SUMMER TRAINING

PROJECT REPORT

ON

A STUDY OF CUSTOMER INVESTMENT BEHAVIOR

ON THE BASIS OF AGE AND OCCUPATION

SUBMITTED TO PUNJAB TECHNICAL UNIVERSITY

IN PARTIAL FULFILLMENT FOR THE REQUIREMENT OF 2 YEARS

FULL TIME POST GRADUATE PROGRAM IN MANAGEMENT

2007-08

Submitted By:-

MENAKSHI BEHRA

ROLL NO – 42408014

MBA

SVIET
BANUR CHANDIGARH
 ACKNOWLEDGEMENT

Any accomplishment requires the effort of many people and this work is not different. I wish
to express my gratitude to those who may have contributed to this work, even though
anonymously.

I extend my sincere thanks to Mr. Dashmeet Singh for providing me this opportunity to
undergo summer training in HDFC BANK, Sector:- 8-C, CHANDIGARH. I have been
fortunate enough to get all the support, encouragement and guidance from him needed to
explore, think new and initiate.

I express my great thanks to Respected Mrs. Anju Tiwari, (project guide) under whose
guidance I was able to complete my project successfully. Her valuable advice and guidance
at various stages of the project will always be cherished.

Also, I am grateful to the authorities and employees of HDFC BANK, who by giving their
responses provided the base of my research.
My final thanks go to my parents, family members, teachers who encouraged me countless
times to persevere through this entire process.
 DECLARATION

I here by declare that the Summer Training Report, which is entitled “STUDY ON
CUSTOMER INVESTMENT BEHAVIOR ON THE BASIS OF AGE AND
OCCUPATION”, is compiled and submitted by me is my original frame work. However, my
Project Guide Respected Mrs. ANUJA SHARMA helped me at various points while
preparing this report.

MENAKSHI BEHRA
 EXECUTIVE SUMMARY

Studying books and merely passing exams is not worth, the education, knowledge and
experience is incomplete without being exposed to what is happening in real.

In order to make students competent enough to face real world, there is a requirement of
course for undergoing training for six to eight weeks with some reputed organization. This
exposure to real life situation gives an insight to the students the kind of pressure and
problems they can expect to face during their career.

For the requirement of undergoing training I sent my request for training to HDFC BANK
and fortunately it was accepted. I was assigned the project “a study of investment behavior of
people in respect to demographic features i.e. Age and Occupation.
There are lot many investment avenues are available these days to invest money like
Insurance, Bank Deposits, Equity Market etc. The report studies the various investment
avenues preferred by people and the various factors like Age and Occupation that influence
the investment behavior of people.

Chapter 1 gives the introduction to investment. It provides information about the various
investment options available to the investor like mutual funds, bonds, shares, real estate,
bank deposits etc. Next chapter describes the industry profile stating about investment
management, investment banking & major players. Then comes the turn of company profile
where the History, Mission & the Products offered by HDFC Bank are discussed. Some of
the products offered are saving account, current account, fixed deposit, anywhere banking,
online broking, insurance, lockers etc.

Series of steps were undertaken in order to study the investment behavior of people.
Descriptive research design & Non probability convenient sampling technique is used. The
report contains both primary data collected through personal interview of the respondents as
well as secondary data. Sample profile signifies the type of respondents chosen & here
respondents of different age group, profession, etc are taken so that the data could be made
conclusive. The sample size taken is 50.

Time & cost play a important role during the study & it becomes a constraint when study is
conducted at academic level leading to the selection of a small sample size within limited
area. The questionnaire can have some undetectable errors & the responses given by
respondents may be biased & may not be very accurate because of their non serous
responses.
I have done my best to make it a genuine study. But there are some chances of mistakes. A
critical appraisal by anyone will be heartily welcomed.

TABLE OF CONTENTS

ACKNOWLEDGEMENT…………………………………………..

EXECUTIVE SUMMARY………………………………………….

CHAPTER 1: Introduction

Various Investment Avenues covered

CHAPTER 2: Industry Profile

CHAPTER 3: Company Profile

Products and services provided by HDFC Bank

CHAPTER 4: Research Methodology

• Focus of Study

• Objectives of study

• Limitations of study

CHAPTER 5: Observations and analysis

CHAPTER 6: Conclusion
 • Suggestions

BIBLIOGRAPHY…………………………………………

ANNEXURES…………………………………………

INTRODUCTIONAn investment is a commitment of

funds made in the expectation of some positive rate of

return. If the investment is properly undertaken, the return

will be commensurate with the risk the investor assumes.

Features of an Investment Programme

 Safety of Principal
  Liquidity
 Income Stability
 Appreciation and Purchasing Power Stability
 Legality and Freedom from Care
 Tangibility
 Tax Benefits

Types of Investors
There are also three types of investors: conservative, moderate, and aggressive. The different
types of investments also cater to the two levels of risk tolerance: high risk and low risk.

Conservative investors often invest in cash. This means that they put their money in interest
bearing savings accounts, money market accounts, mutual funds, US Treasury bills, and
Certificates of Deposit. These are very safe investments that grow over a long period of time.
These are also low risk investments.

Moderate investors often invest in cash and bonds, and may dabble in the stock market.
Moderate investing may be low or moderate risks. Moderate investors often also invest in
real estate, providing that it is low risk real estate.

Aggressive investor is an investor who is willing to accept a higher degree of investment risk
in exchange for a chance to earn a higher rate of return. Investment risk is the volatility of
investment returns. A basic investing principle states that a higher degree of investment risk
is required to earn a potential higher rate of return.

VARIOUS INVESTMENT AVENUES:

MUTUAL FUNDS

A Mutual fund is an organization that invests in a diversified portfolio of financial securities

on behalf of a pool of subscribers to its schemes. These securities can be in the form of
equity, debt instruments, money market instruments etc., or a mix of these securities,
depending on the scheme objectives. A mutual fund pools the money of people with similar
investment goals. The money in turn is invested in various securities depending on the
objectives of the mutual fund scheme, and the profits (loss) are shared among the investors in
proportion to their investments.

A mutual fund scheme issues units that are normally priced at Rs.10 during offer. Thus , the
number of units you own against the total number of units issued by the mutual fund scheme
determines your share in the profit or loss of a scheme.

In the case of open end schemes, units can be purchased from or sold back to the fund at a
net asset value (NAV) based price on all business days. The NAV is the actual value of a unit
of the fund on a given day. Thus, when you invest in a mutual fund scheme, you normally get
an account statement mentioning the number of units that have been allotted to you and the
NAV based price at which the units have been allotted. When you buy more units or redeem
your units in part or full, you get an updated account statement, reflecting your transaction.

TYPES OF MUTUAL FUNDS

Types of mutual funds

On the basis of objective On the basis of structure

Mutual funds can be classified based on their objectives and their structure:-

I-On the basis of Objective-

• Growth Funds: The aim of growth funds is to provide capital appreciation over the
medium to long- term. Such schemes normally invest a majority of their corpus in
equities. It has been proven that returns from stocks, have outperformed most other
kind of investments held over the long term. Growth schemes are ideal for investors
having a long-term outlook seeking growth over a period of time.
• Income Funds: The aim of income funds is to provide regular and steady income to
investors. Such schemes generally invest in fixed income securities such as bonds,
corporate debentures and Government securities. Income funds are ideal for capital
stability and regular income.
• Balanced Funds: The aim of balanced funds is to provide both growth and regular
income. Such schemes periodically distribute a part of their earning and invest both
in equities and fixed income securities in the proportion indicated in their offer
documents. In a rising stock market , the NAV of these schemes may not normally
keep pace, or fall equally when the market falls. These are ideal for investors looking
for a combination of income and moderate growth.
• Money Market Funds: The aim of money market funds is to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in safer
short- term instruments such as treasury bills, certificates of deposit, commercial
paper etc. Returns on these schemes may fluctuate depending upon the interest rates
prevailing in the market . These are ideal for corporate and individual investors as a
means to park their surplus funds for short periods.
 • Load Funds: A load Fund is one that charges a commission for entry or exit. That is ,
each time you buy or sell units in the fund , a commission is payable. Typically entry
and exit loads range from 1% to 2%.
• No – load Funds: A No- load Fund is one that does not charge a commission for
entry or exit. That is , no commission is payable on purchase or sale of units in the
fund .

