Summer Internship Project Report ON Investment Strategies: Saving Account and Ulips

SUMMER INTERNSHIP PROJECT REPORT
ON
INVESTMENT STRATEGIES:
SAVING ACCOUNT AND ULIPs
(SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF

MASTER’S DEGREE IN BUSINESS ADMINISTRATION)
Session: 2018-20
Submitted to: - Submitted by:

Mr. Tarun Jain Mohit Mudgal
Lecturer in MBA Dept. Roll No. 21/MBA/18
Univ. Roll No:
VAISH COLLEGE OF ENGINEERING, ROHTAK

AFFILIATED TO
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MAHARSHI DAYANAND UNIVERSITY, ROHTAK
DECLARATION
I hereby certify that the work which is presented in this Project Report
Entitled as: -
“INVESTMENT STRATEGIES IN SAVING ACCOUNT & ULIPS”
in partial fulfillment of the requirements for the award of the Degree of

Masters in Business Administration (MBA), Vaish College Of
Engineering, Rohtak is an authentic record of my original work carried out.
I have not submitted the matter embodied in the project report for the award of
any other degree.
(Mohit Mudgal)
Univ. Registration No.-03-my-1182
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ACKNOWLEDGEMENT
Project work is never the accomplishment of one individual. Rather it is an amalgamation of
the efforts, ideas and co-operations of a number of individuals.
It gives me immense pleasure to take this opportunity to thank all those who helped in
successfully completing the project.
I am extremely thankful to Mr. Rohit Bansal, for her timely guidance, support advice and
cooperation during the project. Her guidance is invaluable in this project otherwise project
would not have been according to the given format.
(Mohit Mudgal)
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PREFACE
Beginning of the system project is entirely creative. This does not come all of a sudden, but
it comes by result of discussion, consultation and contemplation. Problem unsolved here can
never be satisfactory eliminated later. It is therefore a slow process.
Moreover practical training is an important part of management courses. The
theoretical studies are not sufficient to get into the corporate world. Only practical
knowledge can help us to understand the complexities of large scale organizations.
To develop healthy managerial and administration skill in potential managers, it is
necessary that theoretical knowledge must be supplemented with exposure to the real
environment. Actually, it is life for, a management itself is realized.
In my case I confronted myself to HDFC Bank Ltd. And the exposure that I could not
have gained from the books. I found it very interesting and challenging. My topic of project
is STUDY OF INVESTMENT STRATEGIES IN SAVING ACCOUNT & ULIPS with
special reference to HDFC BANK LTD.
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Contents
CHAPTER 1
o Profile of HDFC BANK LTD
 Organizational setup
 Capital Structure
 Management hierarchy
 Awards to HDFC Bank
 Product range
CHAPTER 2
o Objectve
 Objective of study
 Relevance of study
CHAPTER 3
o Introduction
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 Investment: Science and not art
 Needs of Investors
 Power of compounding
 Investment avenues in India
CHAPTER 4
o Research Methodology
 Research design
 Universe
 Survey sample
 Sampling and Sampling design
CHAPTER 5
o ULIP Plans and Saving accounts
 Ulip plans
 Endowment plans
 COMPARISON OF HDFC STANDARD LIFE ULIP vis-à-vis OTHER POPULAR ULIPS
AVAILABLE IN INDIA
CHAPTER 6
o Data analysis and Interpretation
 Customer survey
 Findings
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 Recommendations
CHAPTER 7
o CONCLUSIONS
o BIBLIOGRAPHY
o ANNEXTURE
CORPORATE PROFILE
The project in hand has been assigned to the scholar by the HDFC Bank,
Bahadurgarh and thus, this chapter has been devoted to give a brief profile of the
Bank. The profile includes its inception, promoters, capital structure, management,
technology used, organisations served by the bank, its business focus and profile,
distribution network, rating, its amalgamation with TIMES BANK, its achievements
and the product range offered by the bank to the customers.
INCEPTION
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. The bank was incorporated in August 1994 in the name of 'HDFC
Bank Limited', with its registered office in Mumbai. The bank commenced operations
as a Scheduled Commercial Bank in January 1995.
PROMOTER
HDFC is India's premier housing finance company and enjoys an impeccable track
record in India as well as in international markets. Since its inception in 1977, the
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Corporation has maintained a consistent and healthy growth in its operations to
remain the clear market leader in mortgages in India. Its outstanding loan portfolio
covers over a million dwelling units. HDFC has developed significant expertise in
retail mortgage loans to different market segments and also has a large corporate
client base for its housing related credit facilities. With its experience in the financial
markets, a strong market reputation, large shareholder base and unique consumer
franchise, HDFC was ideally positioned to promote a bank in the Indian
environment.
CAPITAL STRUCTURE
The authorized capital of HDFC Bank is Rs 460 crore (Rupees 4.6 billion). The
paid-up capital is Rs 283.2 crore (Rupees 2.83 billion). The HDFC Group holds 24.5
percent of the bank's equity while about 13.3 per cent of the equity is held by the
depository in respect of the bank's issue of American Depository Shares (ADS / ADR
Issue). The Indian Private Equity Fund, (Mauritius) and Indocean Financial Holding
Ltd. (both funds advised by Indocean Chase Capital Advisors, the Indian affiliate of
JP Morgan Partners, formerly known as Chase Capital Partners) together hold about
11.6 per cent of the bank's equity. Roughly 18 per cent of the equity is held by
FIIs, NRIs / OCBs while the balance is widely held by approximately 300,000
shareholders. The shares are listed on The Stock Exchange, Mumbai (BSE), the
National Stock Exchange (NSE) and The Stock Exchange, Ahmedabad (ASE). The
bank's American Depository Shares are listed on the New York Stock Exchange
under the symbol "HDB".
MANAGEMENT
Mr. Surender Singh took over as the bank's Chairman in July 2001. Prior to this,
Mr. Singh was a Deputy Governor of the Reserve Bank of India.
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The Managing Director, Mr. Aditya Puri, has been a professional banker with
Citibank for over 20 years, and before joining HDFC Bank in 1994 was heading
Citibank's operations in Malaysia.
The Bank's Board of Directors is composed of eminent individuals with a wealth of
experience in public policy & administration and commercial banking. Senior
executives representing HDFC and JP Morgan Partners (formerly known as Chase
Capital Partners) are also on the Board. Senior banking professionals with substantial
experience in India and abroad head various businesses and functions and report to
the Managing Director. Given the professional expertise of the management team and
the overall focus on recruiting and retaining the best talent in the industry, the bank
believes that its people are a significant competitive strength.
TECHNOLOGY
HDFC Bank operates in a highly automated environment in terms of information
technology and communication systems. All the bank's branches have connectivity
which enables the bank to offer speedy funds transfer facilities to its customers.
Multi-branch access is also provided to retail customers through the branch network
and Automated Teller Machines (ATMs).
The Bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world class bank.
In terms of software the Corporate Banking business is supported by Flexcube, while
the Retail Banking business by Finware, both from i-flex Solutions Ltd. (formerly
Citicorp Information Technology India Limited). The systems are open, scaleable and
web-enabled.
The Bank has prioritized its engagement in technology and the internet as one of its
key goals and has already made significant progress in web-enabling its core
businesses. In each of its businesses, the Bank has succeeded in leveraging its
market position, expertise and technology to create a competitive advantage and build
market share.
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COMPANIES
Corporate Banking reflects HDFC Bank's strengths in providing corporate clients
large or SME, an ICE company or a supplier organization - a wide array of
commercial, transactional and electronic banking products. The bank achieve this
through innovative product development and a well-integrated approach to relationship
management.
The bank offers blue chip companies in the Indian corporate sector a full range of
client-focused banking services, including working capital finance, trade and
transactional services, foreign exchange and cash management, to name a few. The
product offerings are suitably structured taking into account a client's risk profile and
specific needs. Based on the bank’s superior product delivery, industry benchmark
service levels and strong customer orientation, it has made significant inroads into
the formal banking consortia of a number of Indian companies including
multinationals, domestic business houses and prime public sector companies.
The bank’s alliance with Chase permits it to offer a vast range of international
products in the field of foreign exchange and risk hedging. Below are the category
of the organizations.
Large Indian Private Companies
Prime Public Sector Companies
Multinational Companies
Small & Medium Companies (Below Rs.100 crore)
New Economy Companies (InfoTech, Communication & Entertainment)
Suppliers and Customers of Large Corporates
E-Commerce Initiatives
BUSINESS FOCUS
HDFC Bank's mission is to be a World-Class Indian Bank. The Bank's aim is : To
build a sound customer franchise across distinct businesses so as to be the preferred
provider of banking services in the niche segments that the bank operates in and to
achieve healthy growth in profitability consistent with the bank's risk appetite. To
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ensure the highest level of ethical standards, professional integrity and regulatory
compliance, HDFC Bank's business philosophy is based on four core values :-
Operational excellence
Customer Focus
Product Leadership
People
The Bank signed a strategic business collaboration agreement with Chase Manhattan
Bank in February 1999.
BUSINESS PROFILE
HDFC Bank caters to a wide range of banking services covering both commercial
and investment banking on the wholesale side and transactional / branch banking on
the retail side. The bank has three key business areas :-
a) Wholesale Banking
The bank provides loans, credit substitutes, deposit products, documentary credits
(primarily letters of credit), guarantees and foreign exchange and derivative products,
primarily to large highly-rated Indian corporations. The bank also provides a broad
range of transactional banking services to a wide range of corporations and financial
institutions. Through its cash management services and extensive branch network, the
bank provides its clients physical and electronic payment and collection mechanisms
that are faster and more cost-effective than traditional Indian payment and clearing
systems. The bank also provides clearing and cash settlement services to seven of
the major stock exchanges in India. In addition, it provides custody services to
Indian mutual funds and correspondent banking services to more than 20 foreign
bank and more than 500 co-operative banks. The bank recently became the first
new private sector bank to be appointed by the Government of India to collect
direct taxes.
b) Retail Banking
The objective of the Retail Bank is to provide a full range of financial products and
banking services, giving the customer a one-stop window for all his banking
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requirements. The products are backed by world class service and delivered to the
customers through various delivery channels including the branch network, as well as
alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile
Banking.
The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank
Plus and the Investment Advisory Services programs have been designed keeping in
mind needs of customers who seek distinct financial solutions, information and
advice on various investment avenues. The Bank also has a wide array of retail loan
products including Loans against shares, Auto Loans, Personal Loans and Loans for
Consumer Durables and Two-wheelers. It is also a leading provider of Depository
Participant (DP) services for retail customers.
HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the Mastercard Maestro debit card
as well. The debit card allows the user to directly debit his account at the point of
purchase at a merchant establishment, in India and overseas. The Bank launched its
credit card in association with VISA in November 2001. The Bank is well
positioned as a leader in various net based B2C opportunities including a wide
range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.
c) Treasury Operations
Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporates need more sophisticated
risk management information, advice and product structures. These are fine pricing
on various treasury products which are provided through the bank's Treasury team.
DISTRIBUTION NETWORK
HDFC Bank is head-quartered in Mumbai. The Bank at present has an enviable
network of 1416 branches spread across 550 cities including Mumbai, Delhi, Kolkata,
Chennai, Bangalore, Ahmedabad, Vadodara, Indore, Coimbatore, Pune, Cochin,
Chandigarh, Mohali, Amritsar, Panchkula, Jalandhar, Ludhiana, Jaipur, Hyderabad,
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Vizag, Goa, Bhopal, Gurgaon, Rohtak, Jhajjar Lucknow, Surat, Trivandrum, Vijaywada,
Khanna, Patiala, and Aurangabad. All branches are linked on an online real-time
basis, i.e. customers can getup-to-the-second information about their accounts. The
bank's retail operations in Mumbai, Delhi, Chennai, Kolkata, Bangalore, Chandigarh,
Hyderabad, Ahmedabad and Pune are supported by Telephone Banking centres. The
Bank's expansion plans take into account the need to have a presence in all major
industrial and commercial centres where its corporate customers are located as well
as the need to build a strong retail customer base. Being a clearing / settlement bank
to various leading stock exchanges, the Bank will also have branches in all the
centres where the NSE / BSE has a strong and active member base.
The Bank also has a network of over 3382 networked ATMs across these cities.
Moreover, HDFC Bank's ATM network is within reach of all domestic and
International Visa / MasterCard, Visa Electron / Maestro, Plus / Cirrus and American
Express Credit / Charge cardholders. It is the only bank in India which provides
access to all the three major International Card Networks on its ATM network.
RATING
HDFC Bank's programme for Certificates of Deposits has been rated by the Indian
rating agency Credit Analysis & Research Ltd. (CARE). The CDs are rated PR 1+
which is the highest rating for short term instruments indicating superior capacity for
repayment.
TIMES BANK AMALGAMATION

