2

• Children’s • Maintaining
• • Children’
Vehicle education lifestyle
• Contingency • Home s
• Medical
fund • Contingen marriage
• Contingency fund
cy • Contingency
fund fund
fund
Early Career Mid Career Prime Career Post
(23-35 years) (36-50 years) (51-60 Retirement
years) (61-90 years)

3
 Balance today’s needs with your goals for the future
 Adapt change in your circumstances and needs
 Save money you need to achieve your goals
 Prepare for unexpected emergencies
 Prepare for retirement
 Manage your taxes
 Live your life with a sense of direction and security
4
 Where am I now?
 Where do I want to go?
 How do I get from here to there?

5
A bank is a financial institution that accepts deposits from public and creates credits.
In India the Banking Sector is regulated by The Reserve Bank of India (RBI). Banking
helps you to build an emergency fund gradually by setting aside certain amount of
money at regular interval.

Savings account (Demand deposit)

Savings accounts are handy for short-term savings. You can deposit money into a
savings account at any bank. This will keep your savings safe and pay a little interest.
You can take your money whenever you need it.

Recurring deposits (Time Deposit)

Recurring deposits are best if you wish to create a fund by periodically saving for any
special occasions such as buying a car. These are suitable for people who do not have
large amount of savings, but are ready to save a small amount every month. No
withdrawals are allowed.
6
Fixed deposits (Time Deposit)
Commonly known as FD this is where you can deposit a sum for a fixed period.
Withdrawals are not allowed, however, in case of need, the depositor can ask
for closing the fixed deposit account by paying a penalty.

Deposit insurance
The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures all
deposits such as savings, fixed, current, recurring, etc. Each depositor in a bank
is insured up to a maximum of Rs. 5,00,000 for both principal and interest
amount held by the depositor.

7
Digital Payment Methods
• Internet banking supports the transfer of funds from one bank account to
another account through NEFT (National Electronic Fund Transfer), RTGS
(Real Time Gross Settlement) and IMPS (Immediate Payment Service)

• Mobile banking enables the execution of financial transactions through a

mobile phone/tablet

8
Mobile wallet facilitates financial transactions through digital cash. It links
an individual’s account with an e-wallet provided by banks/private players
like Paytm, Freecharge, Mobikwik, etc

Point of Sale (PoS) is the place where sales are made like a mall or a
market. It is also known as Point of Purchase where customers complete
their transactions, like a checkout counter

Unified Payments Interface (UPI) facilities transfer of funds on a real time

basis through a UPI-enabled bank application that supports multiple bank
accounts in one place

9
Advantages of Digital Payments

 Fast, easy and convenient.

 Economical and less transaction fee.
 Provides a digital record of transactions that customers can track.
 Gives a one stop solution for any type of payment.

10
 Do's and Don’ts of Digital Payment
Do's Don'ts

Use password for your Mobile and Never save your mobile banking login
Computer so that no one else can and password on the phone.
access your system Memorize it.

Always visit your bank's secured Never leave your handset unattended
internet Banking site regularly and logged into a mobile banking
app.
Log out of your internet banking Never leave your phone unattended
immediately after you have completed while carrying out financial
your transaction transactions through mobile

If you suspect unauthorised

transactions in your account, report it Never download apps from
to your bank immediately untrustworthy and dubious sources

11
How much life insurance coverage do you need?
You can apply a rule of thumb i.e. 10x or 15x of annual income depending on your requirement.
Next is factoring in liabilities like loans, child education and so on. Here are some pointers which will help
you find out the coverage amount.

Simple rules to find out how much term cover you need: An example

Rule of thumb i.e. 10x of annual income (Rs. 5 lakh) Rs.50 lakh

Loans Rs.20 lakh

Education expense of children Rs.10 lakh
Children marriage Rs.10 lakh
Legacy for family Rs.25 lakh

Total insurance cover required Rs.1.15 crore

Term insurance is a pure protection plan which pays claim amount to your nominee when you die during
the policy tenure. Some term insurance policies now give you coverage till you attain 100 years of age.

12
1 Your current income x 10
2 Loans
3 Children’s education
4 Children’s marriage
5 Legacy for children
6 Other requirements
Total

13
A health insurance policy pays for hospitalization bill including pre and post
hospitalization. It basically covers cost of hospital, tests and medicines.
Look at policies which offer comprehensive coverage. There should be no
copayment or sub limit attached to the policy.

While copayment is the percentage amount, which you will have to shell from
your own pocket as medical expenses, sub limit is the maximum amount that
insurers can pay you for an expense such as room rent.

