
14
Risk
12
Medium
10
Low
8 High
6
0
1.5L to 4L 4L to 6.5L Above 6.5L Below 1.5L
Income
48
3. Relation between Investment &
Satisfaction
12
10 Satisfaction
8 Medium
6 Low
High
4
2
Shares/Debentures
Kisan Vikas Patra
Fixed Deposits
Mutual Funds
0
Life Insurance
Real Estate
ULIP
Bullion
Policies
Prefered Investment
49
4. Relation between Age of Investor and
Objective of Investment
Count of
Age Objective
Child Grand
Age Marriage Growth/Returns N/A Safety Savings Tax Savings Total
25 to 40 2 9 2 2 3 18
40 to 60 1 6 2 9
Above 60 2 2 1 5
Below 25 5 2 5 12
Grand
Total 5 22 2 1 4 10 44
Count of Age
20
18
16 Objective
14 Tax Savings
12 Savings
10 Safety
8 N/A
6 Growth/Returns
4 Child Marriage
2
0
25 to 40 40 to 60 Above 60 Below 25
Age
50
5. Relation between Investment &
Tenure
Count of Prefered
Investment Tenure
More than 5 Grand
Prefered Investment 1 to 3 Yrs 3 to 5 Yrs Less than 1 Yr Yrs Total
Bullion 2 2
Fixed Deposits 3 1 1 5
Kisan Vikas Patra 1 1 1 3
Life Insurance Policies 1 3 4
Mutual Funds 8 3 1 12
Real Estate 3 3 5 11
Shares/Debentures 2 3 5
ULIP 2 2
Grand Total 20 8 4 12 44
ULIP
Bullion
Fixed Deposits
Real Estate
Life Insurance
Shares/Debentures
Policies
Prefered Investment
51
6. Relation between Investment and
Occupation
Count of Occupation
20 Prefered Investment
18
ULIP
16
14 Shares/Debentures
12 Real Estate
10 Mutual Funds
8 Life Insurance Policies
6
Kisan Vikas Patra
4
Fixed Deposits
2
0 Bullion
Business/Self Government Private Sector Retired
Employed Employee Employee
Occupation
52
7. Relation between Age of Investor &
Tenure
Count of
Age Tenure
More than 5 Grand
Age 1 to 3 Yrs 3 to 5 Yrs Less than 1 Yr Yrs Total
25 to 40 7 3 2 6 18
40 to 60 4 2 3 9
Above 60 2 1 2 5
Below 25 7 2 2 1 12
Grand
Total 20 8 4 12 44
Count of Age
20
18
16
14 Tenure
12 More than 5 Yrs
10 Less than 1 Yr
8 3 to 5 Yrs
6 1 to 3 Yrs
4
2
0
25 to 40 40 to 60 Above 60 Below 25
Age
53
8. Relation between Age of Investor &
Objective of Investment
Count of
Age Objective
Child Grand
Age Marriage Growth/Returns N/A Safety Savings Tax Savings Total
25 to 40 2 9 2 2 3 18
40 to 60 1 6 2 9
Above 60 2 2 1 5
Below 25 5 2 5 12
Grand
Total 5 22 2 1 4 10 44
Count of Age
20
18
16 Objective
14 Tax Savings
12 Savings
10 Safety
8 N/A
6 Grow th/Returns
4 Child Marriage
2
0
25 to 40 40 to 60 Above 60 Below 25
Age
54
9. Relation between Investment &
Objective of Investment
Count of Prefered
Investment Objective
Child Tax Grand
Prefered Investment Marriage Growth/Returns N/A Safety Savings Savings Total
Bullion 2 2
Fixed Deposits 1 1 3 5
Kisan Vikas Patra 3 3
Life Insurance Policies 1 1 1 1 4
Mutual Funds 7 5 12
Real Estate 2 8 1 11
Shares/Debentures 5 5
ULIP 1 1 2
Grand Total 5 22 2 1 4 10 44
55
Drop Page Fields Here
Objective
Count of Pref ered Investment
14 Tax Savings
12
10 Sav ings
8
6 Saf ety
4 N/A
2
0 Grow th/Returns
ULIP
Bullion
Real Estate
Child Marriage
Mutual Funds
Fixed Deposits
Life Insurance
Kisan Vikas Patra
Shares/Debentur
Policies
56
Another one of our Assignments was to compare
the services and products offered by different
Banks from one another.