In a milestone transaction in the Indian banking industry, Times Bank Limited -
another new private sector bank promoted by Bennett, Coleman & Co. Ltd. (Times
Group) was merged with HDFC Bank Ltd., effective February 26, 2000. As per the
scheme of amalgamation approved by the shareholders of both banks and the
Reserve Bank of India, shareholders of Times Bank received 1 share of HDFC Bank
for every 5.75 shares of Times Bank. The amalgamation added significant value to
HDFC Bank in terms of increased branch network, expanded geographic reach,
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enhanced customer base, skilled manpower and the opportunity to cross-sell and
leverage alternative delivery channels.
Few facts About HDFC BANK:

Incorporated in August 1994.
Commenced operations in January 1995.
Initial paid – up capital Rs. 560 crore.
Capital structure
As on 31st March, 2009 the authorised share capital of HDFC Bank is Rs. 560 crore. The
paid-up capital as on the said date is Rs. 425,38,41,090/- ( 42,53,84,109 equity shares of Rs
10/- each). The HDFC Group holds 19.38% of the Bank's equity and about 17.70 % of the
equity is held by the ADS Depository (in respect of the bank's American Depository Shares
(ADS) Issue). 27.69 % of the equity is held by Foreign Institutional Investors (FIIs) and the
Bank has about 5,48,774 shareholders
In terms of market capitalization it stands second only to State Bank Of India.
More than 52687 staff members.
More than 1416 branches across 550 cities in India.
More than 3382 ATMs across India.
Total assets of Rs. 44160 crore as of 31.03.09.
Total profit for year 2009 is the 2245 crore .
One million retail accounts.
On 26th Feburary’2000 Times Bank was amalgamated with HDFC Bank. This was
the first merger of two private sector banks on a voluntary basis.
Total credit card are 44 lakh . debit card are 91 lakh were issused to customer.
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AWARDS TO THE CREDIT OF HDFC BANK
HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian
Bank". We realised that only a single-minded focus on product quality and service
excellence would help us get there. Today, we are proud to say that we are well on our way
towards that goal.
It is extremely gratifying that our efforts towards providing customer convenience have been
appreciated both nationally and internationally.
2019
Bank of the Year and Best Large Bank, Business Today – Money Today Financial
Awards 2019
 Best Bank in India 2019, by Global magazine Finance Asia.
 Ranked 60th in 2019 Brand Z Top 100 Most Valuable Global Brands
 HDFC Bank was featured Brand Z Top 100 Most Valuable Global Brands
2019 for the 5th consecutive year. The Bank's brand value has gone up from
$20.87 billion in 2018 to $22.70 billion in 2019.
 Best Large Bank & Fastest Growing Large Bank in 2019, by Business World
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Magna Awards
PRODUCT RANGE
A Wide Spectrum Of Products and Services. Ever since its perception in 1994 HDFC
Bank has achieved great heights in banking sector. Banking itself is maintaining
Public Relation with the public. It is one business whose foundation is laid on
‘RELATION WITH CUSTOMERS’.
HDFC Bank, an Indian Bank that offers International Standards Of Services. The
customer gets professional and speedy service with the help dedicated staff together
with latest technology in Banking.
Banking with options . . .
SAVINGS ACCOUNT
The customer enjoys more than the usual facilities offered by a savings account. For
example, a free ATM Card, Interbranch banking, Net banking, Bill Pay and phone
banking among plenty of other services.
CURRENT ACCOUNT
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With current account, the customer gets a personalized cheque book, interbranch
banking, and a monthly account statement in addition to a host of other features.
HDFC BANK PREFERRED
This is a preferential banking service through which customer is assigned a dedicated

Relationship Manager, who is one point contact for all banking needs. He will also
get fee waivers on bank charges, cheques payable at par across the country, free
portfolio advisory services, enhanced ATM withdrawal limit, priority locker allotment,
free Demat account and subsidized interest rates on loans and many other privileges.
SWEEP-IN-ACCOUNT
This facility is a fixed deposit linked to savings account. So whenever one is short
of funds in savings account, he can just issue a cheque (or use ATM card). The
money is then automatically swept in from the fixed deposit into the savings
account.
CLUSTER DEPOSITS
The fixed deposit is held in units of Re.1 each. Thus if you need to break your
fixed deposit in emergency, you can withdraw up to exact rupee required. The rest of
the money continues to earn high interest rates.
DEMAT ACCOUNT
HDFC Bank is the largest depository participant amongst banks with over 3,50,000
Demat Accounts. A Demat Account can be opened which provides hassle-free
transactions on the shares and a wide range of other benefits.
Innovative services for the customer convenience . . .
INTERCITY / INTERBRANCH BANKING
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The customer can access his account from any of the 238 branches in 127 cities. So
one can withdraw cash from another branch, through a self cheque. He can also
transfer funds between two accounts, or deposit a local cheque in one branch and
get it credited to his account in another city.
BILLPAY
In Mumbai this facility enables the customer to pay all his MTNL, BPL Mobile,
Orange, BSES, and MSEB bills, over the phone, ATMs or through Internet. In Delhi
one can pay their Airtel bills, in Chennai he can pay his RPG & Sky cell cellular
bills, in Calcutta customer can pay his Command cell phone bills and in Kerela
BPL Cellular bills through this facility. This scheme has also started in many other
main branches. So one would not have to spend time in long queues or writing
cheques.
NETBANKING
Now through the Internet, the customer will be able to transfer funds within their
accounts, open a fixed deposit, get a bankers cheque or a demand draft, make a
TDS enquiry, request a Stop Payment on a cheque or a series of cheques, request
for a new cheque book or even check the account balance and even pay the bills
(i.e. Cellular phone, telephone, electricity). With this service being online one can
actually see the transactions being updated instantly on the screen.
PHONE BANKING
One can bank from home or anywhere else with the 24 hour automated service, can
get his account details, ask for a cheque book or a statement, open a fixed deposit,
transfer money within his own accounts, order a demand draft, stop cheque payment,
pay his bills (i.e. cellular phone, telephone, electricity) etc. all by phone.
MOBILE BANKING
It is an innovative service which allows the customer to conduct his banking
transactions from cell phone without making a call or incurring airtime charges. It
enables him to access his HDFC Bank account through the cell phone just by
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punching a few buttons. All he needs to do is send short text messages and request
for account balance, cheque or even stop payment. The reply can be viewed in
privacy on the screen of the cell phone. Even better, is that it allows him to access
bank account in not just 550 cities in India but also 80 countries worldwide. Which
means one can access his account even in places where HDFC Bank does not have
a branch and also while touring abroad. And that too without having made a call or
incurring an airtime cost.
ATM 24-HOUR BANKING

