COURSE NAME - BBA morning V semester

Summer Internship Project

Report

“A Study on Investment pattern of

Indians”

• External Guide: CA Manoj Srivastava

• Submitted to: Ms. Surbhi Ahuja
• Submitted by: Pradeep Singh Yadav
• JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI
 STUDENT UNDERTAKING

I, Pradeep Singh Yadav, student of BBA of JIMS KALKAJI,

hereby declare that I have completed the summer internship

project on “A Study on Investment pattern of Indians- existing vs likely scenario” as a part of

course requirement.

I further declare that the information presented in the project is

true and original to the best of my knowledge.

Pradeep singh yadav Signature:

BBA Vth Semester Morning

Batch: 2020-2023

03714101720
 CONTENTS

Description Page No.

Acknowledgement 4

Certificate of completion 5
Declaration 6
Certificate copy 7
Executive Summary 8
About Company 9-10
What are Mutual funds? 10-12
Types of Mutual funds 12-14
Introduction, Advantages & Disadvantages 15-19
About My Internship & Leanings 20-21

Investment pattern in India 22-25

References 25-26
 ACKNOWLEDGEMENT

The internship opportunity I had with LWM Services Private Limited, was a great chance for
learning and professional development. Therefore, I consider myself as a very lucky individual
as I was provided with an opportunity to be a part of it. I am also grateful for having a chance
to meet so many wonderful people and professionals virtually who led me through this
internship period.

I would like to use this opportunity to express my deepest gratitude to CA Manoj Srivastava,
faculty, LWM Services Private Limited, who heartily welcomed me for the internship and
guided and encouraged me through the summer training.

I choose this moment to acknowledge their contribution gratefully. Last but not the least, I
would like to send my sincere thanks to Ms. Surbhi Ahuja for her helpful hand in the
completion of my project. Her precious guidance which was extremely valuable for my study
both theoretically and practically.

I would like all those who have contributed in completing this project. A lot of effort has gone

into this training report. My thanks are due to many people with whom I have been closely

associated. Their trust and patience is now coming out in the form of this thesis.

Pradeep Singh Yadav,

BBA V MORNING
 CERTIFICATE OF COMPLETION

This is to certify that Pradeep Singh Yadav of BBA fifth semester of JIMS Kalkaji, New

Delhi has completed his project report on the topic of “Study on Investment pattern of
Indians- existing vs likely scenario under the supervision of Ms. Surbhi Ahuja member of JIMS
KALKAJI.

To the best of my knowledge the report is original and has not been copied or submitted

anywhere else. It is an independent work done by her.

Ms. Surbhi Ahuja

(Assistant Professor)
 DECLARATION

I hereby declare that the present “A Study on Investment pattern of Indians- existing vs likely
scenario

Is based on my original research work for the fulfillment of the continuous evaluation of the

assessment of two months summer internship program, BACHELOR OF BUSINESS

ADMINISTRATION-Class of 2020-2023 .

The report has been done by me under the guidance of CA Manoj Srivastava and Ms. Surbhi
Ahuja (Faculty Guide) the research presented in this study has not been submitted in full or
part in this or any other university for the award of any degree or diploma.

Certificate of completion
 EXECUTIVE SUMMARY

A mutual fund is a company that pools money from many investors and invests the
money in securities such as stocks, bonds, and short-term debt. The combined
holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual
funds. Each share represents an investor’s part ownership in the fund and the income
it generates.

Most mutual funds fall into one of four main categories – money market funds, bond
funds, stock funds, and target date funds. Each type has different features, risks, and
rewards.

Our mission is to spread financial literacy among the Indian people. Generally, Indians
have the wisdom to save money. However, due to a lack of financial literacy, they are
unable to invest their money in the right investment options. It has been proven that
long term investments can be successful in meeting all the financial goals of life.
Through mutualglobe.com we aim to channelize their hard - earned money into long
term investments. So that those people turn from savers to investors.