While comprehensive policies are more expensive but it give you adequate
protection, you may look at buying Arogya Sanjeevani plans offered by all
companies for cost-effective option but these policies come with clauses like co-
payment and sub limits.
14
15
16
 We are living longer
 Healthcare costs are skyrocketing
 Inflation is eating away our savings
 Break down in social system

17
Average life expectancy (UN projections
2022)

Average life expectancy (UN projections

2050)

18
19
Value of Rs 1 lakh in the future @ 6% inflation
5 years 10 years 15 years 20 years

73,000 54,000 39,500 29,000

20
5 years ₹33,700

10 years ₹45,400

20 years ₹82,300

30 years ₹1,44,000

40 years ₹2,57,000

21
22
 When will I retire?
 How long will I live?
 What is my monthly basic expenditure?
 What will be the cost of my expenses in future?
 How much should I provide for my health care and medical needs?
 How much buffer do I need for contingency expenses?

23
How much do I need to save now?

Monthly investment required to build the corpus

(expecting 12% return):

Case 1 (corpus Rs 2.25 crore) = Rs 12,000

Case 2 (corpus Rs 3.17 crore) = Rs 16,500

24
How much will I need post retirement?
Case 1 (life expectancy: 80 years)
Corpus needed to meet monthly expenses of
Rs 1.07 lakh for 20 years post retirement:
Rs 2.25 crore*
Case 2 (life expectancy: 90 years)
Corpus needed to meet monthly expenses of
Rs 1.07 lakh for 30 years post retirement:
Rs 3.17 crore*

*We have assumed 7.5% return on the corpus post retirement

Present earnings: Rs 40,000; Basic monthly expenses: Rs 25,000;
Retirement age: 60;
Present age: 35
Life expectancy: 80/90; Monthly expenses post retirement (at the age of
60): Rs 1.07 lakh (assuming 6% inflation)

25
Save and Invest

26
Savings = Income- Household expenses- EMI-
Entertainment expenses

Household expenses+ EMI+ Entertainment expenses=

Income - Savings

Rule of thumb : Invest 80% of your savings in SIP

27
 Manage expenses
 Know what your expenses are
 Keep every receipt
 Record every expense daily
 Total your expense at the end of the month
 Do this for three months
 Reduce unnecessary spending

28
29
When you give your investments time, you are
leveraging the power of compounding

Piya Riya

30
 Savings Bank Accounts  Real estate
 Bank fixed deposits  Bonds
 National Pension Scheme  Shares
 Company fixed deposits  Gold
 Government savings  Mutual funds
31
When ₹10,000 was invested across Equity, Fixed Deposit and Gold,
equity yielded superior returns

Gold Sensex Bank FD Gold Sensex Bank FD

Growth of investment in % terms Value of Rs.1 lakh in Rs. terms

10 years 6 16 6.95 10 years 179100 441150 195800

5 years 13 19 5.99 5 years 184250 238640 133760

3 years 18 23 5.48 3 years 164300 186100 117360

32
 Sensex Sensex Value of Rs 1 lakh today
Investment Year Invested Rs 1 lakh on (last trading of each year) (at the end of 2021) (end 2021)

1995 Last trading day of 1995 3110 58254 ₹ 18,73,118.97

1996 Last trading day of 1996 3085 58254 ₹ 18,88,298.22
1997 Last trading day of 1997 3659 58254 ₹ 15,92,074.34
1998 Last trading day of 1998 3055 58254 ₹ 19,06,841.24
1999 Last trading day of 1999 5005 58254 ₹ 11,63,916.08
2000 Last trading day of 2000 3972 58254 ₹ 14,66,616.31
2001 Last trading day of 2001 3262 58254 ₹ 17,85,836.91
2002 Last trading day of 2002 3377 58254 ₹ 17,25,022.21
2003 Last trading day of 2003 5839 58254 ₹ 9,97,670.83
2004 Last trading day of 2004 6602 58254 ₹ 8,82,368.98
2005 Last trading day of 2005 9397 58254 ₹ 6,19,921.25
2006 Last trading day of 2006 13787 58254 ₹ 4,22,528.47
2007 Last trading day of 2007 20287 58254 ₹ 2,87,149.41
2008 Last trading day of 2008 9647 58254 ₹ 6,03,856.12
2009 Last trading day of 2009 17465 58254 ₹ 3,33,547.09
2010 Last trading day of 2010 20509 58254 ₹ 2,84,041.15
2011 Last trading day of 2011 15455 58254 ₹ 3,76,926.56
2012 Last trading day of 2012 19427 58254 ₹ 2,99,861.02
2013 Last trading day of 2013 21170 58254 ₹ 2,75,172.41
2014 Last trading day of 2014 27499 58254 ₹ 2,11,840.43
2015 Last trading day of 2015 26117 58254 ₹ 2,23,050.12
2016 Last trading day of 2016 26626 58254 ₹ 2,18,786.15
2017 Last trading day of 2017 34057 58254 ₹ 1,71,048.54
2018 Last trading day of 2018 36068 58254 ₹ 1,61,511.59
2019 Last trading day of 2019 41254 58254 ₹ 1,41,208.13 33
2020 Last trading day of 2020 47751 58254 ₹ 1,22,000.00
2021 Last trading day of 2021 58254 58254 ₹ 1,00,000.00
Value of Rs 1 lakh investment over the years