II- On the basis of Structure-

• Open-ended Funds: An open- end fund is one that is available for subscription all
through the year. These do not have a fixed maturity . Investors can conveniently buy
and sell units at Net Asset Value (NAV) related prices. The key feature of open-end
schemes is liquidity.
• Close – ended Funds: A close- end fund has a stipulated maturity period which
generally ranges from 3- 15 years. The fund is open for subscription only during a
specified period. Investors can invest in the scheme at the time of the initial public
issue and thereafter they can buy or sell the units of the scheme on the stock
exchanges where they are listed . In order to provide an exit route to the investors,
some close- ended funds give an option of selling back the units to the mutual Fund
through periodic repurchase at NAV related prices.
• Interval Funds: Interval funds combine the features of open-ended and close- ended
schemes . They are open for sale or redemption during pre-determined intervals at
NAV related prices.

ADVANTAGES OF INVESTING IN MUTUAL FUNDS

• Diversification : Mutual Funds invest their corpus in diversified portfolio’s which

reduces the risk contained in the investment. This also means that you can invest a
small sum of Rs.5000/- and still be a part of a portfolio where the market value of
single scrip might be much more than the total investment.
 • Liquidity: These funds are extremely liquid, some of them even have features like
across-the-counter redemption. This feature is especially useful at times when the
market is rising or falling.
• Professionally Managed: These funds are managed by professionals who have the
required expertise in buying and selling stocks. As a result they make better decisions
on entering and exiting a particular stock, which is very crucial for the overall
performance of a portfolio. Moreover, mutual fund investment also rids the investor
of maintaining records, eliminates hassles with the broker for payment, delivery and
other arduous back office tasks.
• Savings on transaction costs: As purchases and sales are done in bigger quantities,
the funds also get the advantages of lesser brokerage and other reduced transaction
costs.
• Tax Advantages: In India these funds become even more attractive because of the
tax advantages, like indexation benefits , long term capital gains tax , tax free
dividends and much more. SHORTCOMINGS OF MUTUAL FUNDS

While the benefits of investing through mutual funds far out weigh the disadvantages, an
investor and his advice will do be aware of a few shortcomings of using the mutual funds as
investment vehicles.

1) No Control Over Costs

2) No Tailor-made Portfolio
3) Managing a portfolio of funds.
 SHARES

Shares are the certificates representing ownership in a corporation. Shares are also known as
stocks or equities. It is a type of security that signifies ownership in a corporation and
represents a claim on part of the corporation’s assets and earnings. Shares are the most
universal form of raising long-term funds from the market. Every company, except a
company limited by guarantee, has a statutory right to issue shares. The capital of a company
is divided into a number of equal parts known as shares.

Section 2 (46) of the companies Act , 1956 defines it as “a share in the share capital of a
company , and includes stock except where a distinction between stock and shares is
expressed or implied.”

A holder of stock has a claim on a part of the corporation’s assets and earnings. In other
words, a shareholder is an owner of a company. Ownership is determined by the number of
shares a person owns relative to the number of outstanding shares. For example, if a
company has 1000 shares of stock outstanding, and one person owns 100 shares, that person
would own and have claim to 10 %of the company’s assets.

Companies issue different types of shares to mob up funds from investors. The Companies
Act , 1956 has limited the type of shares to only two – Preference shares and Equity shares.
Different types of shares are issued to suit the requirements of investors.

KINDS OF SHARES

1. Equity Shares – Equity shares, also known as ordinary shares or common shares
represent the owners of the company. The holders of these shares are the real owners
of the company. They have a control over the working of the company. Equity
shareholders are given dividend after paying it to the preference shareholder. The rate
of dividend on these shares depends upon the profits of the company. These
 shareholders take higher risk as compared to preference shareholder. Equity capital is
paid after meeting all claims including that of preference shareholders. They take risk
both regarding dividend and rate of capital. Equity share capital cannot be redeemed
during the lifetime of the company.
2. Preference Shares – These shares have certain preferences as compared to other
types of shares. These shares are given two preferences. There is preference of or
payment of dividend. The second preference for these shares is the repayment of
capital at the time of liquidation of the company. A fixed rate of dividend is given on
preference share capital. Preference shareholders do not have voting rights; so they
have no say in the management of the company.
3. Deferred Shares – These shares are earlier issued to the promoters or founders for
services rendered to the company. These shares were known as Founders shares
because they were normally issued to the founders of the company. These shares are
generally of a small denomination and the management of the company remained in
their hands by virtue of their voting rights.
4. No Par Stock/ Shares- No par stock means having no face value. The capital of a
company issuing such shares is divided into a number of specified shares without
mentioning any face value. The value of a share can be determined by dividing the
real net worth of the company with the total number of shares of the company.
Dividend on such shares is paid per share and not as a percentage of fixed nominal
value of shares.

Five reasons for investing in shares:-

1. Capital Growth– Over the longer term, shares can produce significant capital gains
through increases in share prices. Some companies also issue free or bonus shares to
their shareholders as another way of passing on company profits or increase in their
net worth. Many listed companies also make what are called “rights issues”, that give
their existing shareholders the opportunities to buy more shares in the company at a
discounted rate and without the need to buy through brokers, thereby saving on
 brokerage fees. Companies do this as a way of raising more capital for expansion, and
it provides you with an opportunity to increase your holding to increase your holding
in the company at a discounted price if you are confident of its potential. Even if you
decide not to take up their offer, you can sell the right o buy the discounted shares to
someone else.

2. Dividends – Companies pay much of their post-tax profits to their shareholders in the
form of dividends. Since dividend imputation was introduced, the attractiveness of
dividends issued by Australian companies earning their profits within Australia has
increased. Some companies have dividend reinvestment plans, where they issue
additional shares to their shareholders (often at a slight discount and without
brokerage fees), rather than paying out dividends in cash.
3. Ease of buying and selling- Compared to other investments like property, shares are
very portable. They can be bought and sold quickly, and the brokerage on the
transactions is lower than for a property transaction. Unlike selling a property, you
can sell part of your share parcels.
4. Diversifying your investments- In order to diversify your investments portfolio, you
will probably have part of your money in the share market. You may buy shares
directly or through managed funds or your superannuation.
5. Getting shareholder discounts or entitlements- Some listed companies, usually
retail, hospitality/entertainment or financial services, offer generous discounts to
shareholders when they buy goods or services from the companies or their
subsidiaries. Usually, you must hold minimum-qualifying parcel eg, 500 shares.
 BONDS

Bonds are generally less talked about than stocks and shares, yet they can provide high levels
of cash growth, as well as offering more security than shares. Over the long term they
generally do not yield as much money as shares do, but they also do not suffer from the large
swings in the market, and so offer a safer, more reliable investment.