So, our main objective is to make people aware of early investments to achieve their
life goals like buying a house, children's education, marriage and retirement planning.
If people understand the importance of starting investing at an early age, they can
successfully achieve all their life goals without any problem. And of course, they can
also make decent wealth for themselves.
 About Company

What is Mutualglobe.com ?

Mutualglobe.com is one of the most respected Indian Financial portals dedicated to

Financial Education, Research & Investments in Mutual Funds.

https://mutualglobe.com

Mutualglobe.com is a reliable source of independent investment research & analysis of

Indian Mutual Funds. Our research is based on performance, portfolio and various
other important parameters related to mutual fund schemes.

It also provides Education & awareness of mutual funds in the form of various free
courses. This also provides online preparation of NISM V - A Certification
examination.
Our mission is to spread financial literacy among the Indian people. Generally, Indians
have the wisdom to save money. However, due to a lack of financial literacy, they are
unable to invest their money in the right investment options. It has been proven that
long term investments can be successful in meeting all the financial goals of life.
Through mutualglobe.com we aim to channelize their hard - earned money into long
term investments. So that those people turn from savers to investors.
What Is a Mutual Fund?
A mutual fund is a financial vehicle that pools assets from shareholders to invest in
securities like stocks, bonds, money market instruments, and other assets. Mutual
funds are operated by professional money managers, who allocate the fund's assets
and attempt to produce capital gains or income for the fund's investors. A mutual
fund's portfolio is structured and maintained to match the investment objectives
stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed
portfolios of equities, bonds, and other securities. Each shareholder, therefore,
participates proportionally in the gains or losses of the fund. Mutual funds invest in a
vast number of securities, and performance is usually tracked as the change in the
total market cap of the fund—derived by the aggregating performance of the
underlying investments.
Most mutual funds are part of larger investment companies such as Fidelity
Investments, Vanguard, T. Rowe Price, and Oppenheimer. A mutual fund has a fund
manager, sometimes called its investment adviser, who is legally obligated to work in
the best interest of mutual fund shareholders.

KEY TAKEAWAYS
• A mutual fund is a type of investment vehicle consisting of a portfolio of
stocks, bonds, or other securities.
• Mutual funds give small or individual investors access to diversified,
professionally managed portfolios.
• Mutual funds are divided into several kinds of categories, representing the
kinds of securities they invest in, their investment objectives, and the type of
returns they seek.
 • Mutual funds charge annual fees, expense ratios, or commissions, which may
affect their overall returns.
• Employer-sponsored retirement plans commonly invest in mutual funds.

CALCULATE
How Are Mutual Funds Priced?
The value of the mutual fund depends on the performance of the securities in which
it invests. When buying a unit or share of a mutual fund, an investor is buying the
performance of its portfolio or, more precisely, a part of the portfolio's value.
Investing in a share of a mutual fund is different from investing in shares of stock.
Unlike stock, mutual fund shares do not give their holders any voting rights. A share
of a mutual fund represents investments in many different stocks or other securities.
The price of a mutual fund share is referred to as the net asset value (NAV) per
share, sometimes expressed as NAVPS. A fund's NAV is derived by dividing the total
value of the securities in the portfolio by the total amount of shares outstanding.
Outstanding shares are those held by all shareholders, institutional investors, and
company officers or insiders.
Mutual fund shares can typically be purchased or redeemed at the fund's current
NAV, which doesn't fluctuate during market hours, but is settled at the end of each
trading day. The price of a mutual fund is also updated when the NAVPS is settled.
The average mutual fund holds different securities, which means mutual fund
shareholders gain diversification. Consider an investor who buys only Google stock
and relies on the success of the company's earnings. Because all of their dollars are
tied to one company, gains and losses are dependent on the company's success.
However, a mutual fund may hold Google in its portfolio where the gains and losses
of just one stock are offset by gains and losses of other companies within the fund.
How Are Returns Calculated for Mutual Funds?
When an investor buys Apple stock, they are buying partial ownership or a share of
the company. Similarly, a mutual fund investor is buying partial ownership of the
mutual fund and its assets.
Investors typically earn a return from a mutual fund in three ways, usually on a
quarterly or annual basis:

