Professional Documents
Culture Documents
Vivekananda shikshan santhas VIVEKANAND ARTS, SARADAR DALIPSHIG COMERCE & SCIENCE COLLEGE AURANGBAD
By
Mr. BAWASKAR KISHOR BHIMRAO B.B.A.VI SEMESTER 2011-2012Guided by MR. GANESH DOKE.SIR
Vivekananda shikshan santhas VIVEKANAND ARTS, SARADAR DALIPSHIG COMERCE & SCIENCE COLLEGE AURANGBAD CERTIFICATE
This is to certify that project entitled fixed deposit Submitted by MR.BAWASKAR KISHOR BHIMRAO is as per the requirement of Dr.Babasaheb Ambedkar Marathwada university in the partial fulfillment of BBA (Bachelor of business Administration) 6 IV Sem for the academic year 2011-2012
DRICTOR
DECLARATION
I hereby declarer that project worked entitled "production management to the Dr. B. A.M University, Aurangabad , is a record of an original work done by me under the guidance of Ganesh doke sir, faculty member, college institute of management studies, samarthnager, Aurangabad, and this project work has not performed the basis for the award of any degree/ associate ship/ fellowship and similar project if any Mr BAWAKAR KISHOR BHIMRAO BBA 3rd year
Acknowledgement
I like to thanks Mr. Gopal Balloj sir and all teachers of our department who helped me directly or indirectly in completion of this project. I would also like to thanks for their support and cooperation during the tenure of the project.
INDEX
SR.NO
Content
Pg. No
1 2 3 4 5 6
INTRODUCTION COMPANY PROFILE INTRODUCTION OF PROJECT TOPIC SCOPE&OBJECTIVE RESEARCH & METHODOLOGY ANALYSIS OF THE PROJECT
7 8 9
Chapter 1
with invesmant avenves increasing the day it is quit easy to forget that until the reformera kicked off in 1991 indianhad very limited means of investing their saving while it is true that we have net yet the money developed economic ther are anumber of instrument today that were unheard of amidst the lay investors just a short decade age .on the hand investors are still straggling nature of some securities and on the others intermediaries are trying to raise the investors awareness. Stok favorite such as fixed deposits are men while enjoying a reneved burst of popularity . the slump in the capitak market and larger amount o losses by investers in I p o .are buta cauple of facters for this hunt for security by investors evenat the lost of lower returns.the central bank R B I and the market regulatiotion S E B I have been attempatiting to rein in operators from ashing in on this rush for fixed deposit. In fact between 1994 and 1996 afew states like tamil nadu saw literal sxplosiars off fixed deposits offers with promise of impossibal returns like 36 percent to evan so percent per annum is some their saving go uping smoke at the hand of such corporate entities . it is only recentily that credit rating has been made mandatory for fixed deposit raising exercises as werw prudential norms howeres the batterlesson result in investors ignoting almost allother factors barring security while investing ther saving thus the past two yerrs having seen a huges growth in hand deposit and in fixed deposit levels of the batters segment of india. In this segment we willreglotry past detaiks on the three main categories of fixed deposits. The fund can be used to pledge lone if a fix deposit maturity day is approaching but a customer need fund urgently than the customers can apply for pledge loan to avid interst loss.
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The und can be withdrawn ahead of the marurity day If customer need fund argently they can also apply for withdrawing ahead of the maturity day if the customer want to totallywithdrowan the fund before the maturity day
fixed deposit refers to the service that customer set deposit term whan making depositand deposit principle at one time .after whichthey can totally a partially withdraw principle and interests. Higher interst rate the interst rate of fixed deposits are higher than that of currant deposit fixed deposit is a traditional wealth management tool the longer the interest rate .
the account can set to re deposit customers can set re deposit term whan makingdeposit and the principle and past tax interest will be automatically re deposit term on the maturity day. . The fund can be used to pledge lone if a fix deposit maturity day is approaching but a customer need fund urgently than the customers can apply for pledge loan to avid interst loss. The und can be withdrawn ahead of the marurity day If customer need fund argently they can also apply for withdrawing ahead of the maturity day if the customer want to totallywithdrowan the fund before the maturity day
11
12
emergency situation. At times, the lending institution where the fixed deposit is placed may be willing to extend a separate loan to the account holder, using the fixed account as collateral. While not ideal, this can at least make it possible to deal with the current financial crunch. Fixed deposits are a credible way to make a return on investment that is somewhat higher than a standard savings account. The use of fixed deposits can also be helpful when working with various types of currency. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it is possible to choose the type of currency involved in the deposit and lock in a rate of interest. If the choice of currency is a good one, this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the deposit and earn more than with a standard fixed deposit strategy. However, going with an FCFD does contain a slightly higher amount of risk, since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled. If the currency did not fare well in the interim, there is some chance of obtaining a loss, due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete .
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Chapter 2
INTRODUCTION OF BANK
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Deogiri Nagri Co- oprative Bank Was Established In 23th Jan 1984. The bank have 18 Branches including their Training Centre. The modern DATA centre , head office. All Offices are Air Conditioned , well equipped , fully computerized and interconnected. Deogiri Bank is the first bank in Marathwada to opt core banking pattern for its working. The bank is in the process of establishing ATM all over the city to cater banking services to its customer round the lock. The concept of Deogiri Nagri Co- oprative Bank was originated by Late Pralhadji Abhayankar & the bank came into being under the dynamic leadership of Shri. Haribhau Bagade (Ex Minister), Late Shri.Jayantrao Choudhari (Dhamangaonkar), Late ShriChandumalChotlani, Late Dr. V.G. Gharpure, ShriSukhdevNawle, Mrs. KumudRangnekar, Shri S.G. Gokhle, Dr M.U. Deshpande, Shri G.R. Rege took active part in establishing of the bank. The first branch of the Bank was opened on 23th Jan 1985. At present the bank has its area of operations in Aurangabad, Jalna, Ahemadnagar, Parabhani&Jalgaon District. The Reserve Bank has opened all Maharashtra as area of operation for us. The bank is also planning to tie up with state and national players to expand its network. The Bank has raised paid-up capital of 14.79 crores paid through its 33,000 Members. On 30-Jun-11 the Bank owns funds and reserves of 114.79 crores. The bank has Deposits of 456.22 crores, Advances of 333.66 crores, thus the total business is of 789.88 crores.
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The CRAR of the bank is 11% and the Net NPA 0.20%. which is one of thbest level. The performance of the Bank is the best in co-operative banking sector.
Bank Profile
Deogiri Nagri Co- oprative Bank is largest bank in Marathwada. Any type of financial problem for any sector of business bank supporting to them. Bank has good Asset value and efficient staff for achieving their desire goal. Deogiri nagri Co- oprative bank get permission from reserve bank of india to launch four new branches in pune city. In upcoming year bank use new and advanced technology, mobile van service,pre printed cheque books facilities to the customer.for growing the whole income of the bank bank made contract between new life insurance companies. Member and recover share capital is the power of co- oprative organization.own fund is the economical capacity of any commericial organization,increment in that fund it reflect confidence of member over the bank.at time of year ending bank get the Rs.14.38cr share capital from 32688 member.comparism with last year performance between member & share capital. 2687 member and recover share capital Rs.1.92cr it is extra. According to banks rules and regulations member have to purchase 2500 Rs.share for membership.
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Deogiri nagari Co- oprative bank have 100.06cr fund at the time of year ending. It is extra camparing with last yaer performance. The amount of extra fund is 4.21cr rupees in percentage 4.39% .bank move their maximum profit in reserve fund from net profit and increase their goodwill. This is emblemof bank management and efficiency. In 2010-2011 bank started to provide fund supply in all sector, it is good for bank growth for that purpose establishment of new branches, making technical side perfect etc.getting that benefit bank made expenditure on it. Because this reason the bank had get Rs.7.22cr. net profit. 4.10cr profit is extra compare with last year performance.
Capital availability
The ratio between total risk part of property and capital fund is called as capital availability. In open economy the capital availability is the good for people co- oprative bank system. successful management of risk and growth in capital fund Deogiri nagari Co- oprative bank done 11.79% the ratio of capital availability on dated 31th march 2011. Accordinf to reserve bank of indias rules and regulations it is compulsory keep to maintain 9% (Amount in lacs) No. A B C D E Particulars Tier-1 capital Tier-2 capital Total capital(A+B) Total risk weight of property C.R.A.R. 31/03/2010 3852.26 782.39 4634.65 31197.45 14.86% 31/03/2011 3033.98 1107.55 4141.53 35120.07 11.79%
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Depostie
Deogiri Nagari Co- oprative Bank have available Rs. 458.99cr Deposite at time of report year ending. After using all facility and securities which provided by bank people made their fixed deposite in bank, because of that reason bank have increase their deposite fund for the rupees of 51.01cr. which is 12.50% extra comparing with last year performance. To adjusting with national level changeable commercial environment bank have change deposites scheme and keep the cost of deposite is .5.75%. For the purpose os deposite security bank have made insurance from reserve bank of indias Deposite department , installment of that insurance bank has been fill regularly.
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Loan
The total amount of loans are Rs.322.67crat the time of report year ending. It is extra of Rs.40.49cr compare with last year performance in percentages 14.35% .at the time of new loan issue,bank were done loan investigation and risk management. Deogiri nagari co- oprative bank follows all rules and regulations regarding loan distribution to weak sector. The ratio of primary sector loan at the time of year ending is 54.62% and another ratio of weak sector loan distribution is 18.10% bank. Bank tries to distribute small scale loan to public.