3 years Rs. 1.6 lakh

5 years Rs 2.2 lakh

10 years Rs 3.7 lakh

15 years Rs 4.2 lakh

20 years Rs 8.5 lakh

If invested in Sensex
(as on December 31, 2021)
34
 Returns
(as on November 2021)

Subsequent
Date of investment Nifty Correction Absolute (%) CAGR (%)

01-06-1997 1065 -24% 1695% 12.30%

01-02-2000 1550 -44.90% 1165% 11.90%
01-10-2007 5510 -58.90% 328% 9.80%
01-12-2010 5961 -23.80% 303% 10.60%
15-10-2016 8738 -10.50% 207% 15.40%

01-02-2020 11662 -34.70% 155% 27.90%

Source: Morgan Stanley Research

35
Investment date 03-01-2000
Sensex 5,375
Redemption date 31-12-2021
Sensex 58,254
Return 11.4% CAGR
Returns (if investor misses
10 best days) 7.4% CAGR
Source: Value Research

36
Requires
 Time
 Expertise
 Constant attention

37
A mutual fund is a professionally managed pool of funds
that invests in different financial securities to achieve
predefined objectives.

Mutual funds are subject to market risks, 38

please read all documents carefully before investing

 Can invest in virtually all asset  Many tax benefits/advantages
classes through MFs  Low cost
 Professionals and experts  Diversification
manage your money  Liquidity
 Convenient & Flexible
 Transparent

39
 National Pension Scheme (NPS) aims to provide old age income to its subscribers.
While there are options like PPF and EPF which also offers old age income post
retirement, NPS gives an individual an opportunity to invest in equity markets to
get better returns that can beat inflation in the long run.

Some key benefits of NPS:

 Gives you market linked returns
 Extremely low cost
 No cap on investment
 Host of tax benefits
 Ensures regular income post retirement

40
NPS investors have two options:
a. to actively decide the allocation in equity, corporate bonds, government bonds
and other asset classes or
b. to let the allocation happen automatically based on your age.
i.e., your equity exposure will reduce as you grow older.

There are three options based on your risk profile:

 1. Aggressive (maximum equity allocation of 75%)
 2. Moderate (maximum equity allocation of 50%)
 3. Conservative (maximum equity allocation of 25%)

41
NPS subscribers can open two accounts

 Tier 1 – Regular NPS scheme. You cannot withdraw money from it

barring a few specific conditions

 Tier 2 – It is just like an open-end mutual funds. Tier II account does

not offer any tax incentive

42
Atal Pension Scheme - APY

 The APY is a defined contribution plan in which government will contribute

50% of the contribution or Rs.1,000 whichever is lower for the first five years to
the subscriber’s account.
 Though the scheme is open for all, the government contribution will only be
given to the workers of the unorganized sector who typically do not have any
statutory social security scheme and are non-tax payers.

Some key features

 The age group for joining APY is 18-40 years
 Offers joint life pension i.e. pension till both subscriber and spouse die
 Minimum guaranteed pension is between Rs.1000 and Rs.5000
 Return of corpus to the nominees after death of both
43
 Aggressive
investors
Equity
Moderately
Hybrid aggressive
investors

Conservative
Debt investors

44
 Overcome the vagaries of the market
Rupee Cost Averaging - you invest a fixed amount of money at regular
intervals irrespective of whether the markets are going high or low. This
ensures that you buy more investment proceeds when the markets are low
and lesser investment proceeds when they are high