• Income is earned from dividends on stocks and interest on bonds held in the
fund's portfolio and pays out nearly all of the income it receives over the year
to fund owners in the form of a distribution. Funds often give investors a
choice either to receive a check for distributions or to reinvest the earnings to
purchase additional shares of the mutual fund.
• If the fund sells securities that have increased in price, the fund realizes a
capital gain, which most funds also pass on to investors in a distribution.
• When the fund's shares increase in price, you can then sell your mutual fund
shares for a profit in the market
When researching the returns of a mutual fund, an investor will see "total return," or
the change in value, either up or down, of an investment over a specific period. This
includes any interest, dividends, or capital gains the fund generated as well as the
change in its market value over some time. In most cases, total returns are calculated
for one, five, and 10-year periods as well as since the day the fund opened, or the
inception date.

Types of Mutual Funds

There are several types of mutual funds available for investment, though most
mutual funds fall into one of four main categories which include stock funds, money
market funds, bond funds, and target-date funds.

Stock Funds
As the name implies, this fund invests principally in equity or stocks. Within this
group are various subcategories. Some equity funds are named for the size of the
companies they invest in: small-, mid-, or large-cap. Others are named by their
investment approach: aggressive growth, income-oriented, value, and others. Equity
funds are also categorized by whether they invest in domestic (U.S.) stocks or foreign
equities. To understand the universe of equity funds is to use a style box, an example
of which is below.
Funds can be classified based on both the size of the companies, their market caps,
and the growth prospects of the invested stocks. The term value fund refers to a
style of investing that looks for high-quality, low-growth companies that are out of
favor with the market. These companies are characterized by low price-to-earnings
(P/E) ratios, low price-to-book (P/B) ratios, and high dividend yields.

Conversely, growth funds, look to companies that have had strong growth in
earnings, sales, and cash flows. These companies typically have high P/E ratios and
do not pay dividends. A compromise between strict value and growth investment is a
"blend," which simply refers to companies that are neither value nor growth stocks
and are classified as being somewhere in the middle.

Large-cap, companies have high market capitalizations, with values over $10 billion.
Market cap is derived by multiplying the share price by the number of shares
outstanding. Large-cap stocks are typically blue-chip firms that are often
recognizable by name. Small-cap stocks refer to those stocks with a market cap
ranging from $250 million to $2 billion. These smaller companies tend to be newer,
riskier investments. Mid-cap stocks fill in the gap between small- and large-cap.
A mutual fund may blend its strategy between investment style and company size.
For example, a large-cap value fund would look to large-cap companies that are in
strong financial shape but have recently seen their share prices fall and would be
placed in the upper left quadrant of the style box (large and value). The opposite of
this would be a fund that invests in startup technology companies with excellent
growth prospects: small-cap growth. Such a mutual fund would reside in the bottom
right quadrant (small and growth).
Bond Funds
A mutual fund that generates a minimum return is part of the fixed income category.
A fixed-income mutual fund focuses on investments that pay a set rate of return,
such as government bonds, corporate bonds, or other debt instruments. The fund
portfolio generates interest income, which is passed on to the shareholders.
Sometimes referred to as bond funds, these funds are often actively managed and
seek to buy relatively undervalued bonds in order to sell them at a profit. These
mutual funds are likely to pay higher returns and bond funds aren't without risk. For
example, a fund specializing in high-yield junk bonds is much riskier than a fund that
invests in government securities.