Apart from routine transactions, the customer can also pay his utility bills and
transfer funds, at any of the 775 ATMs in 127 cities across the country all year
round.
DEBIT CARD
HDFC Bank has launched the international Debit Card in select branches in
association with Visa. The card functions as an ATM Card and can be used at any
of the HDFC Bank ATMs or the Visa Plus network. It can also be used while
shopping at over 15000 Visa Electron merchant outlets, across India. The amount
spent would be automatically debited from the savings account.
SAFE DEPOSIT LOCKERS

The customer can now experience piece of mind with all his valuables under the
security of the lockers that are available at various branches.
Loans for every need . . .

The loans come to the customer in easy to pay monthly installments that he can
pay at his convenience. And the loans are available with easy documentation and
quick delivery.
PERSONAL LOANS
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The customer can take a loan up to Rs.3 lakhs for a wedding, education, purchase
of a computer, an exciting holiday or just about anything.
CAR LOANS
Car loans will finance up to 90 per cent of the cost of a car of customer’s choice!
And the loans come to him with easy documentation and speedy processing at
attractive interest rates.
LOANS AGAINST SHARES

Now one can also get loan at attractive interest rates against physical shares up to
50 per cent of market value of his shares, till Rs.10 lakhs. In case of demat shares,
he can get loan against shares of up to 65 per cent of the market value of his
shares, till Rs.20 lakh.
Thus, in view of the strong profile, it could be safely stated that since its inception
in 1994, the bank has excelled in terms of operational excellence, customer focus,
product leadership through automisation, well networking, expansion of branches
throughout the country and alliances with the other banks abroad to provide services
to his customers, introduction of new innovative products and providing superior
customer satisfaction to accomplish itsmission.
Objectives of Study
 The objective of this project report is to design an investment strategy for investors
and Analyzing the investments in Saving Accounts and Unit Linked Insurance Plans
(ULIPs).
 The present study has been designed to focus on to know the awareness of investors
about investing in any financial product.
 ULIPs are life insurance plans whose returns are linked to the stock markets. ULIP
returns fluctuate with the ups and downs in the stock market.
 With the advent of Unit Linked Insurance Plans, the life insurance products have
changed from being only a life cover product to an investment vehicle with built-in
features of life insurance and tax benefits.
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 These days’ innovative products are flooding the market, which offers the features of
a traditional insurance policy with added benefits of high return from the market
instruments. Saving Accounts are not just to deposit the savings in bank.
 Now it has totally changed & different from saving in post offices.
 Now ATM Debit cards and many other facilities have made the Saving Account a
necessity for an individual.
 Comparison between the products of bank and insurance is necessary to provide
guideline to investors for investing money.
INTRODUCTION
INVESTMENTS
“INVESTMENT IS A SCIENCE AND NOT AN ART”
Savings form an important part of the economy of any nation. With the savings invested in
various options available to the people, the money acts as the driver for growth of the
country. Indian financial scene too presents a plethora of avenues to the investors. Though
certainly not the best or deepest of markets in the world, it has reasonable options for an
ordinary man to invest his savings.
Investments, unlike works of art, cannot afford the luxury of experimenting. Investing is not
guesswork. It takes more than just a 'tip', it needs training to plan, instinct to pick and sheer
intellect to make it work for the investor. Human nature is fickle, his wants keep changing.
An investment can be described as perfect if it satisfies all the needs of all investors. So, the
starting point in searching for the perfect investment would be to examine investor needs. If
all those needs are met by the investment, then that investment can be termed the perfect
investment.
Most investors and advisors spend a great deal of time understanding the merits of the
thousands of investments available in India. Little time, however, is spent understanding the
needs of the investor and ensuring that the most appropriate investments are selected for
him.
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The Investment Needs of an Investor
The investment needs of an investor are simply his lifestyle needs converted into financial
terms. These include the normal living expenses, accommodation, food, as well as
education, health, recreation, transport, special occasions like marriages, festivals etc. These
needs are defined not only in current terms but also over the rest of the life. These needs
tend to remain the same over the years. It is the current lifestyle and the lifestyle desired in
future that determines the attitude of investor towards investments.
By and large, most investors have eight common needs from their investments:
1. Security of Original Capital;
2. Wealth Accumulation;
3. Comfort Factor;
4. Tax Efficiency;
5. Life Cover;
6. Income;
7. Simplicity;
8. Ease of Withdrawal;
9. Communication.
 Security of original capital: The chance of losing some capital has been a primary
need. This is perhaps the strongest need among investors in India, who have suffered
regularly due to failures of the financial system.
 Wealth accumulation: This is largely a factor of investment performance, including
both short-term performance of an investment and long-term performance of a
portfolio. Wealth accumulation is the ultimate measure of the success of an
investment decision.
 Comfort factor: This refers to the peace of mind associated with an investment.
Avoiding discomfort is probably a greater need than receiving comfort. Reputation
plays an important part in delivering the comfort factor.
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 Tax efficiency: Legitimate reduction in the amount of tax payable is an important
part of the Indian psyche. Every rupee saved in taxes goes towards wealth
accumulation.
 Life Cover: Many investors look for investments that offer good return with
adequate life cover to manage the situations in case of any eventualities.
 Income: This refers to money distributed at intervals by an investment, which are
usually used by the investor for meeting regular expenses. Income needs tend to be
fairly constant because they are related to lifestyle and are well understood by
investors.
 Simplicity: Investment instruments are complex, but investors need to understand

what is being done with their money. A planner should also deliver simplicity to
investors.
 Ease of withdrawal: This refers to the ability to invest long term but withdraw funds
when desired. This is strongly linked to a sense of ownership. It is normally triggered
by a need to spend capital, change investments or cater to changes in other needs.
Access to a long-term investment at short notice can only be had at a substantial cost.
 Communication: This refers to informing and educating investors about the purpose
and progress of their investments. The need to communicate increases when
investments are threatened.
It is also pertinent to differentiate between needs and wants. Wants can be described, as
transient needs. Wants focus on the short-term, and often lead to long-term investment
disappointment.
 Security of original capital is more important when performance falls.
 Performance is more important when investments are performing well.
 Failures engender a desire for an increase in the comfort factor.
Perfect investment would have been achieved if all the above-mentioned needs had been met
to satisfaction. But there is always a trade-off involved in making investments. As long as
the investment strategy matches the needs of investor according to the priority assigned to
them, he should be happy.
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The Ideal Investment strategy should be a customized one for each investor depending on
his risk-return profile, his satisfaction level, his income, and his expectations. Accurate
planning gives accurate results. And for that there must be an efficient and trustworthy
roadmap to achieve the ultimate goal of wealth maximization.
Power of Compounding –
The Power of Compounding can give astounding results. The chart shows how saving at a
more than average rate of 20% can make the savings increase substantially over the next 20
years. A 1 lakh savings today can increase to close to Rs. 38 lakhs in 20 years time. Here we
assume that annual compounding is done at the same rate as the investment rate throughout
the period of investment.
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Designing an investment strategy is a structured process that begins with analyzing the
needs of the customer and profiling them according to the risk appetite of the investor. The
next step involves internalizing and mapping these needs and matching them with the
available avenues for investing. Next in line is evaluating and selecting a basket of low cost-
high return investment products that matches the best with the investor’s profile. This basket
of investment products represents the optimum portfolio of the investor. As is rightly been
said that Perfection is a journey, not a destination; continuous monitoring and Portfolio
Management is the most important task.
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Investment Avenues in India
Traditionally, Indian investors have been going for investment avenues ranging from low
return-low risk Fixed Deposits to high risk-high-return Share Markets. Till nineties,
investors were enjoying high interest rates in the range of 16-22 % on Fixed Deposits. With
the outset of a liberalized era and opening of Indian economy interest rates softened and
Fixed Deposits were no longer the preferred choices of many investors. They looked out
beyond the traditional products. These risk savvy investors turned to the stock market, which
had been giving good returns on select scrip.
Conventionally, Indian investors were investing in the following avenues:
 Fixed Deposits – They cover the fixed deposits of varied tenors offered by the
commercial banks and other non-banking financial institutions. These are generally a
low risk prepositions as the commercial banks are believed to return the amount due
without default. By and large these Fads are the preferred choice of risk-averse
Indian investors who rate safety of capital & ease of investment above all
parameters. Largely, these investments earn a marginal rate of return of 6-8% per
annum.
 Government Bonds – The Central and State Governments raise money from the
market through a variety of Small Saving Schemes like national saving certificates,
Kisan Vikas Patra, Post Office Deposits, Provident Funds, etc. These schemes are
risk free, as the government does not default in payments. But the interest rates
offered by them are in the range of 7% - 9%.
 Money-back Insurance - Insurance in India is mostly sold and bought as investment
products. They are preferred because of their add-on benefits like financial life-
cover, tax-savings and satisfactory returns. Even if one does not manage to save
money and invest regularly in financial instruments, with insurance, the policyholder
has no choice. If he does not pay his premiums on time, his insurance cover will
lapse. Money-back Insurance schemes are used as investment avenues as they offer
partial cash-back at certain intervals. This money can be utilized for children’s
education, marriage, etc.
26
 Endowment Insurance – These policies are term policies. Investors have to pay the
premiums for a particular term, and at maturity the accrued bonus and other benefits
are returned to the policyholder if he survives at maturity.
 Bullion Market – Precious metals like gold and silver had been a safe haven for
Indian investors since ages. Besides jewellery these metals are used for investment
purposes also. Since last 1 year, both Gold and Silver have highly appreciated in
value both in the domestic as well as the international markets. In addition to its
attributes as a store of value, the case for investing in gold revolves around the role it
can play as a portfolio diversifier.
 Stock Market – Indian stock markets particularly the BSE and the NSE, had been a
preferred destination not only for the Indian investors but also for the Foreign
investors. This is evident from the fact that FIs are buying huge stakes on the Indian
bourses. Although Indian Markets had been through tough times due to various
scams, but history shows that they recovered very fast. Many scrips had been value
creators for the investors. People have earned fortunes from the stock markets, but
there are people who have lost everything due to incorrect timings or selection of
fundamentally weak companies.
The psyche of Indian investors has changed a lot in the past few years. They are becoming
more risk-savvy. But side by side they have become more demanding too. Various
institutions have come up with a variety of innovative products catering to the requirements
of a variety of investors’.
These include:
 Mutual Funds - There is a collection of investors in Mutual funds that have