Unique Feature
57
BANKS
ICICI
Rs10,000
Free
Rs200/yr
Free
1st is Free,Rs50 Per Additional C/B
NA
Free
Rs20 Per Transaction
NA
Rs99
Rs99
Free
Rs200
HDFC
Rs5,000
Free
Free
58
Free
NA
NA
Free
Rs20 Per Transaction
NA
Rs100
NA
Rs100
Rs100
NA
Rs50 Up to 10,000 at Base Branch
Free
Rs50,000/day-Self
KOTAK
Rs10,000
Weekly Report-Rs300/Quarter
Daily Report-Rs1500/Quarter
Free
Free
NA
59
Free(Including HDFC)
Rs20 Per Transaction
Rs90
Free
NA
Rs100
Rs100
NA
Rs50 (Min) or Rs2.50 Per 1000 after that. Foreign Currency D/D-
Rs500
Free
Rs25,000-Self
ABN-AMRO
Rs10000
Free
Free
Free
Rs50
NA
Free
Rs20 Per Transaction
Rs120
60
Rs180
NA
NA
RS200
NA
Rs50 If Drawn on ABN-AMRO Branches. Foreign Currency
D/D-Rs200
Rs50(Min) or 0.25% of The Transaction Amount
NA
61
Rs140 NA
Rs100 NA
Rs200 NA
Rs50 NA
Rs50 NA
Free NA
NA NA
a) Savings Account:
i. aXcess Plus Account:
Standard Chartered Bank's aXcess Plus is a revolutionary
savings account that provides you with unstinted aXcess to your
money.
Features
Exclusive benefits of an aXcess Plus savings account:
FREE Unlimited Visa ATM transactions* (Cash withdrawal)
62
FREE Doorstep Banking*
FREE Demand Drafts/Pay Orders* (drawn at SCB locations)
Additional Features
Get instant cash at over 20,000 ATMs across India and over
10,00,000 ATMs across the world through the Visa network. And
get a globally valid Debit Card that lets you shop at over 3,26,000
outlets in India and at over 14 million outlets across the world.
And that’s not all, with the aXcess Plus account you also get:
International Debit Card
Phone Banking
Online Banking
63
ii. Super Value Account
The unique SuperValue savings account from Standard Chartered
is proof that the best things in life come free. With an average
quarterly balance of just Rs. 50,000, you get a host of services
from Standard Chartered absolutely free.
v. aaSaan Account
Introducing the Standard Chartered Bank's aaSaan savings
account. It is a no maintenance, hassle free and easy solution to all
your banking needs.
vi. 2 in 1 Account
Introducing a unique account that offers you a double advantage –
it lets you earn the high interest rate of a fixed deposit while you
enjoy the flexibility of a savings or current account.
64
b) Current a/c
i) Business Plus Account
Standard Chartered Bank presents the Business Plus Account. A
current account that helps you get more out of your business.
2. Credit Cards:
It offers a variety of credit cards, each tailored to your
lifestyle needs.
Examples:
a) Executive Card is designed for the professional on the move. It’s
a card that travels like you do.
b) Gold Card is for special deals at your favorite restaurants,
privileged access to exclusive areas when you’re traveling,
worldwide acceptance.
65
b) Gold Debit Card includes privileges like high spending limits
and worldwide acceptance.
66
Royal Sundaram Alliance Insurance Company Limited is a joint
venture between Sundaram Finance and Royal & SunAlliance plc,
UK, where the former holds 74% and the latter holds 26% of the
equity of the venture. Royal Sundaram currently has over 2.1
million customers in its fold. Its products are distributed in over
150 cities across India.
Some key products are:
Health shield: A comprehensive health insurance package
designed to offer complete protection to the insured and his
family.
Car shield: A comprehensive motorcar insurance package,
designed to cover your car in most adverse situations.
Home shield: Provides complete coverage for damage to
your building.
Accident shield: Designed to take care of you and your
family in the unfortunate event of a fatal accident.
Double protect: “Double Protect” is a 2 years Health
Insurance plan. The plan offers reimbursement of
Hospitalisation expenses in the event of illness or accident
Investment Services
Investments, unlike works of art, cannot afford the luxury of
experimenting. Investing is not guesswork. It takes more than just
a 'tip' it needs training to plan, instinct to pick and sheer intellect to
make it work for you. That extra mile assures you that your hard
earned money is with the right people.