Because there are many different types of bonds, bond funds can vary dramatically
depending on where they invest and all bond funds are subject to interest rate risk.
Index Funds
Index Funds invest in stocks that correspond with a major market index such as the
S&P 500 or the Dow Jones Industrial Average (DJIA). This strategy requires less
research from analysts and advisors, so there are fewer expenses passed on to
shareholders and these funds are often designed with cost-sensitive investors in
mind.
Balanced Funds
Balanced funds invest in a hybrid of asset classes, whether stocks, bonds, money
market instruments, or alternative investments. The objective of this fund, known as
an asset allocation fund, is to reduce the risk of exposure across asset classes.
Some funds are defined with a specific allocation strategy that is fixed, so the
investor can have a predictable exposure to various asset classes. Other funds follow
a strategy for dynamic allocation percentages to meet various investor objectives.
This may include responding to market conditions, business cycle changes, or the
changing phases of the investor's own life.
The portfolio manager is commonly given the freedom to switch the ratio of asset
classes as needed to maintain the integrity of the fund's stated strategy.
Money Market Funds
The money market consists of safe, risk-free, short-term debt instruments, mostly
government Treasury bills. An investor will not earn substantial returns, but the
principal is guaranteed. A typical return is a little more than the amount earned in a
regular checking or savings account and a little less than the average certificate of
deposit (CD).
Income Funds
Income funds are named for their purpose: to provide current income on a steady
basis. These funds invest primarily in government and high-quality corporate debt,
holding these bonds until maturity to provide interest streams. While fund holdings
may appreciate, the primary objective of these funds is to provide steady cash flow
to investors. As such, the audience for these funds consists of conservative investors
and retirees.

International/Global Funds
An international fund, or foreign fund, invests only in assets located outside an
investor's home country. Global funds, however, can invest anywhere around the
world. Their volatility often depends on the unique country's economy and political
risks. However, these funds can be part of a well-balanced portfolio by increasing
diversification, since the returns in foreign countries may be uncorrelated with
returns at home.
Specialty Funds
Sector funds are targeted strategy funds aimed at specific sectors of the economy,
such as financial, technology, or healthcare. Sector funds can be extremely volatile
since the stocks in a given sector tend to be highly correlated with each other.
Regional funds make it easier to focus on a specific geographic area of the world.
This can mean focusing on a broader region or an individual country.
Socially responsible funds, or ethical funds, invest only in companies that meet the
criteria of certain guidelines or beliefs. For example, some socially responsible funds
do not invest in "sin" industries such as tobacco, alcoholic beverages, weapons, or
nuclear power. Other funds invest primarily in green technology, such as solar and
wind power or recycling.
Exchange Traded Funds (ETFs)
A twist on the mutual fund is the exchange-traded fund (ETF). They are not
considered mutual funds but employ strategies consistent with mutual funds. They
are structured as investment trusts that are traded on stock exchanges and have the
added benefits of the features of stocks.
ETFs can be bought and sold throughout the trading day. ETFs can also be sold short
or purchased on margin. ETFs also typically carry lower fees than the equivalent
mutual fund. Many ETFs also benefit from active options markets, where investors
can hedge or leverage their positions.
ETFs also enjoy tax advantages from mutual funds. Compared to mutual funds, ETFs
tend to be more cost-effective and more liquid.

Mutual Fund Fees

A mutual fund has annual operating fees or shareholder fees. Annual fund operating
fees are an annual percentage of the funds under management, usually ranging from
1–3%, known as the expense ratio. A fund's expense ratio is the summation of the
advisory or management fee and its administrative costs.
Shareholder fees are sales charges, commissions, and redemption fees, that are paid
directly by investors when purchasing or selling the funds. Sales charges or
commissions are known as "the load" of a mutual fund. When a mutual fund has a
front-end load, fees are assessed when shares are purchased. For a back-end load,
mutual fund fees are assessed when an investor sells their shares.
Sometimes, however, an investment company offers a no-load mutual fund, which
doesn't carry any commission or sales charge. These funds are distributed directly by
an investment company, rather than through a secondary party. Some funds also
charge fees and penalties for early withdrawals or selling the holding before a
specific time has elapsed.
Classes of Mutual Fund Shares
Currently, most individual investors purchase mutual funds with A-shares through a
broker. This purchase includes a front-end load of up to 5% or more, plus
management fees and ongoing fees for distributions, also known as 12b-1 fees.
Financial advisors selling these products may encourage clients to buy higher-load
offerings to generate commissions. With front-end funds, the investor pays these
expenses as they buy into the fund.
To remedy these problems and meet fiduciary-rule standards, investment companies
have started designating new share classes, including "level load" C shares, which
generally don't have a front-end load but carry a 12b-1 annual distribution fee of up
to 1%.
Funds that charge management and other fees when an investor sells their holdings
are classified as Class B shares.