Disciplined approach to savings - Convenient, systematic approach to

savings

45
 Monthly SIP of Rs 5000
No of years Total investment 8% 10% 12% 15%
5 3 lakh 3.7 lakh 3.9 lakh 4.1 lakh 4.5 lakh
10 6 lakh 9.2 lakh 10.3 lakh 11.6 lakh 14 lakh
20 12 lakh 29.6 lakh 38 lakh 50 lakh 75.8 lakh
30 18 lakh 75 lakh 1.1 crore 1.8 crore 3.5 crore
40 24 lakh 1.75 crore 3.1 crore 5.8 crore 15.5 crore

46
 Mass marketing fraud: You receive an email that looks
legitimate. It asks you to click on link that lands on a fake
website. It basically asks you to buy, donate or invest
 Credit/debit card fraud: Fraudsters posing as representatives
of banks, credit card companies or digital payment services will
insist you to share account details or card number including
PIN to steal your money
 Network marketing fraud: Someone insists you to become a
member of a business and encourages you to recruit more
members to earn money. Generally, promoters of these
companies create a fake track record and close their business
after a few years
 Lottery scam: In these frauds, scammers may give you lucrative
offer like winning a lottery or a prize from xyz company. They
may ask you to pay some amount to claim the prize
47
 Phishing links:
Fraudsters create genuine looking websites of banks, ecommerce
platforms etc. These links are then circulated through SMS, e-mail
and social media platforms. When a person enters his/her
credentials on these websites, the information gets captured and is
used for committing frauds.
 Vishing calls:
Imposters call people in the name of bank employees, company
executives or insurance agents and seek financial information and
OTP. Their reasons range from issuing new credit card to renewal of
debit cards to attractive discounts and prizes to offering loans
 ATM card skimming:
Fraudsters install skimming device in ATM machines and steal data
from your cards. PIN is captured by installing dummy keypad, small
cameras or by looking at the keypad while you enter it.

48
How to avoid them
 Be aware of the various types of online fraud and be alert
 Make sure your internet connection is secure and use smart and
verified apps only
 If you lose your debit or credit card, call your bank and get yours
cards blocked immediately
 Change your passwords from time to time

49
 Refrain from downloading files from unfamiliar websites
 Don’t share your password or account details with anyone
 Don’t fall prey to freebies, heavy discounts or prizes
 Check domain name and email id before replying to any email
 Immediately contact police or go to court if you found suspicious
activity near you

50
 Facility that enables an individual (including sole proprietor of sole proprietary
concern) to nominate a person, who can claim the investment proceeds held
by the individual or the redemption proceeds there of in the event of death of
the individual.

 If the investment proceeds are held jointly by more than one person, all joint
unit holders are required to together nominate a person in whom all the rights
in the investment proceeds would vest in the event of death of all the joint unit
holders.

 Nomination can be made either at the time of initial application for purchase
of units/opening of account or subsequently.

 Nomination once made can be changed subsequently any time and any
number of times.
51
 In case nomination is not made by a individual, the investment proceeds would be
transmitted to the account of legal heir(s), depending whether the deceased person
has left behind a will and as per applicable succession law, which involves lengthy
(and sometimes expensive & cumbersome) procedure.

 Nomination is a simpler and inexpensive way to make things easy for one’s near and
dear ones to claim the money in your mutual fund folio, demat account or bank
account expeditiously, through minimal paper after one’s death.

 To claim the investment proceeds after the death of a individual, the nominee has to
complete the necessary formalities, such as completion of KYC process, along with
proof of death of the individual, signature of the nominee duly attested, furnishing of
proof of guardianship in case the nominee is a minor, and such other document as
may be required for transmitting the investment proceeds in favour of the
nominee(s).

52
 For banking products, you may reach out to banking ombudsman if you
are not happy with the grievance resolution of banks.
 For capital market products, you can reach out to SEBI Complaints
Redress System or SCORES.
 If you have a complaint related to insurance policies, you may reach
out to IRDAI’s Grievance Management System (IGMS).
 If you have a compaint related to NPS, you may reach out to PFRDA
Ombudsman

53
1. Financial planning is the key to achieving goals including
retirement
2. In the long run, equity is the best option against
inflation
3. Regular investing through SIP is the ideal way to secure
retirement
4. Protect your life and health through insurance
5. Be an informed investor
6. Use digital payment smartly but be watchful of frauds
7. Raising grievances through a proper process will help you in
getting redressal to your satisfaction
54
Thank you Sundaram Mutual
for sponsoring this session

55
Happy
Investing!

56
Attendance & feedback
link

https://bit.ly/feedbackcbse

57
Thank
You!

58