Bonds a way of lending money to a private or public corporation, in return for a set rate
of interest on that loan. Whether it is a government, or a corporation, the essential idea is that
you purchase ‘bonds’ off of the issuer, which promises to return your money on a specific
date, and in the mean time pay you a set level of interest. There are different types of bonds
that are issued , and they are usually rated on a sliding scale from AAA downwards. AAA
bonds are issued by very financially secure institutes such as big chip companies, or
governments. They have a very low chance of defaulting on the loan (you losing your
money), but correspondingly they pay low levels of interest .At the other end of the scale
there are ‘junk’ bonds, that pay very high levels of interest, but are issued by much higher
risk companies, such as small businesses, start ups, or even medium to large companies that
are reorganizing their finances.

Obviously these types of companies have a much larger risk of going bankrupt, and
hence there is larger risk of losing money when investing in them.

TYPES OF BONDS

1. Simple, Naked Bonds :- These are not given any security on assets. They have no
priority as compared to other creditors.
2. Secured Bonds :- These are given security on assets of company.
 3. Bearer Bonds :- These are easily transferable. They are just like negotiable
instruments. They are handed over to the purchaser without any registration deed.
Anyone purchasing them with a good faith becomes the lawful owner of these bonds.
4. Registered Bonds : - As compared to bearer bonds which are transferable, registered
bonds require a procedure to be followed for their transfer. Both the transfer and the
transferee are expected to sign a transfer voucher.
5. Redeemable Bonds :- These bonds are to be redeemed on the expiry of a certain
period. The interest on bonds is paid periodically but the principal amount is returned
after a fixed period.
6. Irredeemable Bonds :- Such bonds are not redeemable during the life time of the
company. They are payable at the winding up of the company.
7. Convertible Bonds :-Sometimes convertible bonds are issued by the company and
the holders are given an option to exchange the bonds into equity shares after the
lapse of a specific period.
8. Zero Interest Bonds :- It is a usually convertible bonds which yield no interest. The
company does not pay any interest on such bonds. But the investor in Zero Interest
Bond is compensated for the loss of the interest through conversion of such bonds
into equity shares at a specific future date.
9. Guaranteed Bonds :- These are bonds on which the payment of interest and
principal is guaranteed by third parties, generally, banks and government etc.

ADVANTAGES OF BONDS

Bonds offer a number of advantages to both the company as well as investors.

ADVANTAGES TO A COMPANY

1. Bonds provide long- term funds to a company.

2. Rate of interest payable on bonds is usually lower than the rate of dividend paid on
shares.
 3. Many companies prefer issue of debentures because of the fixed rate of interest
attached to them.
4. A company can trade on equity by mixing debentures in its capital structure and
thereby increase its earnings per share.

ADVANTAGES TO INVESTORS

a) The interest of bonds is protected by various provisions of the bonds trust deed and
the guidelines issued by the SEBI.
b) Many investors prefer debentures because of a definite maturity period.
c) It is a comparatively a safer investment because debenture/bond holders have either a
specific or a floating charge on all the assets of the company.
d) Debentures provide a fixed, regular and stable source of income to its investors.

INSURANCE
In India, the concept of insurance was never given a serious thought, as compared to other
countries. People still are under insured. The reason being lack of awareness and
opportunities combined with poor state of services provided.

Insurance is a method of spreading and transfer of risk. Here losses of unfortunate few are
shared by and spread over to many exposed to the same risk. Assets created by the owner in
expectations of future needs / benefits have a value. Loss of the asset for any reason deprives
the owner of the expected benefit. Insurance in this context is a mechanism that helps to
reduce the adverse consequences due to loss of assets.

Insurance is a contract between the insurer (the insurance company) and the insured (the
person or the entity seeking the cover) where in against receipt of certain amount, called
premium, the insurer agrees to make good any financial loss that may be suffered by the
insured, due to the operation of an insured peril on the subject matter of insurance

Functional definition of insurance has following features

• It is a co-operative device
• It spreads the risk over a large number of persons who are insured against the risk,
• It provides security to the insured.

KINDS OF INSURANCE

Insurance can be mainly classified into two categories.

• LIFE INSURANCE – According to sec 2 (ii) of Insurance Act 1938 , “ Life

insurance is the business of effecting contracts of insurance upon human life
including any contract, whereby the payment of money is assured on death except
death by accident on the happening of any contingency dependent on human life and
any contract which is subject to the payment of premium for a term dependent on
human life and any contract which is subject to the payment of premium for a term
dependent on human life. At present the life insurance enjoys maximum scope
 because life is the most important property of the society or an individual. Each and
every person requires insurance up to a specific level. The insurance is not only the
protection but is an investment because a certain sum is returnable to the insured at
the death or at the expiry of the period. It includes-

• Term Life Insurance – Under a term life contract, the insurance company pays a
specific lump sum to the designated beneficiary in case of death of the insured. These
policies are usually for 5,10,15,20 years etc. The premium payable on these policies
is low as they do not carry any cash value. If one survives the period of policy, he or
she do not get any money at the end of the policy. The premium on such policies
keeps on increasing with age mainly because the risk of death of older people is
more. Over the age of 60, these policies become difficult to afford.

• Permanent Life Insurance –Under permanent Life insurance, a portion of the

money paid as premium is invested in a fund that earns interest on a tax- deferred
basis. Thus, over a period of time, this policy will accumulate certain “ cash value”
which you will be able to get back either during the period of the policy or at the end
of the policy . This type of policy not only provides protection for your dependents by
paying a death benefit to your designated beneficiary upon your death, but it also
allows you to use some part of the money while you are alive or at the end of the
policy. Some examples are – whole life, universal Life etc.

ENDOWMENT POLICIES – These policies provide for payment of premiums and a lump
sum amount either in the event of death of the insured or on the date of expiry of the policy,
which ever occurs earlier.

MONEY BACK POLICIES

These policies provide for periodic payments of partial survival benefits during the term of
the policy itself. A unique feature of these policies is that in the event of the death of the
insured during the policy term, the designated beneficiary will get the full sum assured
without deducting any survival benefits amount, which have already been paid as money-
back components.

PENSION POLICIES

These policies require the insured to pay the premium as a single lump sum or through
installments paid over a certain number of years. The insured in return will receive back a
specific sum periodically from a specified date onwards ( the returns can be monthly, half-
yearly , or annually) , either for life or for a fixed number of years . In case of the death of
insured , or after the fixed annuity period expires for annuity payments, the invested annuity
fund is refunded, usually with some additional amounts as per the terms of policy.

Some of the major private players in the sector are:

In Life insurance Sector:

• Bajaj Allianz Life Insurance Corporation

• Birla Sun Life Insurance Co. Ltd. (BSLI)
• HDFC Standard Life Insurance Co. Ltd. (HDFC STD LIFE)
• ICICI Prudential Life Insurance Co. Ltd. (ICICI PRU)
• ING Vysya Life Insurance Co. Pvt. Ltd. (ING VYSYA)
• Max New York Life Insurance Co. Ltd. (MNYL)
• MetLife India Insurance Co. Pvt. Ltd. (METLIFE)
• Kotak Mahindra Old Mutual Life Insurance Co. Ltd. SBI Life Insurance Co. Ltd.
(SBI LIFE)
• TATA AIG Life Insurance Co. Ltd. (TATA AIG)
• Aviva Life Insurance Co. Pvt. Ltd. (AVIVA)
• Sahara India Life Insurance Co. Ltd. (SAHARA LIFE)
GENERAL INSURANCE – General Insurance includes property insurance, liability
insurance and other forms of insurance. Fire and marine insurance are strictly called property
insurance. Motor, theft, fidelity and machine insurances include the extent of liability
insurance is fidelity insurance, where by the insurer compensates the loss to the insured when
he is under the liability of payment to the third party. The common type of general insurance
are:-

1. Property Insurance: This policy is designed to cover the various risks under a single
policy. It provides protection for property and interest of the insured and family.