Pros of Mutual Fund Investing

There are a variety of reasons that mutual funds have been the retail investor's
vehicle of choice with an overwhelming majority of money in employer-sponsored
retirement plans invested in mutual funds.
Diversification
Diversification, or the mixing of investments and assets within a portfolio to reduce
risk, is one of the advantages of investing in mutual funds. A diversified portfolio has
securities with different capitalizations and industries and bonds with varying
maturities and issuers. Buying a mutual fund can achieve diversification cheaper and
faster than buying individual securities.
Easy Access
Trading on the major stock exchanges, mutual funds can be bought and sold with
relative ease, making them highly liquid investments. Also, when it comes to certain
types of assets, like foreign equities or exotic commodities, mutual funds are often
the most feasible way—in fact, sometimes the only way—for individual investors to
participate.
Economies of Scale
Mutual funds also provide economies of scale by forgoing numerous commission
charges needed to create a diversified portfolio. Buying only one security at a time
leads to large transaction fees. The smaller denominations of mutual funds allow
investors to take advantage of dollar-cost averaging.
Because a mutual fund buys and sells large amounts of securities at a time, its
transaction costs are lower than what an individual would pay for securities
transactions. A mutual fund can invest in certain assets or take larger positions than
a smaller investor could.
Professional Management
A professional investment manager uses careful research and skillful trading. A
mutual fund is a relatively inexpensive way for a small investor to get a full-time
manager to make and monitor investments. Mutual funds require much lower
investment minimums so these funds provide a low-cost way for individual investors
to experience and benefit from professional money management.

Variety and Freedom of Choice

Investors have the freedom to research and select from managers with a variety of
styles and management goals. A fund manager may focus on value investing, growth
investing, developed markets, emerging markets, income, or macroeconomic
investing, among many other styles. This variety allows investors to gain exposure to
not only stocks and bonds but also commodities, foreign assets, and real estate
through specialized mutual funds. Mutual funds provide opportunities for foreign
and domestic investment that may not otherwise be directly accessible to ordinary
investors.
Transparency
Mutual funds are subject to industry regulation that ensures accountability and
fairness to investors.

Pros
• Liquidity
• Diversification
• Minimal investment requirements
• Professional management
• Variety of offerings
Cons
 • High fees, commissions, and other expenses
• Large cash presence in portfolios
• No FDIC coverage
• Difficulty in comparing funds
• Lack of transparency in holdings

Mutual Funds: How Many is Too Many?