professional fund managers that invest in the stock market collectively on behalf of
investors. Mutual funds offer a better route to investing in equities for lay investors.
A mutual fund acts like a professional fund manager, investing the money and
passing the returns to its investors. All it deducts is a management fee and its
expenses, which are declared in its offer document.
 Unit Linked Insurance Plans - ULIPs are remarkably alike to mutual funds in
terms of their structure and functioning; premium payments made are converted into
27
units and a net asset value (NAV) is declared for the same. In traditional insurance
products, the sum assured is the corner stone; in ULIPs premium payments is the key
component.
RESEARCH DESIGN
A research design is a specification of methods and procedures for acquiring the
information needed. It is overall operation pattern and the framework of the project
that stipulates what information is to be collected from which source and by what
procedure.
For the present study our research design has been Exploratory cum Descriptive. It
is Exploratory as the efforts have been made to know about awareness of investors
about investment in any financial product and their expectation from different investment
plans .
It is descriptive in a sense that scholar has analyzed the overall functioning of the
HDFC BANK LTD. in terms of its capital structure, management, focus of the bank,
the products offered by the bank and its unique accomplishments. Moreover, the
study also includes the analysis of current services provided by the banks to their
customers .
UNIVERSE
This Survey is an exposition of all the investors in DELHI & NCR Region. Therefore, for
the accomplishment of this work our Universe of the study is confined only to DELHI &
NCR Region.
SURVEY POPULATION
For the purpose of selection of the sample, our survey population has been all the
persons who have interest in investment and who are investing currently.
SAMPLING AND SAMPLING DESIGN

Sampling may be defined as the selection of some part of an aggregate or totality on the
basis of which a judgment or inference about the aggregate or totality is made. In simple
28
words, it is the process of obtaining information about the population by examining only a
part of it.
The sampling procedure to be followed is as follows:
1. Identification of the Universe: The universe to be studied is finite and includes the of
interacting with persons of different age and different occupation, HDFC Bank Ltd,Rohtak
2. Defining a Sampling unit: Here the sampling unit is an individual buyer (or
consumer).
3. Determining the size of the sample: Taking into consideration the size of the
population, the population variance, cost involved and the requirements of efficiency,
representativeness reliability, flexibility, and the parameters of interest in the research, the
sample size selected was 100.
4. Sampling procedure: This refers to the procedure by which respondents should be
chosen. The sampling design used is Non-Probability Sampling Design.
An Insight to Life Insurance –

Life Insurance Cover is a plan in which the insured person gives periodic premiums to the
Insurer for a particular period, and in case of any eventuality before the lapse of the policy,
the insurer pays the sum assured and the accrued bonus to the nominee of the insured
person. Now based on term of premium payment and the term of life coverage, the Life
Insurance covers are broadly classified into four categories:
 Whole Life Policy
 Money-Back Policy
 Endowment Policy
 Unit Linked Plans
In the Whole Life Policies, the insured person is provided a life cover till he attains an age of
65 irrespective of the age at which he subscribes to the policy. In this case, the person just
has to pay the insurance premiums for a particular period. In case of Money-Back Policies,
the insured person is provided a life cover for a particular term that is predetermined and the
29
premiums are decided on the basis of the term of policy. Additionally, the insured person is
given back some amount at regular intervals throughout
the term of the policy.
The Endowment Policies are given for a particular term for which the life cover is provided
and the insured person has to pay periodic premiums to the insurer. At successful completion
of the policy term, the insured person is given back all the survival benefits and accrued
benefits.
Unit Linked Insurance Plans are similar to Endowment schemes, but here the returns are not
guaranteed as the part of the annual premiums is invested in stock markets, debts and other
market linked securities. The life cover is provided to the insured person for particular term
and amount. In traditional insurance products, the sum assured is the corner stone; in ULIPs
premium payments is the key component.
Life Insurance covers besides giving a lease of life (literally to the dependants of policy
holder), provide several additional benefits:
• Gainful Investment: With the advent of ULIPs, insurance products graduated from being
a protection device to an investment vehicle. Investment based insurance plans give the
chance to benefit from the gains of the stock market and the debt market along with
providing the desired safety net.
• Inculcates discipline in savings: Even if one does not manage to save money and invest
regularly in financial instruments, with insurance, the policyholder has no choice. If he does
not pay his premiums on time, his insurance cover will lapse.
• Beats the Market fluctuations: Long-term investments are the sure fire way to beat the
stock market fluctuations. No better way than insurance, which carries perhaps the longest
investment term in the portfolio, mix.
• Tax benefits: Insurance has always been the first choice as a tax saving device. The
premiums that an investor pays and all the benefits payable to him under the plan are
eligible for tax benefits under section 80 C and 10(10D) of the Income Tax Act of 1961.
30
The Right Time to take Life Insurance Cover
Insurance should be a part of the investment portfolio of any investor and he should opt for
it when he is young. Considering that the average earning phase is only approximately 25
years. It makes a good sense to opt for insurance as soon as a person has a steady job and he
is able to service the insurance plan, there are several benefits to starting early. Such as:
• Using the tool of compounding: Compounding is a simple concept that offers astounding
returns: if the money is parked in an investment with a given return and then re-invests those
earnings, as they are received, the investment grows exponentially over time. Insurance
being a long-term contract, the premiums paid stay invested for a longer term, thereby
letting compounding work its magic.
• Enables matching payouts with financial needs : A person should opt for a policy he is
young and healthy and should be fine- tuned as both the income and needs evolve over time.
This will enable the cost of insurance to get absorbed during the early stages of the
insurance term and the payouts will take place when financial and protection needs escalate
in the later years.
• Lower Cost: The mortality rates are the least when a person is young, fit and strong. Also
health related riders such as the critical illness rider are also available at lower rates.
To conclude insurance should be a part of a person’s investment portfolio. In order to fully
exploit its associated benefits, an exposure to insurance must be taken when young and able
to service it.
Endowment plans: Safety with life insurance –

Conventional endowment plans seem to have diminished in popularity over the past few
years. Interestingly, their diminishing popularity has coincided with a greater appetite for
unit linked insurance plans (ULIPs).
31
Endowment plans are life insurance plans, which not only cover the individual’s life in case
of an eventuality but also offer a maturity value at the end of the term. In the event of the
individual’s demise, his nominees receive the sum assured with accumulated profits/bonus
on investments (till the time of his demise). In case the individual survives the tenure, he
receives the sum assured and accumulated profits/bonus.
If we take a 30-Yr individual who wants an endowment plan with a sum assured of
1,000,000 for 30-year tenure. The premium he will have to pay for the same is
approximately Rs 27,600. In case of an eventuality to the individual, his nominees will stand
to receive the said sum assured (i.e. Rs 1,000,000). In addition, they will also receive the
accumulated bonus if any. In case the individual survives the tenure, then he stands to
benefit to the tune of the maturity amount (and bonus additions).
Age Sum Annual Tenure Maturity CAGR Maturity CAGR

(Yrs) Assured Premium Amount (Rs) Amount (Rs)
(Rs) (Rs) (Yrs) (@ 6%) (%)* (@10%) (%)*
30 10,00,000 27,600 30 19,20,000 4.98 31,81,400 7.69
(* Calculated on annual premium)
Maturity benefits shown above are @ 6% and 10% as per Life Insurance Council guidelines.
Illustration based on an existing life insurance company’s endowment plan)