2. Health Insurance: It provides cover, which takes care of medical expenses following
hospitalization from sudden illness or accident.

3. Personal Accident Insurance: This insurance policy provides compensation for loss of
life or injury caused by accident. This includes reimbursement of cost of treatment and the
use of hospital facilities for the treatment.

4. Travel Insurance: This policy covers the insured against various eventualities while
traveling abroad. It covers the insured against personal accident, medical expenses,
passport etc.

5. Motor Insurance: Motor vehicles act states that every motor vehicle plying on the
road has to be insured with at least liability only policy. There are two types of
policies – one covering the act of liability, while the other covers the insurers all
liability and damage caused to one’s vehicles.

In General Insurance sector:

• Bajaj Allianz General Insurance Co. Ltd. (BAJAJ ALLIANZ)

• ICICI Lombard General Insurance Co. Ltd. (ICICI LOMBARD)
 • IFFCO Tokyo General Insurance Co. Ltd. (IFFCO TOKIO)
• Reliance General Insurance Co. Ltd. (RELIANCE)
• Royal Sundaram Alliance Insurance Co. Ltd.
• TATA AIG General Insurance Co. Ltd. (TATA AIG)
• HDFC Chubb General Insurance Co. Ltd. (HDFC CHUBB)

SOCIAL INSURANCE:

The insurance is to provide protection to the weaker section of the society who is unable to
pay the premium for adequate insurance. Pension Plans, disability benefits, unemployment
benefits and industrial insurance are various forms of social insurance. With the increase of
socialization ideas, the social insurance is obligatory duty of the nation. The government of
the country must provide social insurance to its means.

Since a single policy cannot meet all the insurance objectives, one should have a portfolio of
policies covering all the needs.
 BANK DEPOSIT SCHEMES

One of the important functions of the banks is to accept deposit from the public for the
purpose of lending. The depositors continue to be the heart of the Banking system.

The depositors and their interest form the key area of the regulatory framework for Banking
in India and this has been enshrined in the Banking Regulation Act 1949. In the liberalized
environment banks have been vested with powers to formulate Deposit products within the
broad guidelines issued by RBI.

The deposit Products offered by the bank are broadly categorized in the following types.

• Savings Bank Account

• Current Account
• Term Deposits

Savings Bank Account:-

Savings Bank Account as the very name suggests is intended for savings for the future.There
are no restrictions on the number and amount of deposit that can be made on any day.
Balance in the account earns interest at rates advised by the Head Office from time to time.
These accounts can be opened by eligible persons and also certain organizations and
agencies (as approved by the RBI).

As required by Law, while opening the account, bank satisfy about the identity, including
verification of address of a person/s seeking to open an account, to assist in protecting the
prospective customers, members of the public and ourselves against fraud and other misuse
of the Banking system duly observing the know your customer(KYC) guidelines of RBI.

Current Account:

Current Accounts are designed to meet the needs of such sections of the public who operate
their account regularly and frequently.i.e. Traders, Businessmen, Corporate bodies or the like
who receive money and make payments very often. Current accounts are suitable to such
category of customers as there is no restriction on the number of withdrawal or deposit.
These accounts can be opened by individuals, partnership firms, Private & Public Co, HUFs,
Societies, Trusts, etc.

As required by Law, while opening the account, bank satisfy about the identity, including
verification of address of a person/s seeking to open an account, to assist in protecting the
prospective customers, members of the public and ourselves against fraud and other misuse
of the Banking system duly observing the know your customer(KYC) guidelines of RBI.

Term/Fixed Deposit Account:

The deposits received by the bank for a fixed period withdraw able after expiry of the fixed
period and includes deposits such as Recurring / Fixed. Bank has tailored various term
deposit schemes to suit the needs expectation of the investing people in every walk of life.
Term Deposits can be opened by individuals, partnership firms, HUF’s, societies etc.
 REAL ESTATE

Investing in Real Estate means more than just “buying right” or “selling right”. It also means
managing the property right. In real estate one must answer questions such as : What rents
should be charged? How much should be spent on maintenance and repairs? What purchase,
lease, or sales contract provisions should be used?

Along with market forces, it is the answers to such questions that determine whether or not
investor will earn the desired return on a real estate investment. Like other investments
markets, the real estate market changes over time. It also differs from region to region.

FEATURES

• Physical Property-When buying real estate, make sure to get both the quantity and
quality of property. Problems can arise if the investor fails to obtain a site survey, an
accurate square – footage measurement of the buildings or an aspiration for building
or site defects. When signing a contract to buy a property, make sure it accurately
identifies the real estate and lists all items of personal property that investor expects
to receive.
• Property Rights – Strange as it may seem, when buying real estate when the investor
buys a bundle of legal rights that fall under concepts in,law such as deeds, titles, liens
etc. When investing in real estate, make sure that along with various physical
inspections, to get a legal inspection from a qualified attorney.
• Time Horizon – Like a roller coaster, real estate prices go up and down. Sometimes,
market forces pull them up slowly but surely; in other periods prices can fall so fast
they take an investor’s breath away. The investor must decide what time period is
relevant. The short-term investor might count on a quick drop in mortgage interest
rates and buoyant market expectations, whereas the long term investor might look
more closely at population – growth potential.
• Geographical Area – Real estate is a spatial commodity, which means that its value
is directly linked to what is going on around it. With some properties, the area of
greatest concern consists of a few square blocks; in other instances an area of
hundreds or even thousands of miles serves as the relevant market area. So the
investor must declineate boundaries before he can productively analyze real estate
demand and supply.
INDUSTRY PROFILE
Overseas investors are looking at India as an attractive investment destination owing to the
prospects of high returns. A number of Corporate and Multi National Companies from all
over the world have established business in India and have expanded over the years.

India has witnessed a number of success stories - both Indian and multinational firms have
registered higher profits, increased turnover and higher sales over the years. This has induced
them to reinvest profits and inject fresh capital into their processes in order to reap the
benefits of the India growth story.

The banking sector is the most dominant sector of the financial system in India. Significant
progress has been made with respect to the banking sector in the post liberalization period.
The financial health of the commercial banks has improved manifolds with respect to capital
adequacy, profitability, asset quality and risk management. Further, deregulation has opened
new opportunities for banks to increase revenue by diversifying into investment banking,
insurance, credit cards, depository services, mortgage, securitization, etc. Liberalization has
created a more competitive environment in the banking sector. The competition has increased
within the banking sector (with the emergence of new private banks and foreign banks) as
well as from other segments of the financial sector such as mutual funds, Non Banking
Finance Companies, post offices and capital markets.

Investment banking is one of the most global industries and is hence continuously
challenged to respond to new developments and innovation in the global financial markets.
Throughout the history of investment banking, many have theorized that all investment
banking products and services would be commoditized. New products with higher margins
are constantly invented and manufactured by bankers in hopes of winning over clients and
developing trading know-how in new markets.

Diversifying into investment banking, insurance, credit cards, depository services, mortgage
financing, securitization has increased revenues. As large number of players in various fields
enters the market, competition would be intensified by mutual funds, Non Banking Finance
Corporations (NBFCs), post offices, etc. from both domestic and foreign players. All this
would lead to increased sophistication and technology in the sector.