Cons of Mutual Fund Investing
Liquidity, diversification, and professional management all make mutual funds
attractive options, however, mutual funds have drawbacks too.
No Guarantees
Like many other investments without a guaranteed return, there is always the
possibility that the value of your mutual fund will depreciate. Equity mutual funds
experience price fluctuations, along with the stocks in the fund's portfolio. The
Federal Deposit Insurance Corporation (FDIC) does not guarantee mutual fund
investments.
Cash Drag
Mutual funds require a significant amount of their portfolios to be held in cash to
satisfy share redemptions each day. To maintain liquidity and the capacity to
accommodate withdrawals, funds typically have to keep a larger portion of their
portfolio as cash than a typical investor might. Because cash earns no return, it is
often referred to as a "cash drag."
High Costs
Mutual funds provide investors with professional management, but fees reduce the
fund's overall payout, and they're assessed to mutual fund investors regardless of
the performance of the fund. Since fees vary widely from fund to fund, failing to pay
attention to the fees can have negative long-term consequences as actively managed
funds incur transaction costs that accumulate over each year.
"Diversification" and Dilution
"Diverrsification"—a play on words—is an investment or portfolio strategy that
implies too much complexity can lead to worse results. Many mutual fund investors
tend to overcomplicate matters. That is, they acquire too many funds that are highly
related and, as a result, lose the benefits of diversification.
Dilution is also the result of a successful fund growing too big. When new money
pours into funds that have had strong track records, the manager often has trouble
finding suitable investments for all the new capital to be put to good use.
The Securities and Exchange Commission (SEC) requires that funds have at least 80%
of assets in the particular type of investment implied in their names. How the
remaining assets are invested is up to the fund manager. However, the different
categories that qualify for the required 80% of the assets may be vague and wide-
ranging. A fund can, therefore, manipulate prospective investors via its title. A fund
that focuses narrowly on Congolese stocks, for example, could be sold with a far-
ranging title like "International High-Tech Fund."
End of Day Trading Only
A mutual fund allows you to request that your shares be converted into cash at any
time, however, unlike stock that trades throughout the day, many mutual fund
redemptions take place only at the end of each trading day.
Taxes
When a fund manager sells a security, a capital-gains tax is triggered. Taxes can be
mitigated by investing in tax-sensitive funds or by holding non-tax-sensitive mutual
funds in a tax-deferred account, such as a 401(k) or IRA.
Evaluating Funds
Researching and comparing funds can be difficult. Unlike stocks, mutual funds do not
offer investors the opportunity to juxtapose the price to earnings (P/E) ratio, sales
growth, earnings per share (EPS), or other important data. A mutual fund's net asset
value can offer some basis for comparison, but given the diversity of portfolios,
comparing the proverbial apples to apples can be difficult, even among funds with
similar names or stated objectives. Only index funds tracking the same markets tend
to be genuinely comparable.
Example of a Mutual Fund
One of the most notable mutual funds is Fidelity Investments' Magellan Fund
(FMAGX). Established in 1963, the fund had an investment objective of capital
appreciation via investment in common stocks. The fund's height of success was
between 1977 and 1990 when Peter Lynch served as its portfolio manager. Under
Lynch's tenure, Magellan's assets under management increased from $18 million to
$14 billion.
Fidelity's performance continued strong, and assets under management (AUM) grew
to nearly $110 billion in 2000. By 1997, the fund had become so large that Fidelity
closed it to new investors and would not reopen it until 2008.
As of March 2022, Fidelity Magellan has nearly $28 billion in assets and has been
managed by Sammy Simnegar since Feb. 2019.The fund's performance has tracked
or slightly surpassed that of the S&P 500.

Are Mutual Funds a Safe Investment?

All investments involve some degree of risk when purchasing securities such as
stocks, bonds, or mutual funds. Unlike deposits at FDIC-insured banks and NCUA-
insured credit unions, the money invested in securities typically is not federally
insured.

Can Mutual Fund Shares Be Sold at Any Time?

Mutual funds are considered liquid assets and shares can be sold at any time,
however, review the fund's policies regarding exchange fees or redemption fees.
There may also be tax implications for capital gains earned with a mutual fund
redemption.

What Is a Target Date Mutual Fund?

When investing in a 401(k) or other retirement savings account, target-date funds, or
life-cycle funds, are a popular option. Choosing a fund that is dated around
retirement, like FUND X 2050, the fund promises to rebalance and shift the risk
profile of its investments, commonly to a more conservative approach, as the fund
approaches the target date.
About My Internship

I did an Internship at LWM Services Private Limited for a period of 8 weeks from 10th June till
30th July 2022.

My position at LWM Services Private Limited was finance intern. I gained experience of how to
perform my task and work under pressure.

My Responsibilities were :-

1- To learn about Mutual funds.

2- Working as a part of a team.

3- Interaction with staff for complementing the working of the given department.

4-Interacting with potential customers.

5. Generating leads.

My Learnings

1-Learned how Mutual funds work.

2-Improved communication skills.

3-Learned to work with coordination and commitment

4-On how to deal with different people of different cultures.

Saving and Investment
Pattern in India
Domestic savings mainly fund domestic investment in India. Foreign capital inflows
account for less than 1% of GDP (. India was a primary beneficiary of foreign aid, but
the total amount of aid was not yet necessary compared to the size of the economy.