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(Amount in lacs) Loan Distributed Account No. Loan Amount 141 118.44
No. 1. 2. 3. 4. 5.
(Amount in lacs) Particulars Notice from office Notice from advocate Cases to bring a charge but under hiring(section 91,101) Cases under hiring but not awarded(section 91,101) Awarded(section 91 , 101)
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Total
4494
5408.05
Investment
Deogiri Nagari Co- oprative bank have Total investment on dated 31th march 2011 is Rs.208.83cr.comparing with last year investment it is extra 7.52cr. making good plan for loan recovery and trying its implementation it reflecting with increasing bank liquidity and this is also useful for investment increment. Bank liquidity management is on top at time of report year ending. Bank follows CRR and SLR rules and regulation from the date of its foundation. Minimum 25% amount is compulsory to invest in government securities. Deogori nagari co- oprative bank invest in government securities Rs.119.04cr in percentage 26.26% on dated 31th march 2011 at the time of report year ending.
Insurance business
21
Bank made insurance from insurance companies to secure their securities amount. Lot many insurance companies coming in that market follow all rules and regulation. Bank made such transaction with different insurance companies and reserve bank of india give permission for that. Bank made contract for general insurance between FUTURE GANERALLY INSURANCE COMPANY PVT.LTD.in report year.
Computerization
Bank started SMS service for each and every account holder for their each every transaction.in upcoming year bank start NET Statement facility for every transaction. Bank make mutual contract between another bank for ATM transaction. Using advanced technology bank tries gives good service to the customer. Bank knows needs of customer. Bank use computer technology with their perfect security. Bank provide RTGS and ECS facility to customer for more than two lacs transaction with ICICI bank.
Profit Distribution
Deogiri Nagari Co- oprative bank earned net profit Rs.72199901.84 at the report year ending, with last surplus net profit of Rs.72.02 including this total net profit Rs.72199973.91 are available.
22
9.
73.91 72199973.91
23
No. 1. 2. 3. 4. 5. 6. 7. 8.
Particulars Director Board Meeting Loan Committee Meeting Loan Recovery Committee Meeting Worker Committee Meeting Audit And Inspection Committee Meeting Purchase Committee Meeting Investment Committee Meeting Assets liabilities management committee meeting
No. Of Meeting 20 18 05 05 02 06 06 06
101025977.36 25849315.35
19317692.75
40576175.31
146192985.46
167926 813.25
513195258.00
328611576.00
24
689394454.00
1202589712.00
794911500.00 8500000.00
0.00 0.00
and district centralized banks term deposits Nationalized and other commercials banks term deposits Investment (shares) District centralized and state cooprative banks shares Trustee Org.& other share Co- oprative Org. Shares Aurangabad district centralized bank Maharashtra co- oprative bank. Mumb ai Apex Bank,Mumbai Pvt. Fund Investment State partnership fund/fund investment
555123962.00
883735 538.00
1190444000.00 7000000.00
0.00 0.00
2199028300.46 613620.00 Loan issued Short term loan Government security shares 362949.00 National
232751 0987.2 5
25
33879457.00 97422689.41 29677911.11 686637712.59 9063452.00 8575762.00 3005550.59 2471952.00 438965081.48 1310313188.18
security Other security Gold/silver security Term deposits security Cash credit/overdraft Mortgage security cash credit Default guarantee payment account IBP and Bills Discount Advanced against supply bills L.C. discounting Project financing Arrears Rs.371430386.00 Suspected and bad debts Rs.200795129.80 Arrears of directors board Middle term loan Higher purchase/ vehicle security Mortgage term security Personal guarantees Home
44331103.05 130213650.87 13546991.61 889674881.52 8957889.00 1118332.00 3009365.59 535000.00 442992687.48 1534742850.12
26
construction Other
2821752720.74
282226681.66 Arrears Rs.162795044.00 Suspected and bad 211130327.00 debts Rs.105287650.12 493357008.66 Arrears of board of director Long term loan Home construction loan Industrial & Other loan Arrears Rs.6579481.00 Suspected and bad debts Rs.22199694.75 Arrears of board of director Total loan
322672 2631.3 6
5020781021.20 4132348.44 28870014.74 121627533.43 526830.45 28282793.00 566107983.98 594390776.98 Bills available for recovery Dead stock, furniture, fixture Building and land Bank vehicle Interest receivable On investment On loan
555423 3618.6 1 272372 2.75 327486 78.77 26963487.00 684301167.73 119397 677.68 216215 1.45
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711264 654.73 6085394.29 6584.00 760317.53 1835584.00 778980.00 16590.00 1116107.00 0.00 346500.00 30000000.00 23513254.47 64459311.29 0.00 152509595.00 7885656.35 0.00 5995183087.88 830490.00 64016380.00 Branch coordination Differed tax assets Goodwill on merger account Loss (if Happened) Total LC Bank gurantee receivable Other property & Receivable Deposits receivable Library books Stationary & printing stock Deposits for building Clearing Telephone deposits Building rental in advance M.S.E.B. Deposits Tax receivable Advance tax paid Other receivable 3012099.12 7077.00 1084504.59 1835584.00 1611681.00 201703.00 300000.00 548638.00 42779987.00 55620000.00 6441851.96 113443 125.67 461308 .36 156578 871.00 591424 2.26 0.00