Some of the major players in this sector are:

HDFC, ICICI, HSBC, State Bank of India, Punjab National Bank, Ing Vysya, ABN
Amro Bank, City Bank, etc.

Investment banks act as intermediaries in trading for clients. Investment banks differ from
commercial banks, which take deposits and make commercial and retail loans.

Investment banks help companies and governments and their agencies to raise money by
issuing and selling securities in the primary market. They assist public and private
corporations in raising funds in the capital markets (both equity and debt), as well as in
providing strategic advisory services for mergers, acquisitions and other types of financial
transactions.

Investment management is the professional management of various securities (shares, bonds

etc) and other assets (e.g. real estate), to meet specified investment goals for the benefit of
the investors. Investors may be institutions (insurance companies, pension funds,
corporations etc.) or private investors (both directly via investment contracts and more
commonly via collective investment schemes eg. mutual funds) .

COMPANY PROFILE
 HDFC Bank

HISTORY

HDFC Bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’, with its
registered office in Mumbai, India. The Bank commenced operations as a Scheduled
Commercial Bank in January 1995.

The Housing Development Finance Corporation Limited (HDFC) was amongst the first
to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a
bank in the private sector, as part of the RBI’s liberalization of the Indian Banking
Industry in 1994.

Headquartered in Mumbai, HDFC Bank, has a network of over 531 branches spread over
228 cities across India. All branches are linked on an online real-time basis. Customers in
over 120 locations are serviced through Telephone Banking. The Bank also has a network
of about over 1054 networked ATMs across these cities. HDFC Bank’s ATM network
can be accessed by all domestic and international Visa / Master Card, Visa Electron /
Maestro, Plus / Cirrus and American Express Credit / Charge cardholders.

HDFC Bank has won many awards for its excellent service. Major among them are “Best
Bank in India” by Hong Kong-based Finance Asia magazine in 2005 and “Company of
the Year” Award for Corporate Excellence 2004-05.

HDFC Bank began operations in 1995 with a simple mission: to be a “World-class Indian

Bank”. They realized that only a single-minded focus on product quality and service
excellence would help them get there.

It is extremely gratifying that their efforts towards providing customer convenience have
been appreciated both nationally and internationally.

Their business philosophy is based on four core values

 Customer Focus
 Operational
 Excellence
 Product Leadership
 People.

They believe that the ultimate identity and success of their bank will reside in the exceptional
quality of their people and their extraordinary efforts. For this reason, they are committed to
hiring, developing, motivating and retaining the best people in the industry.

Mission and Business Strategy:

Their mission is to be "a World Class Indian Bank", benchmarking themselves against
International standards and best practices in terms of product offerings, technology,
service levels, risk management and audit & compliance. The objective is to build sound
customer franchises across distinct businesses so as to be a preferred provider of banking
services for target retail and wholesale customer segments, and to achieve a healthy
growth in profitability, consistent with the Bank's risk appetite. They are committed to do
this while ensuring the highest levels of ethical standards, professional integrity,
corporate governance and regulatory compliance.

Their business strategy emphasizes the following:

 Increase their market share in India’s expanding banking and financial services
industry by following a disciplined growth strategy focusing on quality and not on
quantity and delivering high quality customer service.
 Leverage their technology platform and open scalable systems to deliver more
products to more customers and to control operating costs.
 Maintain their current high standards for asset quality through disciplined credit
risk management.

 Develop innovative products and services that attract their targeted customers and
address inefficiencies in the Indian financial sector.
 Continue to develop products and services that reduce their cost of funds.
 Focus on high earnings growth with low volatility.

Recently HDFC Bank has announced a merger with HDFC.

RBI approves merger of CBOP, HDFC Bank

New Delhi, SEP 21, 2007

Reserve Bank of India has approved the merger of Centurion Bank of Punjab with HDFC
Bank and the amalgamation would be effective from SEP 2007.
"The RBI hereby sanctions the appended scheme of amalgamation of CBOP (transferor
bank) with the HDFC Bank ltd (transferee bank). The scheme shall come into effect from
May 23," HDFC Bank said in a filing to the Bombay Stock Exchange.

The boards of HDFC Bank and CBOP had given in-principle approval for the merger of both
the banks in February. Following the in-principle nod, HDFC Bank had approved the share
swap ratio of 1:29.

As per the ratio CBOP shareholder would get one share of HDFC Bank for every 29 shares
held.

With the merger, the combined entity will have a nationwide network of 1,148 branches and
the deposits would climb up to Rs 1,20,000 crore.

HDFC PRODUCTS

 Savings account
 Current account
 Fixed Deposit
 Loans
 Anywhere banking
 Online Broking
 Lockers
 Cards
  Wealth Management Services (Insurance)

SAVING ACCOUNT
A saving account is meant for the general public who wish to save a part of their current
incomes to savings. The bank, therefore impose certain restrictions on the saving
bank account and also offer a reasonable rate of interest. Opening a Saving
Account with HDFC BANK allow customers to earn interest while the money
lies parked for their convenience. In addition to this, the account comes with a
host of banking services including atm cards, internet banking, safe deposit
lockers, etc.

MINIMUM BALANCE
Individuals can open a Saving Account with Rs. 5000\- . In the eventuality of the average
minimum balance falling below the stipulated levels a charge of Rs. 750 is levied.

INTEREST RATE
Interest @ 3.50 % p.a. calculated on the minimum balance in your account between the 10 th
and the last day of the month, credited quarterly into your account.

CURRENT ACCOUNT
A current account is a running and active account, which may be operated upon any number
of times during a working day. There is no restriction on the number and the amount of
withdrawals from a current account. Current account suits the requirements of big
businessmen, joint stock companies, institutions, public authorities and public corporations,
etc whose banking transactions happen to be numerous on every working day. In order to
avail the current account facility you need to fill in the account form and provide
introduction. The account shall be introduced by another account holder of the bank or
supporting documents based on the constitution of the applicant.

Now, with an HDFC Bank Current Account, experience the freedom of multi-city banking!
You can have the power of multi-location access to your account from any of 761
branches in 327 cities. Not only that, you can do most of your banking transactions from
the comfort of your office or home without stepping out.
They make it their business to help you in your business by offering you a Current Account
with all the benefits you need to stay ahead of your competition.

At HDFC Bank, they understand that running a business requires time and money, also that
your business needs are constantly evolving. That's where they come in. They provide you
with a choice of Current Account options to exclusively suit your business - whatever the
size or scope.
MINIMUM BALANCE
Corporate houses can open a current account with Rs. 10000.
FIXED DEPOSIT ACCOUNT
Fixed deposit accounts include deposits with the bank for a fixed period, which is specified
at the time of making the deposit. A fixed deposit is repayable on the expiry of a specified
period chosen by the depositor to suit his purpose and to enable him to get back the money as
and when he needs it. These deposits constitute more than half of total bank deposits. In
order to avail the Fixed Deposit facility customer need to fill in the account form and provide
introduction documentation. The account could either be introduced by another account
holder of the bank\ staff member or through supporting documents based on the constitution
of the applicant.