Reflecting the Indian government's hesitation in inviting foreign investment

uncritically and the highly restricted capital accounting system, foreign direct
investment and other forms of private capital, portfolio investment and banking
flows, The role was even less important.

The relationship between savings and investment has not changed significantly
since the reform in 1991. The temporary pattern of domestic investment rates
effectively reflected the savings rate during the period. The relative share of the
public and private sectors in the GDP mix changed significantly from the early 1950s
to the early 1980s.

Public investment
which increased from about 30% to 50%, accounted for most of the total increase in
investment. However, the rise in investment rates since the mid-1980s may be
primarily due to increased private investment. Private investment since the 1990s has
been a primarily private investment.

Corporate investment accounted for more than 45% of total private investment in
the 1990s. In terms of GDP, private sector investment increased by 4.3% in the late
1980s. Up to 7.1 per cent in the mid-1990s. (On the other hand, domestic investment
fell from 9.3% of GDP to 8.5%.) Investors recognize that the cost of capital will fall due
to import liberalization.

On September 15, 2018, the Reserve Bank of India (RBI) published its latest annual
statistical publication, The Handbook of Statistics on the Indian Economy-2018.
Through this publication, the bank offers time-series data storage on various
economic and financial indicators of the Indian economy.

NRI deposits and more.

Before talking about statistics, let's look at family savings, monetary wealth, and real
estate. Household savings correspond to the total income saved by the household
over some time. Savings and investments in banks, stock exchanges, postal systems,
company deposits, etc., are considered financial assets / financial savings. Investing
in real estate, gold, silver, etc., is a physical savings/asset. Indian Household Savings,
Investment and Responsibility Patterns 2018

Financial and Physical Assets:

What are our preferred assets?
From 1990 to 2000, Indian households preferred to invest in financial assets rather
than tangible assets.

● From 2000 to 2007, more savings were spent on physical assets. Interestingly,
investment in financial assets increased in 2007/08. This indicates that retailers /
small investors entered the stock market when they received the highest ratings. The
market finally collapsed in 2008.

● From 2008 to 2015, we prioritized physical savings over economic savings.

● Total financial savings in 2014-15, 2015-16 and 2016-17 were Rs 12.572 billion, Rs 1.5207
billion and Rs 14.48 billion. Based on 2017-18 data, approximately Rs. 18.8 billion was
invested in financial assets.

● Physical asset savings in 2013-14, 2014-15 and 2015-16 were Rs 14,164, Rs 15,000 and
Rs 12,700, respectively. Data for 2016-'17 was around Rs. 13.9 billion was invested in
physical assets.

● Earlier data in recent years clearly show that physical asset savings have
recovered slightly and financial asset savings have increased significantly (2017 and
2018).

Based on the above data, we can see that from 2017 to 2018, bank deposit savings
fell sharply, and equity investment increased significantly. We can also conclude that
pension funds and reserve funds are in constant influx.
Financial Responsibility of Indian Households (2018):
● From 2017 to 2018, approximately Rs 6,739 million was received as loans from banks
and financial institutions. This figure was around Rs 3,700 in the 2016-17 fiscal year.
Therefore, the financial burden on Indian households has almost doubled.

Bank Time Deposit Data-The following idea of the total amount of unpaid amounts
saved by bank time deposits and deposit holdings (as of March 2018).

● Bank loans in 2015-16, 2016-17 and 2017-18 were 2,747 million, 2.509 and 4.3 trillion,
respectively. A one- to two-year forward deposit was most preferred, followed by a
five-year term deposit (which could be a tax-saving FD).

FD / RD / Avoid long-term investments in conventional life insurance

NRI deposit :
● 2015-16 data: Total due NRI deposits totalled Rs 8.419 trillion, of which NU, FCNR and
NGO deposits were approximately Rs. 4.74 trillion, Rs 3.5 trillion and Rs 672 billion,
respectively. (NGO-Non-resident (external) Rupee account, FCNR-Foreign currency
denominated non-resident and NGO-Non-resident regular Rupee account)

● 2016-17 figures: Total unpaid NRI deposits totalled Rs 7,757 million, of which NRE,
FCNR and NGO deposits were approximately Rs 5,395 million, Rs 1,361 million and Rs
820 billion, respectively.