28
29
50114486.17
174375.00 6537336.00 1067462.85 1546328.00 1770955.78 69500.00 3750540.50 419675.00 616130.00 7909089.32 30000.00 7951108.04 2587515.36 0.00 168952.00 50587577.00 7528972.00 43058605.00
Salary, allowances, providend fund, gratuity, P.F. Management expenditure, Bonus etc. Director Fess & allowances Rent , tax, insurance,lig hting Post offices ,telephone & fax charges Auditing charges Stationary , printing and advertising Legal advisor fees Fixed insurance 46560495.00 premium (4069276.00) General council expenditure Commission Depreciation State cooprative education fund Office expenses Other expenditure Election expenditure
75805941. 36
174750.00 6568092.0 0 1645075.3 8 1774391.0 0 2060917.7 0 150000.00 4213995.5 0 409849.00 563426.00 8765356.0 0 30000.00 9760184.9 8 1494793.9 4 0.00 170566.00
42491219. 00
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Fringe benefit tax Other provision Suspected and bad debts provision Standard assets provision Investment depreciation Goodwill on merger account Total Net Profit Total
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Interest received 350447467.81 On Loan 133703203.86 On Investme nt Commis sion & bill of exchang e Investiga tion charges and other income Locker rent Extra refund provisio n
4841506 71.67 3342284 .99 1019367 8.69 1692459 .44 2484335 2.00
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NOTES FORMING THE PART OF BALANCE SHEET AS AT 31st MARCH 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2011. Significant accounting policies: Accounting convention: The financial statements are drawn up in accordance with the historical cost conventions and on the going concern basis. It conform to the generally accepted accounting principles & practice prevailing in the co- operative banks in India except otherwise stated. Statement of compliance: The consolidated financial statement of bank is prepared in accordance with Indian accounting Standards. Investments: In accordance with the Reserve Bank of India directives applicable to Urban co- operative banks, the bank has classified its investment portfolio as on 31st march 2011 under held to maturity. Further, in complicance with the said the valuation of investments under Held to Maturity category have been valued at acquisition cost. Any premium on acquisition of security is amortized over the balance period of maturity. Advances : The bank has clasified advances into standard, doubtful and loss assets in accordance with the guideline issued by Reserve Bank Of India from time to time. Provisions on advances classified as sub-standard, doubtfuland loss assets is made in accordance with the directives issed by the Reserve Bank Of India from time to time. In addition, a general provision has been made on all standard Assets as per Reserve Bank Of India directives. An additional provision of Rs.1654.76 lacs has been made for BDDR over and above the provision as required by Reserve Bank Of India directives.
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The overdue interest in respect of advances classified as NonPerforming Assets is provided saparately under Overdue Interest Reserve: as per the directives issed by the Reserve Bank Of India Provision for loan Losses specific provisions for possible loan lossesare based on a continuous review of the loans and advancesportfolio and the parameters set the Reserve Bank Of India
Accordingly, specific provisions have been made as follows: Sr. No. Particulars Amount (in Lacs) 1. Gross NPA 4225.04 2. Provison as per RBI Norms 2512.75 3. Additional Provision 1652.76 Fixed Assets And Depreciation: Fixed Asset are stated at historocal cost except premises which includes land and Buildings which are stated at revalued amount. cost includes incidental expenses incurred on acquisition and installation of the assets. Land and building were revalued during the financial year 20072008 and asset Revaluation Reserve is created to the extent of revalued cost. Depreciation is calculated on written down value basis on fixed assets. Depreciation charge on revalued amount is debited to the revaluation reserve. Fixed asstes are depreciated at the rate considered appropriate by the management. Details are listed below: Assets Method Rate Premises WDV 2.5% Furniture & Fixtures WDV 10% Vehicle WDV 15% Electrical % Electronic Items WDV 25% Computers WDV 33.33%
Depreciation on fixed assets purchased during the year is charged for the full year, if the assets is purchased and retained for 180days or more, otherwise it is charged at 50% of the normal rate. No depreciation is charged on fixed assets sold/disposed off during the year as per generally accepted norms.