Standard Chartered Bank, using over 150 years of expertise,
promises to guide you through the world of exciting new
investment opportunities in India and overseas.
From shortest-term deployment of funds to planning your
retirement, we pledge to go the extra mile to ensure that you reach
your chosen financial goals.
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When you deal with Standard Chartered, you can expect the best.
We are, after all, the leading global bank in Asia, Africa and the
Middle East. We look after investments for over 5 million
customers across in 57 countries. From world class services to the
most sought after talent pool, we provide an unmatched foundation
which you can trust.
We've invested in professional talent that can provide you with a
continuous, thorough and insightful guidance with your money. All
this so you can rest easy when you put your money into our hands.
We offer a wide range of professional services with a team of
trained, experienced professionals. Our team has a Wide capital
markets and investment advisory experience and is dedicated to
making your investments work for you.
Consolidated portfolio statements of all your mutual fund
investments
Online, internet access to PMS portfolios
6. Other Services:
NRI Banking
Under this banking SCB offers accounts like NRE, NRO &FCNR
accounts.
NRE accounts: Funds remitted from abroad and which are of
repatriable nature can be credited to NRE accounts. It is best suited
to park overseas savings remitted to India by converting to INR. In
addition it can open as Savings account, Current account or Fixed
deposit.
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NRO accounts: Local funds which do not qualify, under the
exchange control regulations, for remittance outside India can be
credited to NRO accounts. These are best suited to park Indian
earnings like rent, Indian salary, dividends etc. It can open as
Savings account, Current account or Fixed deposit.
PRIORITY Banking
Designed specifically for those who appreciate only the finest
things in life, Priority Banking offers the very highest levels of
personalized banking to match unique status.
Bank is committed to helping a plan ,build and protect wealth by
offering individual attention as well as international banking and
investment opportunities to meet current and future needs.
Standard Chartered Bank Priority Banking is created specifically
for a chosen few individuals, who will settle for nothing but the
best and demand the best and demand the highest standards of
service in all your banking relationships.
SME Banking
One-Stop Financial Solution for Your Growing Business
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understand your business requirement and help you manage your
business better.
SCB offers product like FOREX services, Term Loan,
International Trade Account, Trade Services & Working Capital
etc.
Commercial Banking
Standard Chartered has maintained a long local presence, since
1858, with particular emphasis on relationship banking. Significant
networks have been established with vendors and financial-related
organisations to enable us to offer our customers a comprehensive
range of flexible financial services, with special focus on
transactional banking products. Supported by state-of-the-art
operations, Standard Chartered is pro-active in improving every
part of our services. Electronic Delivery system has been put in
place to ensure that transactions are handled speedily. We have our
Cash Product Specialists and dedicated Customer Service Centres
to provide our customers with effective solutions. The currency of
India is the Rupee (SWIFT code: INR).
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Mutual Fund
Concept
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A mutual fund is a professionally managed firm of
collective investments that collects money from many
investors and puts it in stocks, bonds, short-term money
market instruments, and/or other securities. The fund
manager, also known as portfolio manager, trades the
fund's underlying securities, realizing capital gains or
losses and passing any proceeds to the individual investors.
Currently, the worldwide value of all mutual funds totals
more than $26 trillion.
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How Mutual Funds Work
Every mutual fund has a goal - either growing its assets (capital
gains) and/or generating income (dividends) for its investors.
Distributions in the form of capital gains (short-term and long-
term) and dividends may be passed on (paid) to shareholders as
income or reinvested to purchase more shares. For tax
purposes, keep track of your distributions and cost basis of
purchased/reinvested shares.
Like any business, mutual funds have risks and costs associated
with returns. As a shareholder, the risks of a fund and the
expenses associated with fund's operation directly impact your
return.
Sale Price
Is the price you pay when you invest in a scheme. Also called
Offer Price. It may include a sales load.
Repurchase Price
Is the price at which a close-ended scheme repurchases its units
and it may include a back-end load. This is also called Bid
Price.
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Redemption Price
Is the price at which open-ended schemes repurchase their units
and close-ended schemes redeem their units on maturity. Such
prices are NAV related.