As can be seen, the maturity figures are arrived at assuming a growth rate of 6% and 10%
respectively. However, the growth rate is applied to the premium net of expenses i.e. after
deducting the expenses (on marketing, sales, administration) from the annual premium. The
effective compounded annual growth rate (CAGR) on the yearly premium works out to
approximately 4.98% (for the 6.00% figure i.e. Rs 1,920,000) and 7.69% (for the 10% figure
i.e. Rs 3,181,400).
It would be very difficult for the insurance company to provide a 10% CAGR return on
maturity. This is because conventional endowment plans traditionally invest a large portion
of the corpus in debt instruments like gsecs and bonds. And in a scenario where the costs in
32
the initial years on life insurance policies are high and debt instruments have not delivered
‘exceptional’ returns, it becomes difficult for the insurance company to deliver compounded
annual returns even close to 10%. According to various research results, the return on an
endowment plan over a 30-Yr period is around the 6.00% CAGR mark. Of course, this will
vary across endowment plans and insurance companies depending on their expenses and
investments.
Unit Linked Insurance Plans (ULIPs)
For the generation of insurance seekers who thrived on insurance policies with assured
returns issued by a single public sector enterprise, unit-linked insurance plans are a
revelation.
Traditionally insurance products have been associated with attractive returns coupled with
tax benefits. The returns part was often so compelling that insurance products competed with
investment products for a place in the investor's portfolio. Perhaps insurance policies then
were symbolic of the times when high interest rates and the absence of a rational risk-return
trade-off were the norms.
The subsequent softening of interest rates introduced a degree a much-needed rationality to

insurance products like endowment plans; attractive returns at low risk became a thing of the
past. The same period also coincided with an upturn in equity markets and the emergence of
a new breed of market-linked insurance products like ULIPs. While in conventional
insurance products the insurance component takes precedence over the savings component,
the opposite holds true for ULIPs.
More importantly ULIPs (powered by the presence of a large number of variants) offer
investors the opportunity to select a product which matches their risk profile; for example an
individual with a high risk appetite can shun traditional endowment plans (which invest
about 85% of their funds in the debt instruments) in favor of a ULIP which invests most of
its corpus in equities.
33
In traditional insurance products, the sum assured is the corner stone; in ULIPs premium
payments is the key component. ULIPs are remarkably alike to mutual funds in terms of
their structure and functioning; premium payments made are converted into units and a net
asset value (NAV) is declared for the same.
Investors have the choice of enhancing their insurance cover, modifying premium payments
and even opting for a distinct asset allocation than the one they originally opted for. This
calls for enhanced flexibility in ULIPs. Also if an unforeseen eventuality were to occur, in
case of traditional products, the sum assured is paid along with accumulated bonuses;
conversely in ULIPs, the insured is paid either the sum assured or corpus amount whichever
is higher.
Insurance seekers have never been exposed to this kind of flexibility in traditional insurance
products and it would be fair to say that ULIPs represent the new face of insurance. While
few would dispute the value-add that ULIPs can provide to one's insurance portfolio and
financial planning; the same is not without its flipside.
For the uninitiated, understanding the functioning of ULIPs can be quite a handful! The
presence of what seem to be relatively higher expenses, rigidly defined insurance and
investment components and the impact of markets on the corpus clearly make ULIPs a
complex proposition. Traditionally the insurance seeker's role was a passive one restricted to
making premium payments; ULIPs require greater participation from the insured.
Charges and Expenses
ULIPs work very similar to a mutual fund with an added benefit of life cover and tax
deduction. They have a mandate to invest the premiums in varying proportions in G-secs
(government securities), bonds, the money markets (call money) and equities. The primary
difference between conventional savings-based insurance plans like endowment and ULIPs
is the investment mandate- while ULIPs can invest up to 100% of the premium in equities,
the percentage is much lower (usually not more than 15%) in case of conventional insurance
plans. ULIPs are also available in multiple options like ‘aggressive’ ULIPs (which can invest
34
up to 100% in equities), ‘balanced’ ULIPs (which invest 40-60% in equities) and ‘debt’
ULIPs (which invest only in debt and money market instruments).
Broadly speaking, ULIP expenses are classified into three major categories:
1) Mortality charges
Life insurance companies for providing a life cover to the individual charge mortality
expenses. The expenses vary with the age, sum assured and sum-at-risk for the individual.
There is a direct relation between the mortality expenses and the above-mentioned factors.
In a ULIP, the sum-at-risk is an important reference point for the insurance company. The
sum-at-risk is the difference between the sum assured and the investment value the
individual’s corpus as on a specified date. Usually, the mortality charges are levied on the
per thousand sum assured.
2) Sales and Fund Administration expenses
Insurance companies incur these expenses for operational purposes on a regular basis. The
expenses are recovered from the premiums that individuals pay towards their insurance
policies. Agent commissions, sales and marketing expenses and the overhead costs incurred
to run the insurance business on a day-to-day basis are examples of such expenses.
3) Fund management charges (FMC)
The insurance company to meet the expenses incurred on managing the ULIP investments
levies these charges. A portion of ULIP premiums are invested in equities, bonds, g-secs and
money market instruments. Managing these investments incurs a fund management charge,
similar to what mutual funds incur on their investments. FMCs differ across investment
options like aggressive, balanced and debt ULIPs; usually a higher equity option translates
into higher FMC.
35
Apart from the three expense categories mentioned above, individuals may also have to
incur certain expenses, which are primarily ‘optional’ in nature- the expenses will be
incurred if certain choices that are made available to individuals are exercised.
a) Switching charges
Individuals are allowed to switch their ULIP options. For example, an individual can switch
his fund money from 100% equities to a balanced portfolio, which has say, 60% equities and
40% debt. However, the company may charge him a fee for ‘switching’. While most life
insurance companies allow a certain number of free switches annually, a switch made over
and above this number is charged.
b) Top-up charges
ULIPs allow individuals to invest a top-up amount. Top-up amount is paid in addition to the
premium amount for a particular year. Insurance companies usually deduct a certain
percentage from the top-up amount as charges. These charges are usually lower than the
regular charges that are deducted from the annual premium.
c) Cancellation charges
Life insurance companies levy cancellation charges if individuals decide to surrender their
policies before the mandated lock-in period, which is usually three years. These charges are
levied as a percentage of the fund value on a particular date.
The Compounded Annual Growth Rate (CAGR) of the fund goes up over a period of time.
This is because the ULIP expenses even out over a period of time. The ‘evening out’ occurs
because although the expenses are high in the initial years, they fall thereafter. And as the
years roll by, the expenses tend to ‘spread them’ more evenly over the tenure of the ULIP.
Another reason is also because the expenses are levied on the annual premium amount,
which stays the same throughout the tenure. Therefore, the expenses do not have any impact
on the returns generated by the corpus.
36
Fund management charges also have an effect on the returns. FMC is levied on the corpus,
which keeps fluctuating over the tenure.
The returns also depend to a large extent on how well the insurance company manages the
investment. Individuals therefore, need to bear in mind that expenses are an important
variable while evaluating ULIPs across life insurance companies. They have the potential to
make a considerable difference to the returns generated over a period of time.
COMPARISON OF HDFC STANDARD LIFE ULIP vis-à-vis OTHER

POPULAR ULIPS AVAILABLE IN INDIA
HDFC
Features Bajaj Allianz Standard life ICICI Prudential
Unit Link
Endowment
Policy Name Unit Gain Plan Life time gold
Age
Minimum age
at entry 0 18 0
Maximum age
at entry 60 65 65
Premium
Amount
(minimum)
37
Annual Rs.10000 10000 20000
Maximum
Assured Y times the annual prem. 40 times the
Amount depending on age annual prem.
Age Y
0-30 100
31-35 85
36-40 70
41-45 50
46-55 30
56-60 20
(term/2) times of
Minimum (Term of your the annual
Assured 0.5 times of the policy policy/2) times premium, sub. To
Amount term times or 5 times the the min. of 100000
annual premium
whichever is higher annual premium
Allocation rate Allocation rate Allocation rate

1st two 3rd 2nd
Regular & 1st 3rd &
Premium years onwards
allocation onwards
Upto 49999
50000 and 20% 7.5% 4%
above 18% 7.5% 4%
Unto 199999 95% 70% 99%
200000-499999 96% 80% 99%
500000-999999 96% 85% 99%
1000000- 97% 90% 99%
38
1999999
2000000 and
above 97% 95% 99%
Benefits
offered
Death Benefit Sum assured less sum assured less sum assured less
withdrawals/bid withdrawals/bid
withdrawals/bid price of price of price of
Units (the higher Units (the higher
Units (the higher one). one). one).
Before 7 and after
Before 7 and after 60, bid 70, bid
value of units value of units
Cash
withdrawal
option No maturity date No maturity date No maturity date
No penalty after No penalty after 3
No penalty after 3 years 3 years years
of lock-in of lock-in of lock-in
Minimum
partial
withdrawal
amount Rs.5000 Rs.10,000 Rs.2000
(at bid price)
Liquid fund-Risk profile-

low
Bond Fund-Risk profile- Flexi growth
Investment Moderate
Options liquid Fund Maximiser
Equity growth Fund –
Risk profile-very high Defensive
Managed Fund Protector
Equity Index Fund II-
Risk profile – high Balanced
Managed Fund Balancer
39
Accelerator Mid-cap
Fund-Risk profile-Very Equity Managed
high Fund Preserver
Growth Fund Flexi balancer