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Revenue Recognition
standard-9 issued by Institute of Chartered Accountants of India on revenue recognition, the interest receivable is recognized on accrual basis. Interest ceases to be taken into revenue when the recovery of interest and/principal is in arrears for three months or more. Interest received on advances classified as non-performing is accounted for on cash basis. Interest falling due and remaining unrealised on non performing advances is credited to overdue interest reserve account. Fees and commission Income: The bank earns fees and commission income from a diverse range of services it provides to its customers. This includes fees and commission income arising on financial services provided by bank. Fees and commission income other than fees receivable are recognized on cash basis. Commission received in advance on bank guarantee is shown as advance commission received.
Segment reporting:
According to accounting standard-17 on segment reporting issued by the institute of chartered accountants of India, a segment is a
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distinguishable component of the group that is engaged in providing services (Business Segment) or in providing services within a particular economic environment (Geographical Segment) which subject to risks and rewards that are different from those of other segments. The AS-17 on segmental information is not applicable to the bank.
Taxation:
9.1 Current taxation
Current tax assets and liabilities consist of amounts expected to be recovered from or paid to the taxation authorities in respect of the current as well as prior years. The tax rates and laws used to compute the amount are those that are enacted or substantially enacted by the balance sheet date. Provision for taxation is made on the basis of the profit for the year as adjusted for taxation purposes in accordance with the provisions of the relevant statues.
11. Goodwill
Goodwill is amortised over 5 years.
36
12.
of.
Events Occuring after the balance sheet date are taken care
14.
st
Reconciliation of various inter branch accounts is made up to 31 March 2011. The Bank is taking effective steps in adjusting the outstanding entries.
16. Previous years figure have been regrouped/ rearranged whenever necessary to confirm to the presentation of the accounts of the current year.
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3.
Advance against Real Estate Construction business Housing Advances against shares debentures Advances to directors & their relatives, companies, firms in which they are interested Funds Based Non-funds Based Average cost of deposits NPAs Gross NPAs Net NPAs Movement in NPAs Towards NPAs Opening balance (+)Additions during the year (-) reduction during the year Closing balance Profitability Interest income as percentage of working funds Non interest income as percentage of working funds Operating profit as percentage of working funds Returns on assets Business (deposits + Advances) per employees Profit per employees
4. 5.
6. 7.
8.
9.
10. Provision made towards NPAs Depreciation in investment 11 Movement in provisions Towards NPAs
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Opening Balance (+) additions during the year (-) Reduction during the year Closing balance Towards depreciation on investments Opening balance (+) additions during the year (-)Reduction during the year Closing balance Towards standard assets Opening balance (+)additions during the year (-) reduction during the year Closing balance Towards NPAs Towards depreciation on investment Towards standard assets Foreign currency assets Foreign currency liabilities
151.16 0.00 4171.92 380.20 69.13 0.00 449.33 108.66 4.94 0.00
186.58 190.99 4167.51 449.33 99.23 0.00 548.56 113.60 20.66 0.00
113.60 4171.92 449.33 113.60 Nil Nil 134.26 4167.51 548.56 134.26 Nil Nil
12.
13.
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We have audited the attached balance sheet of DEOGIRI NAGARI CO- OPRATIVE BANK LTD. AURANGABAD as at 31st march 2011 and also annexed thereto profit and loss account of the bank for the year ended on the date annexed thereto. These financial statements are the responsibility of the banks management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. further to our comments and observations contained in audit memorandum in part A,B and C, we report that; We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. In our opinion, proper books of account as required by Law have been kept by the bank so far, as appears from our examination of those books. The balance sheet and profit and loss account dealt with by this report, are in agreement with the book of accounts. In our opinion, and to the best of our information and according to the explanation given to us, the said account give a true and fair view, in conformity with the accounting principles generally accepted in India. Other point as per part A,B And C our report:
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In case of balance sheet, of state of affairs of the bank as 31st March 2011 In the case of profit and loss account, profit of the bank for the ear ended on the date. For the year 2010-2011 audit class A is awarded to Bank.