Sales Load
Is a charge collected by a scheme when it sells the units. Also
called, ‘Front-end’ load. Schemes that do not charge a load are
called ‘No Load’ schemes.
Returns
As an investor, you want to know the fund's return-its track
record over a specified period of time. So what exactly is
"return?"
A mutual fund's return is the rate of increase or decrease in its
value over a specific period of time usually expressed in the
following increments: one, three, five, and ten year, year to date,
and since the inception of the fund. Since return is a common
measure of performance, you can use it to evaluate and compare
mutual funds within the same fund category. Generally
expressed as an annualized percentage rate, return is calculated
assuming that all distributions from the fund are reinvested.
Since average returns can sometimes "hide" short-term highs
and lows, you should evaluate returns for a time period of
several years-not just one year or less. A fund that has a high
return in one year may have experienced losses in other years-
these fluctuations may not be apparent in its average return.
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Risk
Every type of investment, including mutual funds, involves risk.
Risk refers to the possibility that you will lose money (both
principal and any earnings) or fail to make money on an
investment. A fund's investment objective and its holdings are
influential factors in determining how risky a fund is. Reading the
prospectus will help you to understand the risk associated with that
particular fund.
Generally speaking, risk and potential return are related. This is the
risk/return trade-off. Higher risks are usually taken with the
expectation of higher returns at the cost of increased volatility.
While a fund with higher risk has the potential for higher return, it
also has the greater potential for losses or negative returns. The
school of thought when investing in mutual funds suggests that the
longer your investment time horizon is the less affected you should
be by short-term volatility. Therefore, the shorter your investment
time horizon, the more concerned you should be with short-term
volatility and higher risk.
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term returns. Bonds typically experience more short-term price
swings, and in turn have generated higher long-term returns.
However, stocks historically have been subject to the greatest
short-term price fluctuations—and have provided the highest long-
term returns. Investors looking for a fund which incorporates all
asset classes may consider a balanced or hybrid mutual fund.
These funds can be very conservative or very aggressive. Asset
allocation portfolios are mutual funds that invest in other mutual
funds with different asset classes. At the discretion of the
manager(s), securities are bought, sold, and shifted between funds
with different asset classes according to market conditions.
Mutual funds face risks based on the investments they hold. For
example, a bond fund faces interest rate risk and income risk.
Bond values are inversely related to interest rates. If interest rates
go up, bond values will go down and vice versa. Bond income is
also affected by the change in interest rates. Bond yields are
directly related to interest rates falling as interest rates fall and
rising as interest rise. Income risk is greater for a short-term bond
fund than for a long-term bond fund.
• Call Risk. The possibility that falling interest rates will cause
a bond issuer to redeem—or call—its high-yielding bond
before the bond's maturity date.
• Country Risk. The possibility that political events (a war,
national elections), financial problems (rising inflation,
government default), or natural disasters (an earthquake, a
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poor harvest) will weaken a country's economy and cause
investments in that country to decline.
• Credit Risk. The possibility that a bond issuer will fail to
repay interest and principal in a timely manner. Also called
default risk.
• Currency Risk. The possibility that returns could be reduced
for Americans investing in foreign securities because of a rise
in the value of the U.S. dollar against foreign currencies.
Also called exchange-rate risk.
• Income Risk. The possibility that a fixed-income fund's
dividends will decline as a result of falling overall interest
rates.
• Industry Risk. The possibility that a group of stocks in a
single industry will decline in price due to developments in
that industry.
• Inflation Risk. The possibility that increases in the cost of
living will reduce or eliminate a fund's real inflation-adjusted
returns.
• Interest Rate Risk. The possibility that a bond fund will
decline in value because of an increase in interest rates.
• Manager Risk. The possibility that an actively managed
mutual fund's investment adviser will fail to execute the
fund's investment strategy effectively resulting in the failure
of stated objectives.
• Market Risk. The possibility that stock fund or bond fund
prices overall will decline over short or even extended
periods. Stock and bond markets tend to move in cycles, with
periods when prices rise and other periods when prices fall.
• Principal Risk. The possibility that an investment will go
down in value, or "lose money," from the original or invested
amount.
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Types of mutual funds
1. Open-end fund
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2. Close-Ended Funds
Redemption can take place only after the period of the scheme
is over. However, close-ended funds are listed on the stock
exchanges and investors can buy/ sell units in the secondary
market (there is no load).