● 2017-18 figures: total unpaid NRI deposits totalled Rs 8,207 billion, of which NRE, FCNR
and NGO deposits were approximately Rs 5,856 billion, Rs 1.432 trillion and Rs 918
billion, respectively. .. (Bank deposit interest rate patterns (2012-2018))

You may find that interest rates on deposits and loans are declining from 2014-15 to
2017-18. In the current fiscal year 2018-19, we see an increase in the deposit rate and
MCLR (loans).

Post Office Small Savings Plan (SSS) Deposit

● In 2017, Indian households' time deposits and time deposit savings also increased
slightly.

● Since 2011-15, investment in other typical schemes such as NSCs, KVP certificates,
and credit schemes has declined.

Senior Savings or Monthly Income Scheme (MIS); However, this trend reversed
between 2015 and 2017. (Read: "Latest Interest Rates on Post Office Small Savings
Plans 2017-2018")
● Debt fund long-term savings are steadily increasing.

Import of gold and silver

● The Fiscal Year 2014-'15 imported Rs 2.106 billion and $ 276 billion of gold and silver,
and Fiscal Year 2015-'16 imported Rs 207.4 billion and Rs 244 billion, to approximately
Rs 1.843 trillion. Rs 123 billion was introduced in the 2016-'17 fiscal year.

● The 2017-18 figures were that 2.1 billion gold and 207 billion silver were imported.
Therefore, there was a reversal in the trend of gold and silver imports in India last
year.

● The average annual price of gold (10 grams) in 2016-17 was 29,655 rupees, and that
of silver (1 kg) was 42,748 rupees.

● In 2017-8, the average annual price of gold (10 grams) was 29,300 rupees, and
silver (1 kg) was 39,072 rupees. (Investment Trust Scheme: Assets Under
Management Until 2018)

Between 2017-18, the AUM of Indian investment trusts increased by 22%.

Other important notes

● Stock Market Index: The BSE Sensex annual average stock index for the 2016-17 fiscal
year was 27,338, and Nifty was 8,638. The BSE Sensex Stock Index averaged 32,396 for
the 2017-18 fiscal year, and Nifty was 10,424.

● Inflation: The CPI (Consumer Price Index), commonly known as inflation, gradually
declined from 10 in 2012-13 to 3.6 in 2017-18.

● CRR and repurchase rates: In the last quarter of 2018, the RBI raised vital policy
rates such as repurchase rates and reverse repurchase rates. The reserve
requirement ratio did not change. Since August 1, 2018, the latest rates are CRR 4%,
SLR 19.50%, repurchase rate 6.50% and reverse repurchase rate 6.25%.

"What is CRR / SLR / Report?"

● LIC Investment: LIC invested in approximately 2016.525 billion in shares in 2016-17
(up approximately 14%). Between 2017-18, LIC invested about 24,154 million.

● Mortgages: HDFC paid $ 1.712 billion worth of mortgages in 2016-17. HDFC's

mortgage balance is approximately Rs 3,594 million. • Electronic payment systems:
During the 2016-17 fiscal year, the amount paid through "prepaid equipment and
retail electronic cleaning systems" increased.
● NBFC Deposits: The total amount of unpaid public deposits at NBFC will reach Rs
306 billion and Rs 319 billion in 2016-17 and 2017-18, respectively. Related article: "How
can I check that a company can collect public funds?"-Company FD scheme")

● Taxes: In 2017-18, the central government collected a direct tax of approximately Rs

6,245 million. Of this, personal income tax was 267 billion rupees, and corporate tax
was 3,574 million rupees. Six thousand four hundred forty-eight million indirect taxes
have been levied. My opinion

We (Indians) maintain a relatively high net savings rate (the national savings rate is
about 20 per cent of GDP). However, the net savings rate as a percentage of GDP
declined from 2011 to 2012.

References
• https://www.investopedia.com/
• https://mutualglobe.com/
• Wikipedia