For INDAPURKAR & MUNDADA Place: Aurangabad Date: 30/06/2011 Chartered Accountant
Chapter 3
Fixed Deposit
41
42
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cannot sell the documents to recover his capital, thus making them a risky investment option
Term of deposit
A term deposit account is an account where the investor / depositor agrees to a fixed term and interest rate for locking their money away in an account. These accounts offer more security on the rate of return that the investor can expect when compared with high interest savings accounts. The history behind the term deposit is that the bank offers a higher interest rate and return to the depositor when there is certainty over the length of time that the bank can have access to the depositor's money to re-lend to other borrowers (and therefore make a profit). The bank rewards the secured term from the depositor with a higher interest paid to the depositor. Term deposit accounts are a 'fixed return' option to compare against high interest savings accounts, however high interest savings accounts now feature very comparable interest rates to those offered on term deposits (historically term deposits offered far higher rates of interest than a traditional savings account). The key difference is that the interest rates on savings accounts are variable. A term deposit is an account where you deposit your money and at the time of deposit, you know in advance how much you will be paid in interest, and when you'll be paid. When selecting your term deposit, you will see different rates of interest available from the bank / institution for different terms. As an investment vehicle, term deposits are easy to establish and quick to get started, unlike an investment in property or the stock market which both have significant lead time.
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45
The following options apply for payments of term deposits: Less than one year: Maturity - your interest is paid at the end of the term Longer than one year: Maturity - your interest is paid at the end of the term Longer than one year: annually, semi-annually, quarterly interest payment options are also available. The payment frequency differs between term deposit providers so be sure to pick an interest payment time frame that suits your requirement for income. Both the banks and depositors view term deposit lengths in the same way: Short-term term deposits: one month deposit through to six month deposits. Long-term : term deposits over 12 months in length and up to 5 years, and in some instances up to 7 years. We compare the term deposit options.
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Automatic Rollover
At the conclusion of your term deposit, your term deposit provider can automatically roll over your matured deposit to a new term deposit of the same period as your original, at the new interest rate offered for that new term.
47
than a fixed interest amount. This is only available to accounts over at least one year in length as monthly interest payments are not available on terms shorter than one year.
48
On the flip side, a fixed deposit won't give you the same returns that you may get in the stock markets. For instance a stock-portfolio may rise 20-30 per cent in a good year whereas a fixed deposit typically earns only 7-10 per cent. A fixed deposit also doesn't offer protection against inflation. If inflation rises steeply during the maturity of the Fixed Deposits your inflation adjusted return will fall. Say, for example, the inflation when you deposited the money at a fixed return of 8 per cent per annum is 3 per cent. Now when your Fixed Deposit matures say after 2 years, the inflation increases to say 5 per cent.In this case, your inflation adjusted returns is only 3 per cent (8-5). Had inflation remained at 3 per cent by the time your deposit matured, your real rate of return would be 5 per cent (8-3).
Effective Return
Before you invest in Fixed Deposit you need to understand the concept of effective return which is higher than the rate of interest on the Fixed Deposit. Effective return is relevant if you choose to reinvest your interest every year which means that you will be earning compound interest.
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For example suppose you invest Rs 1,000 in a fixed deposit with 8 per cent interest which is paid quarterly.
50
51
Certificate of Deposit
A certificate of deposit (CD) is a type of fixed deposit account that can be purchased in varying amounts from a credit union, traditional bank or other depository institution. A CD is a commercial paper that confirms the monetary value of the deposit made, its maturity date and the interest applicable on the amount loaned. Certificates of deposit mature in one month, three months, six months, 12 months (one year), 36 months (three years) and 60 months (five years). Interest rates accrued on certificates of deposit are quoted on a yearly (annual) basis.
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A revolving term deposit renews itself automatically for another term of an equal length after its loan period expires. Depositors can put money in a revolving term account through a cashless transfer from an existing account or by direct transfer. The terms on revolving fixed deposits range between one week to 12 months
Holiday Account
A holiday account, also called a Christmas Club account, is a special type of fixed term deposit that allows a depositor to put aside, and add, small denomination funds till the account matures. Cash cannot be withdrawn from the account till it reaches its expiration date. A holiday account can be thought of as a short-term savings account that secures a depositor during a holiday season. Some financial institutions and banks require a minimum initial deposit before they can open a holiday account. Christmas club accounts accrue monthly interest, the entire amount of which is paid when the account matures, typically right before Christmas.
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Although the terms of specific Fixed Deposits can vary significantly among financial institutions and countries, Fixed Deposits generally differ from checking and savings accounts because they cannot be used as money by allowing the account holder to make withdrawals without incurring a significant penalty. They also differ from such accounts by having a fixed maturity date after which funds are either returned or rolled over
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Time deposit
A Time Deposit requires the placement of cash in a savings account at a fixed rate of interest for a certain term or time period. Funds generally cannot be withdrawn from a Time Deposit prior to the end of its term without incurring a penalty.
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6 month deposit
A 6 month term deposit is often referred to as a short term investment due to the short time horizon of less than 1 year. For a period of fixed product 6 months, major banks can follow or anticipate central banks when determining the rates they publish for depositors. In countries such as India who offer 'term deposits' as savings products from banks, the Reserve Bank of India issues guidance from its meetings and rate decisions indicating reasons for increasing, lower or keeping the same interest rates. These decisions have a major impact on what rates India banks publish.