3. Exchange-traded funds
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4. Equity funds
5. Bond funds
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7. Funds of funds
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usually vary by the time the investor would like to retire: 2020,
2030, 2050, etc. The more distant the target retirement date, the
more aggressive the asset mix.
8. Hedge funds
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Advantages of Mutual Funds
1. Professional Management:
The primary advantage of funds (at least theoretically) is the
professional management of your money. Investors purchase
funds because they do not have the time or the expertise to
manage their own portfolio. A mutual fund is a relatively
inexpensive way for a small investor to get a full-time manager
to make and monitor investments.
When you buy a mutual fund, you are also choosing a professional
money manager. This manager will use the money that you
invest to buy and sell stocks that he or she has carefully
researched. Therefore, rather than having to thoroughly
research every investment before you decide to buy or sell, you
have a mutual fund's money manager to handle it for you.
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2. Diversification
By owning shares in a mutual fund instead of owning individual
stocks or bonds, your risk is spread out. The idea behind
diversification is to invest in a large number of assets so that a
loss in any particular investment is minimized by gains in
others. In other words, the more stocks and bonds you own, the
less any one of them can hurt you (think about Enron). Large
mutual funds typically own hundreds of different stocks in
many different industries. It wouldn't be possible for an
investor to build this kind of a portfolio with a small amount of
money.
3. Convenience:
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With most mutual funds, buying and selling shares, changing
distribution options, and obtaining information can be
accomplished conveniently by telephone, by mail, or online.
4. Liquidity
Just like an individual stock, a mutual fund allows you to request
that your shares be converted into cash at any time.
Mutual fund shares are liquid and orders to buy or sell are placed
during market hours. However, orders are not executed until the
close of business when the NAV (Net Average Value) of the fund
can be determined. Fees or commissions may or may not be
applicable. Fees and commissions are determined by the specific
fund and the institution that executes the order.
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5. Economies of Scale:
The easiest way to understand economies of scale is by thinking
about volume discounts; in many stores the more of one product
you buy, the cheaper that product becomes. For example, when
you buy a dozen donuts, the price per donut is usually cheaper than
buying a single one. This occurs also in the purchase and sale of
securities. If you buy only one security at a time, the transaction
fees will be relatively large.
Mutual funds are able to take advantage of their buying and selling
size and thereby reduce transaction costs for investors. When you
buy a mutual fund, you are able to diversify without the numerous
commission charges. Imagine if you had to buy the 10-20 stocks
needed for diversification. The commission charges alone would
eat up a good chunk of your savings. Add to this the fact that you
would have to pay more transaction fees every time you wanted to
modify your portfolio - as you can see the costs begin to add up.
With mutual funds, you can make transactions on a much larger
scale for less money.
6. Divisibility:
Many investors don't have the exact sums of money to buy round
lots of securities. One to two hundred dollars is usually not enough
to buy a round lot of a stock, especially after deducting
commissions. Investors can purchase mutual funds in smaller
denominations, ranging from $100 to $1,000 minimums. Smaller
denominations of mutual funds provide mutual fund investors the
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ability to make periodic investments through monthly purchase
plans while taking advantage of dollar-cost averaging. So, rather
than having to wait until you have enough money to buy higher-
cost investments, you can get in right away with mutual funds.
This provides an additional advantage - liquidity.
8. Simplicity:
Buying a mutual fund is easy! Pretty well any bank has its own
line of mutual funds, and the minimum investment is small.
Most companies also have automatic purchase plans whereby
as little as $100 can be invested on a monthly basis.
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Disadvantages of Mutual Funds
1. Fluctuating Returns:
2. Diversification:
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diworsification) occurs when investors acquire many funds that
are highly related and, as a result, don't get the risk reducing
benefits of diversification.
4. Costs:
Mutual funds don't exist solely to make your life easier--all funds
are in it for a profit. The mutual fund industry is masterful at
burying costs under layers of jargon. These costs are so
complicated that in this tutorial we have devoted an entire
section to the subject.
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different fees that reduce the overall payout. In mutual funds,
the fees are classified into two categories: shareholder fees and
annual operating fees.
5. Misleading Advertisements:
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Because funds have small holdings in so many different
companies, high returns from a few investments often don't
make much difference on the overall return. Dilution is also the
result of a successful fund getting too big. When money pours
into funds that have had strong success, the manager often has
trouble finding a good investment for all the new money.