MINIMUM DEPOSIT
The minimum deposit for opening HDFC Fixed deposit Account is Rs. 5000
This deposit can be made in the form of cash or through a cheque.
(The rates of interest are subject to change from time to time)

LOANS
Lending of funds to constituents, mainly traders, business and industrial enterprises,
constitutes the main business of the banking company. The main portion of the
bank’s funds is employed by way of loans and advances, which is most profitable
employment of its funds. The major part of banks income is earned from interest
and discount on the funds so lent.
It is one of the primary functions without which an institution cannot be called bank. The
bank lends a certain percentage of the cash lying in the deposit on a higher rate than it pays
on such deposits. Before advancing the loans the bank satisfy themselves about the credit
worthiness of the borrowers.

Different types of loans are discussed below:-

EDUCATION LOAN
Education loan is basically a loan, which is provided to student for higher education. In this ,
customer has to pay only simple interest during their education and six month of completion
of education EMI (Installment)of the loan starts.
ELIGIBILITY
a) INDIAN
b) Age above 18 years
c) Have secured admission in a college \ university
PERSONAL LOANS
HDFC BANK offers a broad range of personal loans to meet customer’s specific needs and
situations. Personal loan can be given to both service class and business class. HDFC
personal loans are hassle free, quickly approved and are on very attractive interest rates.
Advantage of repaying in convenient Equated Monthly Installments is also being given.
FEATURES
a) Competitive Rate of Interest
b) Lowest Processing fee (1% of loan amount)
c) No prepayment penalty
d) No personal guarantee
e) No hidden costs
f) Longer repayment period
g) Special offer for HDFC customers
HOME LOANS
Home loan is basically an appreciable investment. Customers can get loan for construction,
land purchase, for renovation at lowest installment and with minimum rate of interest.
FEATURES:
 Competitive rate of interest
 Special pre-approved loans for existing customers
 Loans available to Individuals, Firms, Private Limited Companies
 Also available for NRIs and Merchant Navy personnel
 No-income proof scheme available
 Loan available for new as well as resale properties.

AUTO LOANS
If you are a salaried individual holding credit cards , your loan gets processed faster.
Requirements:

 Facility is available to only HDFC bank account holders (CASA).

 All terms and conditions applicable for the used car product are applicable for the
Loan take over product.
 Minimum 9 month old loan with any approved Financier with clear repayment track
record

ANYWHERE BANKING
The new concept of anywhere banking allows customer of one branch of a bank to transit
their business at premises of another branch of the bank. This essentially means that the
customers are treated as being the customer of a bank not of a branch.
HDFC has been able to offer “Anywhere Banking” and at par cheque facilities for its
customers. Using this technology and networked infrastructure the bank is now in a position
to introduce products like electronic utility bills collection (Telephone, electricity bills etc.)
as well as innovative products like acceptance of insurance premium over the internet.

What can you do using Net Banking?

HDFC leading service provides a host of features at your finger-tips:

 View Account Balances & Statements

 Transfer Funds between accounts
 Create Fixed Deposits Online
 Request a Demand Draft
 Pay Bills
 Order a Cheque Book
 Request Stop Payment on a Cheque

And lots more

ONLINE BROKING

Demat Account:
HDFC BANK is one of the leading Depository Participant (DP) in the country with over 8
Lac demat accounts.
HDFC Bank Demat services offers you a secure and convenient way to keep track of your
securities and investments, over a period of time, without the hassle of handling physical
documents that get mutilated or lost in transit.
HDFC BANK is Depository participant both with -National Securities Depositories Limited
(NSDL) and Central Depository Services Limited (CDSL).
Features & Benefits:
Demat form have the following benefits:

 Settlement of Securities traded on the exchanges as well as off market transactions.

 Shorter settlements thereby enhancing liquidity.

 Pledging of Securities.

 Electronic credit in public issue.

 Auto credit of Rights / Bonus / Public Issues / Dividend credit through ECS.

 Auto Credit of Public Issue refunds to the bank account.

 No stamp duties on transfer of securities held in demat form.

 No concept of Market Lots.

 Change of address, Signature, Dividend Mandate, registration of power of attorney,

transmission etc. can be effected across companies held in demat form by a single
instruction to the Depository Participant (DP).
 Holding / Transaction details through Internet / email.

Secured & Easy Transaction Processing:

HDFC Bank Ltd provides convenient facility called 'SPEED-e' (Internet based transaction)
whereby account holder can submit delivery instructions electronically through SPEED-e
website (https://speed-e.nsdl.com). SPEED-e offers secured means of transaction processing
eliminating preparation of instruction slips and submission of the same across the counter to
the depository participant. The 'IDEAS' facility helps in viewing the current transactions and
balances (holdings) of Demat account on Internet on real time basis.
 LOCKERS

Safe Deposit Locker:

A Safe Deposit Locker with HDFC Bank is the solution to your concern. Located at select
branches in cities all over the country, their lockers ensure the safe keeping of your
valuables.

Advantages / Key Benefits

 Wide Availability.
 Lockers available in various sizes. i.e. Small, Medium, Large and Extra Large with
varying rents.
 Lockers are rented out for a minimum period of one year. Rent is payable in advance.
 No deposits are required to avail a locker. Just open an account and get the locker facility
OR
 The rent may be conveniently paid from your deposit account with us.
 Direct debits for locker rentals from your account rid you of the hassles in writing out
cheques.
 There is a nominal annual charge, which depends on the size of the locker and the centre
in which the branch is located.

Eligibility
An individual (not minor), firms, limited company, associations, clubs, trusts, societies, etc
may hire a locker.
Terms & Conditions
 For obtaining a Locker at HDFC Bank you must be an account holder with our Bank.

 Lockers can be allotted individually as well as jointly.

 The Locker holder is permitted to add or delete names from the list of persons who

can operate the Locker and can have access to it.

 Loss of Key is to be immediately informed to the concerned Branch.

 For Schedule of Rentals, please contact the branch nearest to you.

CARDS

Their range of Cards helps you meet your financial objectives. So whether you are
looking to add to your buying power, conducting cashless shopping, or budgeting
your expenditure, you will find a card that suits you.

Credit Cards
Besides arming you with unmatched spending power, our Credit Cards are designed to meet
your unique needs. Choose one that's tailored for you. The best credit cards are available
here, including even the online credit cards service Net safe.

Classic Cards
Special Benefit Cards: Silver, Value Plus, Health Plus credit card.
Premium Cards
Commercial Cards: Women’s Gold Card, Corporate, Titanium, Business, Gold,
l Platinum Plus, Visa Signature, World Master Card Credit Card.

Debit Cards

What if you could carry your bank account with you? HDFC Bank Debit Cards give you
complete and instant access to the money in your accounts without the risk or hassle of
carrying cash.
 WEALTH MANAGEMENT SERVICES

It includes complete financial planning advice, personalized services on insurance, bonds,

mutual funds & fixed deposits according to investment priorities of customer.

INSURANCE

HDFC Standard Life Insurance Company Ltd:

HDFC Standard Life Insurance Co. Ltd was incorporated on 14th august 2000. It is a joint
venture between Housing Development Finance Corporation Limited (HDFC Ltd.) India and
UK based Standard Life Company. Both the joint venture partners being one of the leaders in
their respective areas came together in this 81.4:18.6 joint venture to form HDFC Standard
Life Insurance Company Limited.

The MD and CEO of HDFC Standard Life Mr. Deepak, has given the company new
directions and has helped the company achieve the status it currently enjoys. HDFC Standard
Life brings to you a whole range of insurance solutions be it group or individual or NAV
services for corporations; they can be easily customized as per specific needs.