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1 Well one disadvantage is being 'hooked' into spending inordinate amounts of time in front of a screen editing spelling and grammar mistakes that people make when asking questions here. (lol) Another 2 if the interest rate increases, they will not increase your. it will be based on the initial rate 3 The major disadvantage of a fixed deposit is that you cannot withdraw the amount instantly when the need for money suddenly arises. Another disadvantage of fixed deposits is that it is prone to 4 You can't withdraw the deposited money back until the terms of deposit completes. for example.: You deposit your money into the FD for 5 years upto Rs.50,00,000/-. After 2 years of deposit, U need the deposited money in FD, you can't withdraw back without completion of the deposit amount
Chapter 4
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To know the fixed deposit position of R.B.I To identify the position of fixed deposit on total deposit
To comparing fixed deposit of R.B.I with total commercial bank and Indian Bank Ltd. to know its actual financial position and performance
To sketch the trend of fixed deposit of R.B.I To see how far the bank is able to utilize the collection deposit
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To provide suggestion and possible guideline to improve the bank fixed deposit position based on the finding of the study
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In sense of profitability then invest less in fixed deposit try to invest in shares if you are a good player in share market.
I am a central govt servant, my monthly net salary is 17500, how can i save the tax by investing. and what kind OF benefits get from govt. pl help me
At present, there is no scope of short term investment in equity based mutual fund. Go for atleast two or three years please. Market is at it peak lev. I really appreciate tht you have taken an initiative 2 invest & grow......But at least take a look while choosing a category to post .
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As crr is hiked money will be scarce with bank so who ever wants to take loan it will be dearer but without increasing fixed deposit rate so people
Chapter 5
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Research Design:
The first step of the study is to collect necessary information and data concerning the study of R.B.B fixed deposit by contacting the concern staffs. The task will be fulfilling by the collection of secondary data and Primary data and various published information regarding this context. Then the collected data will be presented and analyzed systematically to fulfill the objective of the A deposit of money that pays higher interest than a savings account but imposes conditions on the amount, frequency, and/or period of withdrawals. Also called time deposit. Receipt issued by a depository institution (such as a bank, credit union, or a finance or insurance company) to a depositor who opens a certificate ac...
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Fixed Deposit is the most common form of savings all over the world, specially in India. A Fixed Deposit involves locking a certain amount of money for a certain time period with a government approved institution, it can be a bank or a corporate offering fixed deposits to raise money for its business, etc
Prmaary data
1 Source of data
The various data require for the study is collected from concern authorities i.e. R.B.B. and Nepal Rastra Bank. Data required is collected through primary data and secondary data. Primary data is collected from concern authority by asking them question or by taking the interview. Secondary data is collected from the annual report, banking and financial statistics, quarterly economic bulletin, Papers and magazines, which were published, by R.B.I
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All the necessary data were collected on various issues from R.B.I and N.R.B. This study is based on secondary data but interview techniques has also been used to collected information on the fixed deposit of the bank. The collected data are processed by tabulating and arranging in a required form for the sequential analysis of data.
3
Then an attempt has been made to analyze the tabulated data to review the financial aspect of R.B.I. For the analysis of data the various statistical tools like percentage change, bar diagrams, pie - chart, time series and correlation will be taken in to use. In this regard, the analysis will be mainly based on financial aspect.
Secondary data
1 Fixed deposits are money deposited by the customers for a fixed period, which range from 1 week to 5 years. Such as 1 week, 2 week, 3 months, 6 months, 9 months and 1 to 5 years. Fixed deposit is also known as time deposit or time liabilities. 2 Fixed deposit is the main source of funds. Bank uses this sum of money in its investment activities. Out of the total deposit higher percentage comes from fixed deposit account as it most stable of all deposit. As it is permanent sources of funds, bankers use this fund to long-term investments, which gives higher return to the bank. Bank does not need to maintain higher
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cash balances to meet the demand of such account holders because banks have fixed the expiry of the account per head. 3 In Nepal, any fixed deposit can not be withdrawn before the maturity period. However, upto 90% deposit can be withdrawn as loan. The bank will charge 2% more than the interest paid to the depositors for granting loan against deposit. The bank pays a higher interest on such deposit. But interest provide by the bank depends upon its time duration. Bank repays the fixed deposit principal together with interest after maturity period. 4 The best fixed deposit interest rate can come from a different bank than the one you're currently using, so you might want to check into that also. Fixed deposits can be great for saving money when you don't think it's possible or simply are having a tough time saving period. It's definitely something to think about right now with the economy and the threat of no more Social Security - you should always have a back up plan.
The bank is free to make use of this money for granting loans and advances
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Bank pays a higher interest on such deposit in comparison with other deposit.
