Financial Sectors

~Deepika Bhati
 Financial sectors are the platforms where In-
bound & Out-bound transactions take place.
Individual - Insurance company - other institution

 There are 8 types of financial sectors:

1) Bank
2) Real estate
3) Post offices
4) Provident funds
5) Share market
6) Mutual funds
7) Insurance
8) Gold
 Real Mutual
Banks Estate Funds

Post Provident
Offices Funds

Share
Marke Insurance Gold
t
Bank
Regulatory body: Reserve Bank of India
 A bank is a financial institution that accepts deposits from the
public and creates a demand deposit while simultaneously making
loans.
Pros & Cons
1. Tax benefits 1. Liquidity isn’t
2. Digitally accessible easy
3. Lump sum benefit 2. Funds are locked
4. Fixed rate of 3. Can’t beat
interest inflation
5. Zero risk 4. Low gains if low
rates
5. Penalties over pre
maturity
withdrawls
Real Estate
Regulatory Body:
Real estate regulatory
authority
 Real estate is the buying and
selling of land and buildings.
 Real Estate Business means
homebuilding, housing
construction, real estate
(including masterplan)
development or construction and
the sale of homes, land and
related real estate activities,
including the provision of
mortgage financing, realty
brokerage, title insurance etc.
Pros & Cons
1. Value grows over 1. No tax benefit
time 2. Maintenance cost
2. Safe & secured 3. Risk of acquisition
3. Sense of belonging 4. Huge capital
4. Passive income required
5. Good capital gain 5. Long
process:stamp
duties
Post Offices
Regulatory Body: Reserve Bank of India
 The post office offers a number of savings plans,
including Recurring Deposit Account, Sukanya
Samriddhi Account (SSA), National Savings Certificates
(NSC), Kisan Vikas Patra (KVP), Public Provident
Fund, Savings bank account, Monthly-income plans,
Senior-citizens' savings plans and Time deposit
accounts.
 They were created to meet the financial needs of rural
people in india as banks were not available throughout
the country.
Pros & Cons
1. Risk free Unfriendly staff
2. Easily accessible No digitalisation

3. Safe,secured, Delay in transaction

trustable Can’t beat inflation
4. Generates habit Pre maturity
savings withdrawl charges
5. High rate
compared to
banks
Provident Funds
Regulatory Body: Central Govt.
Pros & Cons
1. Fixed returns 1. Long tenure
2. Tax benefits 2. Locked period
3. Retirement 3. Pre maturity
planning withdrawl charges
4. Low volatile, safe
5. Low risk
Share Market
Regulatory Body: Securities Exchange Board of
India
Pros & Cons
Buy any time Broker charges
Passive income Risksinvolved-
Ownership in Fraud
company Time consuming
Ability to vote on Lack of knowledge
decisions 30% tax to be paid
Long term wealth
creation
Mutual Funds
Regulatory Body:
Securities Exchange
Board of India
 A mutual fund is an
investment fund that
pools money from many
investors to purchase
securities.
Pros & Cons
1. Diversifying risks 1. Commission
2. Affordable & safe charges
3. Fair prices 2. Locked period
4. Freedom of 3. Tax inefficiency
withdrawl 4. Poor trade
5. Less knowledge executions
required 5. Lack of
transparency
 Insurance
 Regulatory Body:
Insurance Regulatory &
Development Authority of
India
 Insurance is a means of
protection from financial loss in
which, in exchange for a fee, a
party agrees to compensate
another party in the event of a
certain loss, damage, or injury.
It is a form of risk management,
primarily used to hedge against
the risk of a contingent or
uncertain loss.
Pros & Cons
1. Transfer liability 1. Frozen periods
2. Tax benefit 2. Unprofessional
3. Death benefit agents
4. Inflation covered 3. Low returns
5. Low volatile 4. Not for all
5. Some part non-
guaranteed
Gold
IBJA: Indian Bullion Jewellers Association
 Invests in various forms of gold. It can be in the form of physical gold or stocks of
gold mining companies. Gold funds which invest in physical gold offer investors the
convenience of buying pure gold at low cost.
 How to invest in gold?
Pros & Cons
1. Safe 1. Storage issues
2. Status symbol 2. May get stolen too
3. Easy to invest & 3. Not a good short
understand term investment
4. Inflation hedge 4. Buy & sell entire
5. Fashionable unit
5. Transportation
issues
“Invest for the long haul. Don't get too greedy
and don't get too scared.”

Thank you