The premium payment options available to the customers vary from online payment to direct
desk payments at the HDFC Standard Life Branches, by courier services or in drop boxes
provided. You can also pay by ECS or Automatic Debit System or credit cards or standing
instruction mandate. HDFC Standard Life Insurance Company is a customer oriented
corporation and aim at complete customer satisfaction.
Life insurance is designed to offer financial protection for you and your family during the
times of uncertainties. Choose from a range of traditional insurance and unit linked plans
designed to help you with your savings, retirement, investment and protection needs.

GENERAL & HEALTH INSURANCE:

Home Insurance
You build your dream homes to house your loved ones. And then you nurture it with great
care. With our vast insurance plans secure your most valued possessions, your home, against
all risks...

Health Insurance
Now you can protect yourself from costly medical bills in case of any emergency. Our range
of health plans covers you and your family against expensive medical care...

Travel Insurance
While traveling alone, or with friends and families, for business or for pleasure - you are
exposed to many travel related risks. While on the move, far from home, our Travel
Companion will give you total protection from all risks...

Car / Motorbike Insurance

Your vehicle is exposed to lot of risks putting yourself, your family in trouble in case of
accident. Get benefit of speedy cashless claim settlement.

Shop / Office Insurance

Your office is a hive of activity. Major investment, time and effort goes into building up your
business. Our office package is the best way to protect your business from loss due to
unexpected contingencies...
FOCUS OF STUDY
The study focuses on the investors. Where do they invest their surplus money?

Now days there are large number of investment tools available for investing money for e.g.
Share market, Bank deposits, Mutual funds and bonds, Insurance sector, Real Estate etc.
Every individual has different reasons for investing his/her money. Some like to invest in
Share market because of high liquidity and high return, while exactly opposite to are those
persons who thinks that share market is the most risky tool to invest their money as in the
share market future plays a major role e.g. Price of one share may rise high today and may
fall tomorrow. The real measure of investment success is meeting one’s goal; investors will
be winner if they can ensure the right investment for themselves, their family and their
financial goal. The present study was undertaken to determine whether the preferences of
investors towards investment schemes is influenced by the factors like AGE and
OCCUPATION.

OBJECTIVES OF STUDY
Every study has certain objectives and the study is conducted to fulfill those objectives. The
objective of my project “Investment behavior of people are as follows-

• To study the preferences of individuals towards various investment schemes.

• To know actually what factors affect the investor while investing in various
investment schemes.

• To identify whether age group and occupation influences investment behavior of

people.
RESEARCH METHODOLOGY
Research methodology is a systematic way of conducting a project. It is a series of steps,
which are undertaken in order to reach at the final conclusion. The methodology adopted for
the study was as follows:

RESEARCH DESIGN
The research process was designed to determine the investment behavior of people . So
Descriptive research design was used in the study.

SAMPLING TECHNIQUE
The sampling technique used for the study was NON- PROBABILITY CONVENIENCE
sampling. All the respondents who were easily accessible and willing to part the information
were administered questionnaire to get desired information.

DATA COLLECTION
Both Primary data and secondary data have been used for the purpose of data collection.
Primary data has been collected by conducting PI of the respondents and administering a self
designed, unbiased, undisguised structured questionnaire.

SAMPLE PROFILE
Deciding where to survey requires that the whole universe of the market from which data is
sought to be defined so that appropriate sample can be selected. Sample profile signifies the
type of respondents chosen. Since, the present study was related to preference towards
various investment schemes.
So the sample taken here was all types of investors i.e – different age-groups, different
profession, etc. so that the data could be made conclusive and can be presented for whole of
the population and accuracy of the results can be obtained.
SAMPLE SIZE
The size of the sample depends upon the size of the budget and the degree of the confidence
that the markets want to place in the findings. A sample design not only seeks to determine
the size of the sample taken but also sampling unit. For my study all the individuals is my
universe. But population under the study was individuals who have invested their surplus
money in some or the other venture. Sample Size is 50.
 Limitations of study

• Time and Cost – the time and cost play an important role where one goes for a
particular study. Both of these factors become constraints especially when a study is
conducted at academic level.

• Sample Size – due to time and cost constraints the large sample was not taken. Since
the study conducted was with a small sample hence the exact picture cannot be
revealed and the findings cannot be generalized.

• Choice of Population- The population selected was limited to the places in

Panchkula, Mohali and Chandigarh. Hence results would have altered if some other
population had been selected.

• Inherent Discrepancies in the Questionnaire- The questionnaire might be having

some undetectable errors and limitations, which could shape the responses into a
particular fashion. No pre-test was done before the circulation of the questionnaire.

• Bias in Response- The data is entirely based on responses given by respondents

which may be biased one due to their personal bias in replying the questions. They
may not be very serious or interested in replying the questions and make it very
lightly, due to which data may not be very accurate.
OBSERVATIONS AND ANALYSIS
 TABLE 1Age of Respondents

Respondents Age

6% Less than 30
24% 36%
30-40
40-50
34% 50 & above

(Figure 1)

Interpretation:
In this question we have tried to capture every age group. We have made different slabs
covering different age group i.e. less than 30 years, 30 -40 years, 40-50 years, 50 & above.

TABLE 2 Income Level of Respondents

 Income Level of Respondents

60%

50%

40%
%age of
30% 56%
Respondents
20% 32%
10%
10%
2%
0%
Upto 2 lakh 2-5 lakh 5-8 lakh >8 lakh

(Figure 2)

Interpretation:

The above graph shows the various income groups covered to carry out the study. It shows
the percentage of respondents with different levels of income. Maximum no. of respondents
i.e. 56% have their income lying in category upto 2 lakh per annum.

TABLE 3Occupation of Respondents

 Occupation of Respondents

2%0%
30%

Business
service
Retired
Others

68%

(Figure 3)

Interpretation:

In this question we have tried to cover people of all occupation i.e. business class, service
class, retired and others. Maximum no of respondents were of service class i.e. 34 which is
68% of all the respondents. There were 15 people who were of business class and others
were retired.

TABLE 4 Most Preferred Investment Option

 % Age of Respondents Preferring Different Investment Avenues

10% 6%
34% Bank deposits
22%
MF
8% Insurance
Bonds
Shares
32%
Real Estate
Others
58%

(Figure 4)

Interpretation:

In the above question we have to cover the investment avenues available and preferred by
people. Ranks are given as 1 to most preferred investment avenue among the various
investment avenues available. Insurance is most preferred investment avenue as maximum
no of respondents have ranked it as 1 i.e 58% respondents.

TABLE 5 Income Invested By Respondents

 Income Invested

50%
45%
40%
35% 6%
14%
30% 40%
12% %AGE OF RESPONDENTS
25%
20% 10% %AGE INCOME INVESTED
15% 18% 30%
25%
10% 20%
15%
5% 10%
5%
0%
1 2 3 4 5 6

(Figure 5)

Interpretation:

Here we come to know that maximum no. of respondents’ i.e 40% prefer to invest 10% of
their income and only 6% invest 30% of their income. Therefore most of the people
generally prefer to invest small portion of their income.
 TABLE 6 Consultants Preferred By Respondents

% Age of Respondents Using Different Modes

of Information

Self analysis
8% 10% 0 Investment consultant
55% Internet
Friends/Relatives
36%
Television
12% 10% Newspapers
Other

(Figure 6)

Interpretation:
In the above question we have tried to cover various modes used by respondents to take
investment decision. 55% of the respondents do self analysis, 36% consult their
friends/relatives, and only 8% of the respondents depend on television & is least preferred.