Any additional amount can not be allowed to deposit in the fixed deposit account before the maturity period.
Bank repays the fixed deposit to customer principal together with interest after maturity period.
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You have to split the fixed deposit to avoid the TDS(Tax deduction at Source). If the total interest is more than Rs.10000 in a branch for the specific year, then TDS must be paid. To avoid that please split the fixed deposit and invest in the different banks. 2. Plan
the Tenure
It is important to plan the number of years you want to keep the deposit. Banks will charge as penalty if you are foreclosing the deposit account. Please ask the banker for penalty applicable for the foreclosing. 3. Appoint
a Nominee
Always appoint a nominee for your fixed deposit to avoid the hassle free release of amount after you. If you are not appointing any nominee, they will have to bring any of the heirs proof certificate to receive the money. 4. Check
This is one of the important consideration while opening a fixed deposit account. When you hear the rate of interest is 8.0% p.a., first thing you have to ask whether it is compounded quarterly, half-yearly or yearly. If the interest is compounded quarterly, then the return rate of interest will be potentially more than the actual one. 5. Learn
If you are not aware that the fixed deposit savings can be used for tax benefits, please learn about the tax savings on fixed deposit. It has limitation of Rs.100000 under section 80c. Might be useful if you are looking for the same one.
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Chapter 6
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70
71
31/3/2011
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7.75
8.25
7.75
7.75
7.75
11.50 9.25
12.00 9.75
12.00 9.75
12.00 9.75
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Chapter 7
LIMITATION OF STUDY
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Taxation in case of debt funds is more investor friendly when compared with fixed deposits especially for the investors in higher tax bracket In the short term investment horizon, investor gets the benefit of lower dividend distribution tax in debt funds In the long term investment horizon, investor gets the benefit of indexation in debt funds Debt Funds are highly liquid as the amount invested can be redeemed indays unlike fixed deposits where money gets locked in for a fixed period of tim Though the pre tax returns are in the same range of 8-9%, but variation can be seen in post tax returns. Let us discuss two scenarios: Debt Funds are more liquid than Fixed Deposit Debt Funds deliver better post tax returns when compared with fixed deposits In the short term and long term investment horizon, investor earns better post tax returns by investing in debt funds.Fixed depositgives limited but assured returns.Stocks can give very high returns or even very high losse Debit card is a facility to withdraw your own deposi ed money in the bank. Credit card as the name denotes, you make advance arrangement with a bank
I think there is no certain limit but one loses the interest on such a big amount as the interest rate is very low in savings bank ac and hence he lo. Loan is a fixed amount and to be paid in a certain period OF time where as in cash credit a limit is fixed and u have to be in that limit always a...
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Chapter 8
SUMMARY&CONCLUSION
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Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on deposit earns a fixed rate of interest, according to the terms and conditions that govern the account. The actual amount of the fixed rate can be influenced by such factors at the type of currency involved in the deposit, the duration set in place for the deposit, and the location where the deposit is made. The most unusual characteristic of a fixed deposit is that the funds cannot be withdrawn for a specified period of time. In most cases, fixed deposits carry a duration of five years. During that time, the money remains in the account and cannot be withdrawn for any reason. Individuals, corporate entities, and even non-profit organizations that wish to set aside funds and limit their access to the funds for a period of time often find that fixed deposits are a simple way to accomplish this goal. As an added benefit, the monies in the account will earn a fixed rate of interest regardless of any fluctuations in interest rates that apply to other types of accounts. However, both these benefits can also turn into disadvantages under certain circumstances. Because the money cannot be withdrawn until the duration is complete, the funds cannot be used even in emergency situations. Changes in the going interest rate may also rise to a point above and beyond the interest rate applied to existing deposits. This means account holders are actually earning less interest with fixed deposits than with other types of loans and accounts. where the While the interest rate on fixed deposits cannot be changed, there is sometimes a way to work around the issue of obtaining use of funds in an emergency situation. At times, the lending institution fixed deposit is placed may be willing to extend a separate loan to the account holder, using the fixed account as collateral. While not ideal, this can at least make it possible to deal with the current financial crunch. Fixed deposits are a credible way to make a return on investment that is somewhat higher than a standard savings account. The use of fixed deposits can also be helpful when working with various types of currency. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it is possible to choose the type of currency involved in the deposit and lock in a rate of interest. If the choice of currency is a good one, this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the
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deposit and earn more than with a standard fixed deposit strategy. However, going with an FCFD does contain a slightly higher amount of risk, since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled. If the currency did not fare well in the interim, there is some chance of obtaining a loss, due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete.
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Chapter 9
BIBLIOGRAPHY
deogiri nagari sahakari bank ltd aurangabad adderss: arth complex kesrsingpura, adalt rode aurangabad