Tax Benefits
Save up to Rs.33660 Save up to Save up to
Sec 80(c) each Rs.33660 each Rs.33660 each
year as prem. Up to year as prem. Up year as prem. Up
Rs.100000 to Rs.100000 to Rs.100000
are allowed as a are allowed as a are allowed as a
deduction deduction deduction
Benefits are tax Benefits are tax
Sec 10(10(d)) Benefits are tax free free free
Charges
Annual
Mortality Depending on Charged per
charges Charged per Rs.1000 of your age Rs.1000 of
charged every sum assured on
sum assured on age basis month age basis
1.25% p.a. of NA1.75%

p.a. of NAV for Equity
Growth Fund & 2.25% p.a. for
Accelerator mid- flexi growth,
cap;1.25% p.a. of NAV maximiser, flexi
for Equity index fund II; balancer,
Annual 0.95% p.a. of NAV for balancer;1.5% for
Administration bond fund and liquid protector; 0.75%
charges fund. Rs.20 per month for preserver
No. of free
switches
annually 3 24 4
40
Charges for
additional Rs.100 per
switches Rs.100 / 5% of switch switch amount Rs.100
Amount (lower of two)
Minimum
Switch amount Rs.5000 or Fund value no limit Rs.10000
(lower)
Minimum Top- 97.5(1st 2years)

up premium 98% 99%(onwards) Rs.1000
Allocation 99%
Flexibility
To increase
Assured every 3rd year up
amount available available to
3 times. Quantum
of
Increase would be
25%of sum
assured/
Rs. 100000.
(lower)
100% penalty on
partial or full
100 % penalty on partial withdrawal Surrender Value as
or full withdrawal before before % of fund value
Cancellation or completion of first three completion of after completion
surrender years first three years of 3 policy years:
Charges 3 Years – 98%
4 Years - 99 %
5 Years or more
-100 %
41
42
DATA ANALYSIS
 Awareness of ULIP:
Unit Linked Insurance Plans have emerged in the Indian market only a few years ago. The
market gained momentum only after the private insurers came in with a variety of
innovative market linked insurance cum investment plans. The popularity of ULIP is lower
as compared to other investment avenues. With the softening of interest rates, traditional
investment products have become less popular and more investors are being attracted
towards stock market and Mutual Funds. Almost all the respondents across categories have
taken term or endowment insurance but there are only a few who have taken a ULIP. This
may be attributed to lower awareness level. Many respondents specifically indicated that
they do not have any idea about a ULIP plan.
As far as insurance in concerned, most of the respondents were tilted in their opinions
towards the Life Insurance Corporation’s policies. In life insurance business, more than 70
% of the market is acquired by the LIC. As it is a Public Sector Enterprise, people have more
faith in it. But slowly, the psyche of people is changing as more and more private players are
coming up with innovative and affordable plans. Last year, Bajaj Allianz had the maximum
market share among the private life insurers in terms of new premiums paid.
Although LIC have also come up with its ULIP policy but people are more interested in
buying ULIPs from private players because of their higher and steady returns. The Bajaj
Allianz Unit Gain- Equity Gain Plan has given the highest Compounded Annual Growth
Rate of return of 64.03 % since inception.
In the 18-25 age groups, people were found to be very aggressive in their investment pattern.
Awareness level for ULIPs was found to be minimal in this group. People in the age group
26-40 were found to be having a greater awareness level.
43
Table: Investment in different categories by individuals of age (18-25)
Investment Areas Persons invested (in %)

FDs and other bank deposits 26
ULIPs 5
Govt. bonds 9
Gold/Bullion mkt. 0
Stock Market 23
Mutual Funds 23
Real Estate 14
100
 Popular Investment Avenues –
Interpretation
Under the age of the 18-25 persons interested in the fixed deposit. Because in this interest
rate is fix.
44
ULIPs 17
Govt. bonds 17
Gold/Bullion mkt. 7
Stock Market 13
Mutual Funds 15
Real Estate 4
100
Interpretation
Under the age of 26-40 out of 100 the 27 percent invested in the FDs , 4 percent invested in
the Real estate , 15 percent invested in the Mutual Funds , 13 percent invested in the stock
market ,7 percent invested in the gold, 17 percent in the GOVT.bonds and rest of 17 percent
in ULIPs.

ULIPs 7
Govt. bonds 22
45
Gold/Bullion mkt. 4
Stock Market 18
Mutual Funds 16
Real Estate 9
100
Interpretation
Under the age of 41-55 out of 100 the 24 percent invested in the FDs , 9 percent invested in
the Real estate , 16 percent invested in the Mutual Funds , 18 percent invested in the stock
market ,4 percent invested in the gold, 22 percent in the GOVT.bonds and rest of 7 percent
in ULIPs.

ULIPs 5
Govt. bonds 14
Gold/Bullion mkt. 0
Stock Market 27
Mutual Funds 27
Real Estate 9
100
46
Intrepretation
Bank Fixed Deposits are the preferred choice of investors because of guaranteed returns.
People invest in Gold & Silver unknowingly. Most of the Indian investors do not take it as
an investment as most of the investment is in the form of jewellery and not as coins or bars.
Mutual Funds are catching the fancy of investors now a day. With Indian bourses touching
newer peaks, more people are getting attracted towards the stock market.
Table: Importance of various parameters for investor (age: 18-25)
Parameter Persons in number Persons in %

Very imp Somewhat Not imp Very imp Somewhat Not imp
imp imp
Safety of 13 1 1 88 6 6
capital
Life cover 7 4 4 48 26 26
Tax 9 3 3 60 20 20
efficiency
Flexibility 7 5 0 58 42 0
Regular 3 10 2 20 68 12
47
income
important paremeter
100%
90%
80%
70%
person %
60%
Not imp
50% Somewhat imp
Very imp
40%
30%
20%
10%
0%
Safety of capital Life cover Tax efficiency Flexibility Regular income
paremeter
Interpretation
 Under the age of 18-25 out 100 people 88 percent says that safety of capital is
important ,6 percent says some what important, 6 percent says not important.
 48 percent says that life cover is important , 26 percent says some what important,
26 percent says not important.
 60 out of 100 says that tax efficiency is very important , 20 percent says that some
what important , 20 percent says that not important.
 58 out of 100 says that flexibility is very important , 42 says that some what
important, 0 percent says that not important .
 20 out of 100 says that regular income is very important, 68 says that some what
important,12 says that not important .
48
Table: Importance of various parameters for investors (age: 26-40)

imp imp
Safety of 19 6 0 76 24 0
capital
Life cover 11 12 2 44 48 8
Tax 12 11 2 48 44 8
efficiency
Regular 13 8 4 52 32 16
income
49
Interpretation
 Under the age of 26-40 out of 100 76says that safety of capital is very important,24
says that some what important,0 percent says that not important
 44percent says that life cover is important , 48percent says some what important,
8percent says not important.
 48out of 100 says that tax efficiency is very important,44 percent says that some
 36 out of 100 says that flexibility is very important , 52 percent says that some what
important, 12 percent says that not important.
 52 out of 100 says that regular income is very important , 32 percent says that some
what important , 16percent says that not important .
50

imp imp
Safety of 17 2 0 89 11 0
capital
Life cover 8 8 3 42 42 16
Tax 14 5 0 74 26 0
efficiency
Regular 9 5 5 48 26 26
income
51
Interpretation
 Under the age of 41-55 out of 100 the 89 percent says that safety of capital is
very important , 11 percent says that some what important , 0 percent says that
not important .
 42 out of 100 says that life cover is very important, 42 percent says that some
what important , 16 percent says that not important .
 74 out of 100 says that tax efficiency is very important, 26 percent says that some
 58 out of 100 says that flexibility is very important, 37 percent says that some
what important, 5 percent says that not important .
 48 out of 100 says that regular income is very important, 26 says that some what
important, 26 says that not important.
52

imp imp
Safety of 4 0 1 80 0 20
capital
Life cover 1 3 1 20 60 20
Tax 2 2 1 40 40 20
efficiency
Regular 5 0 0 100 0 0
income
53
Interpretation
Safety of capital is the most important parameter across categories. Everybody wants his or
her investment to be safe. The increasing popularity of Mutual Funds is the result of the
changing psyche of Indian investors. The recent correction in the major stock indices, viz.
SENSEX and NIFTY virtually put a break on the ongoing Bull Run.
While it is evident that getting a life cover and tax efficiency are the important parameters
for people in the age groups 18-25 and 26-40, the flexibility part is not of much importance
to this age group.
With increase in age more and more people opt for investment plans ensuring regular
income.
54
The most potent group of customers for selling the ULIP policies is the people in the age
group 26-40 as this is the time when people become mature enough to think of getting a life
cover as they get married and start their second phase of life.
Business class people and working are also potential group of customers as they have more
savings to contribute towards their ULIP plans as compared to the salaried men.
Persons having no financial dependents who have just started earning can also be a potential
group as they have surplus money to invest, less financial liabilities and greater expectations
from their investments.
Persons having a monthly household income more than Rs.25K with 1 or 2 dependents are
potential customers for ULIPs.
 Customer’s Expectations –
Table: Customers Expectation (0 Dependents)
Exp. Rate of return Persons in%

<7% 9
7-15% 9
16-25% 32
>25% 50
55
Interpretation
Under this stage when there are no dependent then their expectations less then 7 percent are
only 9 people. 7 to 15 only 9 percent , 16 to 25 only 32 percent above 25 there are 50
percent people .
Table: Customers Expectation (age: 18-25)

<7% 0
7-15% 7
16-25% 46
>25% 47
56
Interpretation
Under the age of 18-25 the expectation of less then 7 percent were only 0 percent, 7-
15percent only 7 people , 16-25 percent 46 people, above 25 percent 47 people.

