New Issue Market
Submitted to: Rutvi Mam
Submitted by: Ashish Sakariya
Non-security form of investment
In India, the household sector's investment in non-security forms
constitutes a major proportion of its total investment in financial assets.
New Issue Market
There are
a large number of non-security forms of financial assets that
are available to investors in India. These are more in the nature of
savings of individuals and households, particularly for the benefit of
small savers. These investments are guided more by conveniences
safety and tax benefits rather than a strong desire to earn a very
attractive rate of return.
Cont….
Non security forms of Investment
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National Saving Scheme (NSS)
National
Saving Certificate (NSC)
New Issue Market
Insurance plans
Post office small saving scheme
Corporate fixed Deposits
Units Schemes of UTI
National Saving Scheme
• NSS offers an assured return & tax rebates
under sec. 88 of the Income Tax Act 1961.
Issue Market
• NSSNewunits
are issued with the minimum
investment being 100 Rs.
• This scheme offers the coupon rate of 9%
p.a.
• Time duration for this scheme 4 years & no
premature withdrawal facility except in the
case of death of the holder.
New Issue Market
National Saving Certificate
• It is also an under sec. 88 of the Income Tax
Act,1961 for tax rebates.
Issue Market
• ThisNew
forms
are available at all post office.
• This scheme offers the coupon rate of 9.5%
p.a.
• Time duration for this scheme is 6 years.
• Payment of purchase of NSC can be made by
either cash or cheque.
Types of NSC
• Single holder type Certificate
This certificate can be issued to
•New
1. Issue
an adult
himself or on behalf of the minor
Market
• 2. A Trust
• Joint ‘A’ type Certificate
• This can be issued to the two adults payable to
both holders jointly or to the survivor.
• Joint ‘B’ type Certificate
• This can be issued to the two adults payable to
both holders either or the survivor.
Insurance Plans
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Children plans
Whole life plans
New Issue Market
Money back plans
Plans for handicapped
Endowment Assurance plans
Life plan
Pension plans
Units plans
Post office small savings schemes
1) Kisan Vikas Patras (KVP)
* This instrument can be obtained in
New Issue Market
denominations of Rs. 1000, 5000 &
10000.
* The maturity period is 5 to 12 years but
in this premature encashment is
possible.
* The interest payable is on KVP is
compounded annually but its taxable
New Issue Market
2) Post office Recurring Deposits
* The scheme covers free life insurance
New Issue Market
cover
after receiving contribution for the 2
years on a/c of denomination of Rs 5, Rs
10, Rs 15 & Rs 20.
* In the event of death of the depositor after a
minimum period of 2 years, from the date of
opening a/c the heir or nominee will get the
full maturity value of the a/c.
3) Post office Saving Account
• It can be opened minimum of Rs. 200 but
previously it opened of Rs. 50 & maximum of
New Issue Market
Rs. 100000 for an individual.
• For the joint a/c the upper limit is Rs. 200000
but there is no limit for the group.
• Withdrawal from the a/c is by cheque.
• The interest is tax free & is 0.5% more than
that offered on saving bank a/c by
commercial bank.
4) Post office time deposit
* A time deposit is an investment option that
pays annual interest rates compounded
New Issue Market
quarterly
& is available through post office.
* They are suitable for capital appreciation that
money grows at a pre-determined rate.
* So, time deposits are one of the better ways
to get a relatively high interest rate for
saving.
* They are bound for some specific period of
time.
5) Post office Monthly Income Scheme
* The MIS provides for monthly payment
New Issue Market
of interest
income to investor.
* Investor who want to invest a lump sum
amount initially & earn interest on a
monthly basis for their livelyhood.
* This scheme have been very popular in
view of tax benefits & also it’s a boon
for retired persons.
Corporate fixed Deposits
1) Private Corporate Sector
*
The rate of saving of the PCS also shows steadily increase
New Issue Market
*
Year
Rate of saving
1950
1%
1980
1.80%
1990
3.70%
2005
4.80%
During the period of 1999 – 2000 to 2004 – 2005 non financial
companies on an average accounted for about 85 % of gross
saving of the investor.
2) Public Sector
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The rate of saving of the public sector, which an increasing trend till
1970s, started declining then after & turned negative since 1998 – 1999.
Market
TheNew
rateIssue
of public
sector saving is currently going more than 6 % but
the previous year rate are as under
Year
Rate of saving
2003 - 04
1%
2004 - 05
2.20%
Units Schemes of UTI
• The units of the Unit Trust of India provide investment
facilities to small investors for giving them a good current
income and also capital appreciation. The UTI is
required by law to distribute not less than 90% of its
New Issue Market
income. Individuals, companies, corporate bodies, etc.
through direct agency, bank or post offices can open
accounts. Investments in units enjoy tax benefits. Units
can be considered as a channel of investment on a very
moderate scale. So long as the special tax concession is
available, it is attractive to high-income investors.
– Unit-linked Insurance Plan (1971)
– Reinvestment Plan (1966)
– Unit scheme (1964)
– Children Gift Growth Fund, 1986
The interest of this scheme is near about 12 to 12.5% p.a.
New Issue Market