6. Evaluating Funds:
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Standard Chartered Mutual Fund
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• Next day redemptions for non-liquid funds and lately
• One Call Free number 1600226622 accessible across 153
cities
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often so compelling that insurance products competed with
investment products for a place in the investor's portfolio.
Perhaps insurance policies then were symbolic of the times
when high interest rates and the absence of a rational risk-return
trade-off were the norms.
The subsequent softening of interest rates introduced a degree a
much-needed rationality to insurance products like endowment
plans; attractive returns at low risk became a thing of the past.
The same period also coincided with an upturn in equity
markets and the emergence of a new breed of market-linked
insurance products like ULIPs.
While in conventional insurance products the insurance
component takes precedence over the savings component, the
opposite holds true for ULIPs.
More importantly ULIPs (powered by the presence of a large
number of variants) offer investors the opportunity to select a
product which matches their risk profile; for example an
individual with a high risk appetite can shun traditional
endowment plans (which invest about 85% of their funds in the
debt instruments) in favour of a ULIP which invests its entire
corpus in equities.
In traditional insurance products, the sum assured is the corner
stone; in ULIPs premium payments is the key component.
ULIPs are remarkably alike to mutual funds in terms of their
structure and functioning; premium payments made are
converted into units and a net asset value (NAV) is declared for
the same.
Investors have the choice of enhancing their insurance cover,
modifying premium payments and even opting for a distinct
asset allocation than the one they originally opted for.
Also if an unforeseen eventuality were to occur, in case of
traditional products, the sum assured is paid along with
accumulated bonuses; conversely in ULIPs, the insured is paid
either the sum assured or corpus amount whichever is higher.
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Insurance seekers have never been exposed to this kind of
flexibility in traditional insurance products and it would be fair
to say that ULIPs represent the new face of insurance.
While few would dispute the value-add that ULIPs can provide
to one's insurance portfolio and financial planning; the same is
not without its flipside.
For the uninitiated, understanding the functioning of ULIPs can
be quite a handful! The presence of what seem to be relatively
higher expenses, rigidly defined insurance and investment
components and the impact of markets on the corpus clearly
make ULIPs a complex proposition. Traditionally the insurance
seeker's role was a passive one restricted to making premium
payments; ULIPs require greater participation from both the
insured and the insurance advisor.
As is the case with most evolved investment avenues, making
informed decisions is the key if investors in ULIPs wish to truly
gain from their investments. The various aspects of ULIPs dealt
with in this publication will certainly further the ULIP investor's
cause.
Features of ULIP:
Life Protection
Investment and savings
Flexibility
Adjustable Life cover
Investment options
Transparency
Options to take additional cover against death due to accident
Disability
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Critical Illness
Surgeries
Liquidity
Tax Planning
1. Term/Tenure
The ULIP client must have the option to choose a
term/tenure.
If no term is defined, then the term will be defined as '70
minus the age of the client'. For example if the client is
opting for ULIP at the age of 30 then the policy term would
be 40 years.
The ULIP must have a minimum tenure of 5 years.
2. Sum Assured
On the same lines, now there is a sum assured that clients can
associate with. The minimum sum assured is calculated as:
(Term/2 * Annual Premium) or (5 * Annual Premium)
whichever is higher.
There is no clarity with regards to the maximum sum assured.
The sum assured is treated as sacred under the new guidelines; it
cannot be reduced at any point during the term of the policy
except under certain conditions - like a partial withdrawal
within two years of death or all partial withdrawals after 60
years of age. This way the client is at ease with regards to the
sum assured at his disposal.
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3. Premium payments
If less than first 3 years premiums are paid, the life cover will
lapse and policy will be terminated by paying the surrender
value. However, if at least first 3 years premiums have been
paid, then the life cover would have to continue at the option of
the client.
4. Surrender value
The surrender value would be payable only after completion of
3 policy years.
5. Top-ups
Insurance companies can accept top-ups only if the client has
paid regular premiums till date. If the top-up amount exceeds
25% of total basic regular premiums paid till date, then the
client has to be given a certain percentage of sum assured on the
excess amount. Top-ups have a lock-in of 3 years (unless the
top-up is made in the last 3 years of the policy).
6.Partial withdrawals
The client can make partial withdrawals only after 3 policy
years.