<7% 8
7-15% 20
16-25% 20
>25% 52
57
Interpretation
Under the age of 26-40 exp.rate of return less then 7 percent only 8 people, 7-15 percent 20
people , 16-25 percent 20 people, above 25 percent 52 people.

<7% 0
7-15% 16
16-25% 42
>25% 42
58
Interpretation
Under the age of 41-55 the returns expected less then 7 percent 0 people , 7-15 percent 11
people , 16-25 percent 42 people , above 25 percent 42 people .
Table: Customers Expectation (Business Class)

<7% 0
7-15% 11
16-25% 39
>25% 50
59
Interpretation
Under the business class returns expected less then 7 percent 0 people, 7-15
percent 11 people, 16-25 percent 39 people , above 25 percent there are 50.
Table: Customers Expectation (Salaried Class)

<7% 0
7-15% 31
16-25% 24
>25% 45
60
Interpretation
As far as expectation of returns is concerned, people in the age group 18-25, 26-40 is found
to be more demanding than the people in higher age groups. Business class people expect
more from their investments than salaried men and women.
There is definitely a correlation between the returns expected and investment style of
investors. This is evident from the fact that people who expect greater returns opt for either
equity plans or growth plans.
Risk averse persons can opt for the balanced funds of ULIPs as they offer fair enough
returns. Bajaj Allianz ULIPs are available in five fund categories where the investors may
opt to invest. These are Equity, Debt, Growth, Balanced and Exchange Traded Funds
(ETFs).
Findings:
From market survey, we find the following problem an investor face while investing money
in different financial products:
 Investors are not fully aware about investment product i.e. ULIPs. They are not fully
aware about how to invest and when they should invest in ULIPs and in which plan
of ULIPs.
61
 Mostly investors are not aware about terms, conditions, and different plans of ULIPs
and full procedures of how it works.
 Mostly Investors are found incapable in differentiating in their insurance and
investment needs due to lack of knowledge.
 Mostly investors found themselves incapable in taking decision regarding where they
should invest and in differentiating the different investment plans. So they are not
able to grap the opportunities available with the investment plans.
 Even mostly investors do not know how they should make their investment plan.
62
RECOMMENDATIONS
 Ideally, there should be an oriented investment strategy for an investor depending

upon his age, profession, and number of dependents, risk profile and his
expectations. We have identified six areas that are of interest to every investor across
categories. The weight age given to these parameters by different individuals may
vary.
 Every individual should do insurance planning. Life Insurance cover should be taken
when young and the person is able to service the premiums. The amount of coverage
depends on the requirements.
 People in the age group 18-25 may opt for Equity funds or Exchange traded funds of
ULIPs when they are bullish for the stock market and otherwise they can earn a
handsome return from growth plans. People in the age group 26-40 may go for
balanced funds of ULIP plan that gives a decent return. For others, debt funds may
give a good return in addition to the benefits of traditional life insurance plans, like
tax benefits.
 Ideally, individuals should look at separating their insurance and investment needs.
One way of doing this is by buying a term a ULIP insurance plan and devote the
remaining ‘investible surplus’ in other comparable avenues like mutual funds or even
PPF/NSCs. Unit linked insurance plans (ULIPs) with their mandate of investing up
to 100% of their corpus in equities may be considered as they offer greater flexibility
as compared to their traditional endowment counterparts.
 The next requirement for earning individuals is working out an effective plan for
minimizing their tax outgo. Insurance Plans offer tax benefits under section 80C of
the Income Tax Act. Moreover the withdrawals at maturity in select insurance plans
are exempt from tax under section 10(10D) of the IT Act. The current Income tax
regime suggests that individuals can claim tax exemption up to Rs.100, 000 under
63
section 80C against selected investments. Life insurance premium payment can be
claimed against such exemption up to the prescribed limits. Hence a person can save
tax of Rs.33, 660 annually if they invest Rs.100, 000 annually in Unit Linked
Insurance Plans or any life insurance plans.
 Planning for Children’s Education – Investors should start investing as early as

possible for their child’s bright career. They can invest into Child Gain plan, which
invests its corpus into securities earning handsome returns. Depending on the
selected plan, investors may opt for money back Unit linked plan for their children
that pay back money at select intervals. This money can be taken at the age of 21 or
24 when the child needs it for his higher education.
 Planning for Special Occasions – ULIPs offer great flexibility as against their
traditional counterparts. Investors may withdraw money from their funds in part or
full for meeting their immediate requirement of special occasions like their children’s
Insurance
marriage. Planning
 Planning to cope-up with inflation – Money kept idle in safe gets devalued because
of inflation. Investors should ideally look for avenues where their money can get
Planning to
cope up The
multiplied. with power of compounding at appropriate rate of return may give
Tax Planning
Inflation
astounding returns. Investors should carefully monitor their investment portfolio.
Risk-averse investors may go for Balanced or Debt funds of selected Mutual Funds.
Investment
 Strategy
Retirement Planning – Finally, every individual should plan for his golden years. He
For
may opt for Unit linked pension plans
ULIPthat offer monthly pensions after retirement.
For getting a decent amount as pension, investors should start investing in these
plans as early as possible to build up a decent corpus in their fund.
Planning for
Retirement
Children’s
Planning
Education
Planning for
Special
Occasions
64
Selecting the right ULIP
For a product capable of adding significant value to investors' portfolios, ULIPs have far too
many critics. A 4-step investment strategy is presented that may be taken as a guide to
investors in the selection process and enable them to choose the right ULIP.
1. Understanding the concept of ULIPs
Before investing in a ULIP, investors should know as to what is the scheme all about and
how will the money get invested. This way he will be fully aware of what he is getting into
and make an informed decision.
More importantly, it will ensure that the investor is not faced with any unpleasant surprises
at a later stage. Gathering information on ULIPs, the various options available and
understanding their working is essential.
2. Focusing on the needs and risk profile
The investors should identify a plan that is best suited for them (in terms of allocation of
money between equity and debt instruments) according to their risk appetite. A person
having a high-risk appetite should go for an aggressive investment option with a higher
equity component, which is likely to be more suited. Similarly the existing investment
portfolio and the equity-debt allocation therein also needs to be given due importance before
selecting a plan.
65
Opting for a plan that is lop-sided in favor of equities, only with the objective of clocking
attractive returns can and does spell disaster in most cases. Our market research shows that
young investors expect a lot. In the survey, 52 % of the respondents in the age group of 26-
40 years indicated that they expect more than 25% return from their investments in the next
five years as against 42 % of respondents in the age group 41-55 who indicated a similar
wish.
3. Comparing ULIP products of various insurance companies
Investors must compare products offered by various insurance companies on parameters like
expenses, premium payments and performance among others. For instance, information on
premium payments will help getting a better picture of the minimum outlay since ULIPs
work on premium payments as opposed to sum assured in the case of conventional insurance
products.
Moreover, the investors should also compare the ULIPs' performance i.e. how the debt,
equity and balanced schemes are performing; and what constitutes the portfolios of various
plans. Expenses are a significant factor in ULIPs; hence an assessment on this parameter is
warranted as well.
Other information that should be searched out before subscribing to a policy is about the
top-up facility offered by ULIPs i.e. additional lump sum investments which can be made to
enhance the policy's savings portion. This option enables policyholders to increase the
premium amounts, thereby providing presenting an opportunity to gainfully invest any
surplus funds available.
Additionally the investors should look out the number of times free switches are permitted
(i.e. change the asset allocation of the ULIP account) from one investment plan to another.
Some insurance companies offer multiple free switches every year while others do so only
after the completion of a stipulated period.
66
4. Ensuring whether the selected ULIP offer a minimum guarantee
In a market-linked product, protecting the investment's downside can be a huge advantage.