TABLE 7 TERM OF INVESTMENT PREFERRED

Term of Investment preferred

60%

50%
%age of Respondents

40%

30% %AGE
50%
20%
30%
10% 20%

0%
Short term Long term Both

(Figure 7)

Interpretation:
From the above graph we come to know that people generally prefer long term investment
over short term in order to meet their future requirements like education, marriage of their
children, buying a house, old age needs etc. 50% of the people go in for both i.e long term as
well as short term investment.

TABLE 8 Primary Objective of Investment

 Purpose of Investment

50%
45%
40%
35%
30%
25% 46%
20% %age
36%
15%
10% 18%
14%
5% 8%
2%
0%
Safety of Liquidity Regular Capital Tax Others
funds income gain savings

(Figure 8)

Interpretation:

In the above graph, the respondents were asked to rate the factors which affect their
investment decision, 46% of respondents rate security of funds /risk cover as most important
factor affecting their investment decision. While 36% have preferred tax saving over other
factors.

TABLE 9 Source of Investment

 Source of Investment

80%
70%
%age of Respondents

60%
50%

40% %
70%
30%
20%
10% 18%
12%
0%
Authorized dealers Brokers AMC

(Figure 9)

Interpretation:

The above graph reveals that out of total respondents 70% of the respondents invest their
money through Authorized Dealers, 18% through Brokers & 12% through Asset
Management Companies.

10) Does occupation effects investment behavior?

Let us take the null hypothesis that occupation & investment behaviour are
independent.
Ψ2calculated = Σ (O-E-.5)2
E
=(6-5.6-0.5)2/5.6+(4-5.27-0.5)2/5.27+(11-9.55-0.5)2/9.55+(1-1.31-0.5)2/1.31
+(3-3.62-0.5)2/3.62+(2-1.64-0.5)2/1.64+(1-0.98-0.5)2/0.98+(10-10.6-0.5)2/10.6
+(11-9.97-0.5)2/9.97+(17-.08-0.5)2/18.08+(3-2.49-0.5)2/2.49+(7-6.85-0.5)2/6.85
+(3-3.11-0.5)2/3.11+(2-.87-0.5)2/1.87+(1-0.8-0.5)2/0.8+(1-0.75-0.5)2/0.75
+(1-1.36-0.5)2/1.36+(0-0.18-.5)2/0.18+(1-0.51-0.5)2/0.51+(0-0.23-0.5)2/0.23
+(0-0.14-0.5)2/0.14

=.0017+.594+.094+.500+.346+.0119+.235+.1141+.028+.1380+.00004+.017
+.1196+.0732+.1125+.0833+.5438+2.568+.00019+2.316+2.92
= 10.816

Degrees of freedom= (r-1)(c-1)

= 6(2)
Ψ2table= 21.026
2 2
As, Ψ calculated < Ψ table
So, difference is insignificant. Means null hypothesis is accepted. Hence occupation &

Investment behaviors are independent.

 11) Is Investment Behavior of people influenced by Age?

Let us take Null hypothesis that age group and investment behavior are
dependent.
Ψ2calculated = Σ (O-E-.5)2
E

=(7-5.6-0.5)2/5.6+(7-5.27-0.5)2/5.27+(7-9.55-0.5)2/9.55+(0-1.31-0.5)2/1.31+(6-.62-
0.5)2/3.62+(0-1.64-0.5)2/1.64+(1-0.98-0.5)2/0.98+(5-5.8-.5)2/5.8+(4-5.45-0.5)2/5.45+(12-
9.89-0.5)2/9.89+(2-1.36-0.5)2/1.36+(3-3.75-.5)2/3.75+(2-1.70-0.5)2/1.70+(1-1.02-
0.5)2/1.02+(3-4.2-0.5)2/4.2+(3-3.95-.5)2/3.95+(8-7.16-0.5)2/7.16+(2-0.98-0.5)2/0.98+(1-
2.71-0.5)2/2.71+(3-.23-.5)2/1.23+(1-0.74-0.5)2/0.74+(2-1.4-0.5)2/1.4+(2-1.31-.5)2/1.31+(2-
2.38-0.5)2/2.38+(0-0.32-0.5)2/0.32+(1-0.90-0.5)2/0.90+(0-.41-.5)2/0.41+(0-0.24-0.5)2/0.24

=0.1446+0.2870+0.9740+2.5+0.9763+2.792+0.235+0.2913+0.6977+0.2620+0.0144+0.416+
0.0235+0.265+0.688+0.532+0.016+0.275+1.802+1.311+0.0822+0.007+0.0275+0.325+2.10
1+0.177+2.019+2.281

= 21.5225

Degrees of freedom = (6) (3) = 18

Ψ2table = 28.869
As, Ψ2table > Ψ2calculated
So, difference is insignificant. Hence null hypothesis is accepted i.e. age group
and investment behavior are dependent.
CONCLUSION

CONCLUSION
Faced risks, it is sometimes difficult to see why many people operate businesses. They are
certainly in need of some financial protection and they can find it in the purchase of
insurance.

The sample so analyzed has insurance as the most preferred form of investments because
people need security. They want to own houses, run cars, sell goods, build factories, fly
planes, sail ships, but at the same time, they do not want to be exposed financially to all the
risks involved in these endeavors.

Insurance gives them the security they need. It gives them peace of mind; it relieves them of
a great deal of financial hardship, and in some cases helps to avoid bankruptcy. Insurance
does not take away the risk. The house may still burn down, the car may be in an accident
but at least a large element of the cost involved will be met by the insurance company.

Most people’s needs fall into a few common categories such as a roof above their heads,
enough resources to educate their children and marry them off and finally, and sufficient
savings to live their lives out in comfort after retirement. This is the dream of everyone.

Yet, no matter how much they save and how prudently they plan, most people find it difficult
to generate the resources to meet these basic needs. The roadblock is inflation. No matter
how much you earn, the steady rise of prices can destroy all retirement plans.

The most reasonable means of out spacing inflation is by investing in equities. It is true that
equities are not safe, and one can lose everything by dabbling incompletely in the share
market. There are very few investment channels that can beat inflation in the long run.

Of these, equity investment is the safest and most time-tested of paths. Because bank
deposits, company fixed deposits and other instruments provide more stable returns, these are
regarded as “safer” investments. Equity investors consistently deliver higher returns.
With the falling interest rates of banks & fixed deposits becoming the order of the day, the
equities are also becoming preferred form of investments.

Indeed depending on the risk profile and needs for current income as opposed to long-term
growth, investments should be spread across. Equities, Mutual funds, FD’s and bonds as a
good way of diversifying risks.

It has been found out that it is the age of the consumer which effects the investment
behaviour than the occupation.

Suggestions
• Instead of investing in PPF, salaried class people should reduce their investment in
PPF
• Business class should take into account real estate as they take equity.
• As investment banking is quite popular nowadays, banks are the right way to make
investment as the risk of cheaters among the promoters, speculators and stock
brokers, play all sort of games to lure helpless investors.
• Salaried class have to divert themselves, because now banks and PO schemes are not
that attractive and does not provide with good returns as it does not take into account
the inflation factor as they were in the past.
• Don’t buy at too high price because they may be high today & fall down tomorrow.
 Recommendations

Recommendations for the Organization

• The organization should fully disclose all the facts while dealing with their
customers.
• The organization should retain its customers by giving them correct information
regarding each and every fact and figure.
• The customer’s requirements should be met in the required manner.
• The organization should not disturb their customers through late night sms alerts.
• The organization should not make their customers to wait for a long time, their query
should be solved their and then.
• The new recruiters should be provided with sufficient training.
 BIBLOGRAPHY

1.) WWW.GOOGLE.COM
ANNEXURE