7. Settlement
The client has the option to claim the amount accumulated in his
account after maturity of the term of the policy upto a maximum
of 5 years. For instance, if the ULIP matures on January 1,
2007, the client has the option to claim the ULIP monies till as
late as December 31, 2012. However, life cover will not be
available during the extended period.
8. Loans
No loans will be granted under the new ULIP.
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9. Charges
The insurance company must state the ULIP charges explicitly.
They must also give the method of deduction of charges.
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getting into and unscrupulous agents should get a lot of 'credit'
for the same.
Gather information on ULIPs, the various options available and
understand their working. Read ULIP-related information
available on financial Web sites, newspapers and sales literature
circulated by insurance companies.
Identify a plan that is best suited for you (in terms of allocation
of money between equity and debt instruments). Your risk
appetite should be the deciding criterion in choosing the plan.
As a result if you have a high risk appetite, then an aggressive
investment option with a higher equity component is likely to be
more suited. Similarly your existing investment portfolio and
the equity-debt allocation therein also need to be given due
importance before selecting a plan.
Opting for a plan that is lop-sided in favour of equities, only
with the objective of clocking attractive returns can and does
spell disaster in most cases.
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Compare the ULIPs' performance i.e. find out how the debt,
equity and balanced schemes are performing; also study the
portfolios of various plans. Expenses are a significant factor in
ULIPs, hence an assessment on this parameter is warranted as
well.
Enquire about the top-up facility offered by ULIPs i.e.
additional lump sum investments which can be made to enhance
the policy's savings portion. This option enables policyholders
to increase the premium amounts, thereby providing presenting
an opportunity to gainfully invest any surplus funds available.
Find out about the number of times you can make free switches
(i.e. change the asset allocation of your ULIP account) from one
investment plan to another. Some insurance companies offer
multiple free switches every year while others do so only after
the completion of a stipulated period.
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In a market-linked product, protecting the investment's
downside can be a huge advantage. Find out if the ULIP you are
considering offers a minimum guarantee and what costs have to
be borne for the same.
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o Partial and Full withdrawals after 3 yrs.
o Unmatched flexibility to meet your changing lifestyle
and insurance requirements.
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o Available in Single Premium and regular Premium
payment mode.
o Option to take a tax-free lump sum up to 33% of Sum
Assured.
o Open Market option: Purchase immediate annuity from
Bajaj Allianz Life Insurance or any other life insurer.
o Choice of 5 investment funds.
o 3 free switches allowed every year.
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o Available with a host of additional benefits including:
Family Income and Waiver of Premium Benefit
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funds to name a few. Generally speaking, ULIPs can be termed
as mutual fund schemes with an insurance component.
However it should not be construed that barring the insurance
element there is nothing differentiating mutual funds from
ULIPs.
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2. Expenses
3. Portfolio disclosure
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Mutual fund houses are required to statutorily declare their
portfolios on a quarterly basis, albeit most fund houses do so on
a monthly basis. Investors get the opportunity to see where their
monies are being invested and how they have been managed by
studying the portfolio.
There is lack of consensus on whether ULIPs are required to
disclose their portfolios. During our interactions with leading
insurers we came across divergent views on this issue.
While one school of thought believes that disclosing portfolios
on a quarterly basis is mandatory, the other believes that there is
no legal obligation to do so and that insurers are required to
disclose their portfolios only on demand.
Some insurance companies do declare their portfolios on a
monthly/quarterly basis. However the lack of transparency in
ULIP investments could be a cause for concern considering that
the amount invested in insurance policies is essentially meant to
provide for contingencies and for long-term needs like
retirement; regular portfolio disclosures on the other hand can
enable investors to make timely investment decisions.
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Section 80C benefits
Section 80C benefits are available only
Tax benefits are available on all
on investments in tax-saving funds
ULIP investments
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appreciated, he can book profits by simply transferring the
requisite amount to a debt-oriented plan.
5. Tax benefits
6. Liquidity
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marketing and distribution costs. ULIPs are essentially long-
term products that make sense only if your time horizon is 10 to
20 years.
Mutual fund investments, on the other hand, can be redeemed at
any time, barring ELSS (equity-linked savings schemes). Exit
loads, if applicable, are generally for six months to a year in
equity funds. So mutual funds score substantially higher on
liquidity.
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