The investors should find out if the ULIP under consideration offers a minimum guarantee
and what costs have to be borne for the same.
The past couple of years have seen ULIPs (unit linked insurance plans) emerge as
overwhelming favorites with individuals wanting to buy life cover complemented by a
flavor of equities. The appreciating Indian bourses too have played a part in fuelling the
demand for ULIPs.
More importantly, the investors should make a point to get the information regarding the
percentage of the fund that gets invested into equities. ULIPs are life insurance plans, which
can invest a portion of their corpus in equities. The percentage of investments in equities
though differs across insurance companies. While some companies have a mandate to invest
up to 100% of their corpus in the ‘aggressive’ option, other insurance companies have a cap
(like 35% of corpus for instance) on the ‘aggressive’ option. Given the edge equities can
provide to one’s portfolio, the percentage of equities in a ULIP can make a significant
impact on the returns over the long term.
FIVE STEP INVESTMENT PLAN

Investing is a science, not an art; we suggest a five-stage investment plan that may be
practiced by investors looking for multiplying their hard-earned money.
 Need Analysis and Profiling

 Internalizing and Evaluating the Available Avenues
 Mapping and Matching the Profile
 Designing an Optimum Portfolio
 Continuous Monitoring and Portfolio Management
The first step is performing a Need Analysis check. The requirements and expectations of
the investor should be determined. The needs should be separated from the desires. The facts
67
that should be taken into account are their age, their profession, the number of dependents,
and their income. By doing this check, the risk profile of the investor should me designed.
The next step would be internalizing the needs. Various investment avenues should be
analyzed. The risk-return profile of investment products is evaluated in this step. Every
investment product varies according to its return potential and riskiness. Investment
products giving a high rate of return are generally risky and volatile. The products giving a
lower rate of return usually are less risky. Therefore all the available avenues should be
evaluated.
The next step would be mapping the risk-return profile of the investor on to the investment
portfolio. The investment products are matched with the risk-return profile of the investor.
All the investment alternatives that offer expected rate of return are selected for
consideration.
Then an optimum portfolio is designed for the investor. The basket of investment avenues
selected in the previous step is given due weight age and appropriate amount of money is
Continuous Need
invested in each Monitoring
of the investment avenue so as to get maximum
Analysisreturn with minimum
possible risk. and Portfolio and
Managemen Profiling
t
Finally a continuous watch on the portfolio is extremely important. Fundamental analysis of
the investment products done in the previous stages would only help in selecting the right
product but the right time of entry or exit from a particular stream is evaluated by doing a
technical analysis. For this professional portfolio management is a must.
FIVE STEP
INVESTMENT
Designing PLAN Internalizing
an and
Optimum Evaluating
Portfolio the Available
Avenues
Mapping and
Matching
68 the
Profile
CONCLUSION :
 Saving Account is a facility to promote the habit of saving. Saving Account is a type
of facility that is provided by all banks. It is a convenient, affordable and easy way to
save money. Any individual can open account in any bank according to its norms.
Banks provides a minimal rate of return on these deposits. It is a safe mode also
because Reserve Bank of India controls all the banks.
 Saving account can be opened individually or jointly. It can be opened with a
minimum balance of Rs.10000.chaque book, debit /ATM card facility, net and phone
banking facilities, statement etc. many facilities are provided by banks to saving
account holders.
 Saving Accounts have some drawbacks also. On saving account, the interest rate is
very low. As interest rate is 2% to 4%, which is less than inflation rate. So depositor
gets less money in real money term. In saving account, condition of minimum
balance is also a constraint.
 The Unit Linked Insurance Plans are professionally managed investment plans. ULIP
provides life insurance and at the same time provides suitable investment avenues.
The policy value is the sum assured plus the appreciation of the underlying assets. It
is life insurance solution that provides for the benefits of protection and capital
appreciation at the same time. The product is quite similar to a mutual fund in the
sense that the investment is denoted as units and is represented by the value that it
69
has attained called as Net Asset Value (NAV), and apart from the insurance benefit
the structure and functioning of ULIP is exactly like a mutual fund.
 The idea of having insurance and investment conveniently rolled into one-product
looks alluring enough and saves the common investor the time and effort to consider
different options. However, an investor may build a customized solution for himself
separating insurance from his investment needs.
 In the case of ULIP, the insurance company deducts charges towards life insurance
cover (mortality charges), administration charges and fund management charges
from the premium paid by the investor. The balance amount left is used to invest in
stocks or bonds or a combination of the two. All premiums paid are eligible for tax
break under Sec 88 and come under a lock-in of three years.
 This acts as a dampener as the returns are affected due to lower levels of funds
available for investment, and extra cautious approach by the insurance company
towards investing doesn’t help either.
 The leading insurance companies do disclose their portfolio on a regular basis, the
competitive pressure in the mutual funds industry lead to higher disclosures and
investors know exactly where there money is being invested.
 ULIPs offer a better preposition in terms of returns to investors over traditional
insurance plans. They cover life and over and above that they help in growing in the
money of investors. It is always good that investors start early and select the right
insurance-cum-investment plan for themselves and utilize their tax break limit fully.
70
Bibliography:
Books
 Kotler Philip – Principle of Marketing Management, Ninth Edition.
 Tull Donald S. & Hawkins Dell, Marketing Research Measurement and Methods, 6 th
Edition, pp 330,35
Magazines
 Data pamphlets collected from different banks
 How ULIPs fit in, Money simplified, personalfn, edition: Feb. 2009
Website
 www.hdfcinsurance.com
 www.icicipru.com
 www.bajajallianz.com
 www.abnamro.com
 www.kotak.com
 www.hdfcbank.com
71
Annexure:
Questionnaire:
 NAME: - ____________________________________________________
 BELONGS TO: - ______________


 AGE:- [ ] 18-25 [ ] 26-40 [ ] 41-55 [ ] ABOVE 55
 MARITAL STATUS:- [ ] SINGLE [ ] MARRIED
 NO. OF DEPENDENTS:-[ ]NIL [ ]1- 2 [ ]2-5 [ ]ABOVE 5
 OCCUPATION:- [ ] STUDENT [ ] BUSINESS CLASS

[ ] PROFESSIONAL [ ] SERVICE PERSON
 ANNUAL INCOME:- [ ] LESS THAN 100000 [ ] 100000-500000

[ ] ABOVE 500000
 DO YOU INVEST SOMEWHERE?:- [ ]YES [ ]NO
 IF YES,YOU HAVE CURRENTLY INVESTMENTS IN:-

[ ] ULIPs
[ ] MUTUAL FUND
[ ] SHARES
[ ] FD & BANK DEPOSITS
[ ] GOVERNMENT BONDS
[ ] GOLD/SILVER
72
[ ] REAL ESTATE
 WHETHER TERMS OF YOUR INVESTMENT ARE TRANSPERENT AND

FLEXIBLE?:- [ ] YES [ ] NO
 HOW MUCH RETURN YOU EXPECT FROM YOUR INVESTMENT?:-

[ ] LESS THAN 7% [ ] 7%-15% [ ]16%-25% [ ] ABOVE 25%
 IMPORTANCE OF PARAMETER FOR INVESTMENT FOR YOU:-
1. SAFETY OF CAPTIAL [ ] VERY IMP [ ] SOMEWHAT IMP

[ ] NOT IMP
2. LIFE COVER [ ] VERY IMP [ ] SOMEWHAT IMP

[ ] NOT IMP
3. TAX EFFICE [ ] VERY IMP [ ] SOMEWHAT IMP
[ ] NOT IMP
4. FLEXIBILITY [ ] VERY IMP [ ] SOMEWHAT IMP
[ ] NOT IMP
5. REGULAR INCO [ ] VERY IMP [ ] SOMEWHAT IMP
[ ] NOT IMP
(THANKS FOR YOUR KIND AND VALUABLE RESPONSE)
73

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SUMMER INTERNSHIP PROJECT REPORT

(SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF

Submitted to: - Submitted by:

VAISH COLLEGE OF ENGINEERING, ROHTAK

“INVESTMENT STRATEGIES IN SAVING ACCOUNT & ULIPS”

in partial fulfillment of the requirements for the award of the Degree of

Univ. Registration No.-03-my-1182

TIMES BANK AMALGAMATION

Few facts About HDFC BANK:

 Best Bank in India 2019, by Global magazine Finance Asia.

$20.87 billion in 2018 to $22.70 billion in 2019.

HDFC BANK PREFERRED

This is a preferential banking service through which customer is assigned a dedicated

Innovative services for the customer convenience . . .

INTERCITY / INTERBRANCH BANKING

ATM 24-HOUR BANKING

SAFE DEPOSIT LOCKERS

Loans for every need . . .

LOANS AGAINST SHARES

 Simplicity: Investment instruments are complex, but investors need to understand

 Mutual Funds - There is a collection of investors in Mutual funds that have

SAMPLING AND SAMPLING DESIGN

The sampling procedure to be followed is as follows:

An Insight to Life Insurance –

Endowment plans: Safety with life insurance –

Age Sum Annual Tenure Maturity CAGR Maturity CAGR

Illustration based on an existing life insurance company’s endowment plan)

Unit Linked Insurance Plans (ULIPs)

The subsequent softening of interest rates introduced a degree a much-needed rationality to

Charges and Expenses

2) Sales and Fund Administration expenses

3) Fund management charges (FMC)

COMPARISON OF HDFC STANDARD LIFE ULIP vis-à-vis OTHER

Allocation rate Allocation rate Allocation rate

Liquid fund-Risk profile-

Growth Fund Flexi balancer

1.25% p.a. of NA1.75%

Minimum Top- 97.5(1st 2years)

Investment Areas Persons invested (in %)

 Popular Investment Avenues –

Table: Investment in different categories by individuals of age (26-40)

Investment Areas Persons invested (in %)

Table: Investment in different categories by individuals of age (41-55)

Investment Areas Persons invested (in %)

Table: Investment in different categories by individuals of age (55-65)

Investment Areas Persons invested (in %)

Table: Importance of various parameters for investor (age: 18-25)

Parameter Persons in number Persons in %

Parameter Persons in number Persons in %

Parameter Persons in number Persons in %

Parameter Persons in number Persons in %

Table: Customers Expectation (0 Dependents)

Exp. Rate of return Persons in%

Table: Customers Expectation (age: 18-25)

Exp. Rate of return Persons in%

Table: Customers Expectation (age: 26-40)

Table: Customers Expectation (age: 41-55)

Table: Customers Expectation (Business Class)