20240429 Calibre April 2024 Investor Presentation.pdf
Investment options 2.1
1. International Institute of
Professional studies
Submitted to :-
CA Ishani Maheshwari
Submitted by :-
Churamani Prasad 28
Mayank lobhane 54
Reena Pandey 82
Samiksha Ahirkar 88
3. What is Investment??
• An asset or item that is purchased with the hope that
it will generate income or appreciate in the future.
• In an economic sense, an investment is the purchase
of goods that are not consumed today but are used in
the future to create wealth.
• In finance sense, an investment is a monetary asset
purchased with the idea that the asset will provide
income in the future or appreciate and be sold at a
higher price.
4. Needs of Investment
Earn return on your idle
resources
Generate a specified sum of
money for specific goal in life
Make a provision for an
uncertain future
6. Conservative Investment
Options
• Public Provident Fund – PPF
• National Savings Certificate (NSC)
• Senior Citizen Savings Scheme (SCSS)
• Money Market Funds
• Bank Fixed Deposits (FDs)
7. Public Provident Fund – PPF
• If you belong to the salaried class or
are a small business owner, you
should consider the PPF as your first
option. You do not need to explore
other options before you consider
this. Public Provident Fund offers
almost 99% security being operated
by the government.
8. • Minimum investment of Rs.500 and maximum investment of
Rs.1,00,000(if you’re considering tax deduction under 80C)
• Tax free interest and maturity amount
• One of best interest among fixed income products – 8.7% p.a in
2014
Pros
• cannot withdraw before 6 years.
• A Hindu Undivided Family (HUF) and a trust cannot open a PPF
account.
• cannot open a joint PPF account.
Cons
Public Provident Fund –
PPF
9. Bank Fixed Deposits (FDs)
• A Term Deposit or bank fixed deposit as
it’s often called is a good choice if your
investment period is 6-24 months. It is
very common and simple product.
• smaller banks offer higher interest
rates.The minimum investment period is
30 days.
10. • Easy availability and ease of
operation/withdrawal.
• Good interest rate.
• Safety of capital.
Pros
• Usually early withdrawal has a
penalty.
• Lesser interest compared to
Corporate Deposits.
Cons
Bank Fixed Deposits (FDs)
11. National Savings Certificate
(NSC)
• NSC is a popular choice among
rural Indians. The minimum
investment is Rs.100 and one has
option to choose 5 or 10 year
period. The current interest is 8.5%
for 5 years and 8.8% for 10 years.
12. Senior Citizen Savings Scheme
(SCSS)
• Probably the best investment option plan
if you’re above 60 years. The rate of
interest for Senior Citizen Savings
Scheme is nearly 9.2% now. Usually the
interest is around 1% above the 10 year
government securities yield. So for eg., if
the 10 year yield is 8% in a year, the SCSS
interest will be 9% give or take 10 basis
points.
13. • High interest rate
• Tax saving under 80C
• Provided liquidity as interest is paid
quarterly
Pros
• 15 lakh maximum investment limit
• Tax saving limited to Rs 1 lakh
• Some bank FDs offer higher returns for
Senior Citizens
Cons
Senior Citizen Savings Scheme
(SCSS)
15. Tax saving mutual funds – ELSS
• Equity Linked Saving Schemes belong to mutual fund class.
• It is a plain simple product to get exposure to equity as well save some tax
under 80C.
• The Government of India specifically has ELSS to encourage investments by
common man into equity.
• Contrary to popular perception ELSS funds have generated good returns in last
5 years.
Systematic Investment Plan (SIP)
• Systematic Investment Plan is a smart financial planning tool that helps you to
create wealth, by investing small sums of money every month, over a period of
time. Investing at an early stage of life lets you enjoy the benefits of two
powerful strategies, rupee cost averaging and the power of compounding.
16. Diversified Mutual Funds
•Why are we discussing Mutual Funds if we already discussed ELSS?
While the primary aim of ELSS is tax saving, the goal of diversified
mutual funds is wealth creation to meet goals.
Mutual funds are ideal for an individual investor who can’t follow the
market regularly. It allows a professional to take care of your investments.
17. Direct Equity/Stock Investments
This is for seasoned investor or one who doesn’t like mutual funds, then direct
equity is best for them. They make direct stock purchases of companies which you
feel will do well in the future.
Direct equity investment can be very rewarding.
direct equity investing is very risky.
# Tax implication when we invest directly in
equity
Capital gain tax – If we sell shares between a year of its purchase, capital
gains tax of 10% will be applicable on profit. However if we sell share after
holding time of one year it will not be taxable.
Tax on dividend – All dividends are tax free
18. Real Estate Investments
• You fulfill long time goal
• Own a home Get a safe place for your family to stay
• Good appreciation in India
• Can be financed with low-cost housing loan
Pros
• A self occupied house is not an investment – As it does
not return you any income unless you sell it.
• Tough to buy and the process is detailed. Too many
points to be careful about.
• Prices of some places are artificially driven up
• Can be an illiquid option. You can’t sell it that easy. IF
you’re in hurry, be ready to sell at a discount .
Cons
19. Gold/Commodity investments
• Investment is very easy. You only need cash to invest.
You can buy it from banks, local shops etc.
• Most recognized and reliable way to invest in gold.
• Easy to store.
• Very liquid
Pros
• Volatile and risky as compared to other options.
• You own it in physical form, so threat of theft..
• Initial investment can be large as smaller
denominations are not available.
• Storage cost are much higher i.e. Transaction fee and
annual maintenance charges.
Cons