motilal oswal

A

PROJECT REPORT

ON

AS SUMMER TRAINEE

IN

SUBMITTED TO:

HEMCHANDRACHARYA NORTH GUJARAT UNIVERSITY,

PATAN

IN THE PARTIAL FULFILMENT OF THE TRAINING

PROJECT IN M.B.A. PROGRAMME

SUBMITTED BY:

MAHESH.J. RAVAL

UNDER THE GUIDANCE OF:

Mr.Maheshbhai Makawana Prof. K.K.Patel

Motilal Oswal Securities Ltd. S.K.S.B.M, Patan.

DECLARATION

I, Mr. Mahesh. J. Raval do hereby declare that the project report titled

“Awareness about company fixed Deposits” is a genuine research

work undertaken by me and it has not been published anywhere earlier. Date: Place: Mahesh. J. Raval SKSBM, Patan. S.K.S.B.M. PATAN 2

Mr. Maheshbhai Makawana

Product Head (MF),

Motilal Oswal Securities Ltd

CERTIFICATION BY THE ORGANIZATION

This is to certify that Mr. Mahesh. J. Raval in M.B.A at Sevantilal Kantilal School of Business Management, Patan has worked under my supervision and guidance on him dissertation entitled “Awareness

about Company Fixed Deposits” at Motilal Oswal Securities Ltd.,

Mehsana from May 17th _{2009 to July 20}th _{2009. ” To the best of my}

Prof.

S.K. School of Business Management, Patan.

CERTIFICATION BY THE FACULTY GUIDE

This is to certify that the project report entitled “Awareness about

Company Fixed Deposits” at Motilal Oswal Securities Ltd., Mehsana,

is a bonafide record of work done by Mr. Mahesh. J. Raval, and submitted in partial fulfillment of the requirements of M.B.A program of Sevantilal Kantilal School of Business Management, Patan.

PREFACE

It is true that the world outside your cozy home is many a time quite different from what you have perceived. Similarly, it is possible that the theoretical knowledge acquired in the classroom may differ from the practical knowledge.

In order to make an individual aware of the practical implication of what he has learned. He is enriched with the practical training. I as a student of M.B.A. got this opportunity to know what is actually happening in a company. The main areas covered during the training period are: Marketing department, HR department, Financial department, Customer care department and Technical department,

I have taken training at Motilal Oswal Securities Ltd. I have sincerely acquired all the necessary information for my project report during my training period. I hope that this report will satisfy the object requirement.

ACKNOWLEGDEMENT

Sometimes words fall short to show gratitude, the same happened with me during this project. The immense help and support received from Motilal Oswal Securities Ltd overwhelmed me during the project.

My sincere gratitude to Mr. Maheshbhai Makawana Product Head for providing me with an opportunity to work with Motilal Oswal

Securities Ltd.

I am highly indebted to Mr. Jay.K.Oza and Mr. Jay.S.Pandya, company project guide, who has provided me with the necessary information and his valuable suggestion and comments on bringing out this report in the best possible way.

I am grateful to Mr. Vijaybhai Patel (Branch Head, Motilal Oswal Securities Ltd) and all of the members of mass consultancy, who have helped me in the successful completion of this project, special mention of Mr. Kiranbhai Patel, Mr. Parthbhai Raval, Mr.Vishalbhai Patel, Mr.Sanjaybhai Patel and Mr.Hirenbhai Patel. I also thankful to my peers, Palkesh Prajapati, Dimes Panchal , Dipak Prajapati and Priyanka Contractor who help me to complete this project on time. I also thank Prof.K.K.Patel, faculty guide, SKSBM, Patan who has sincerely supported me with the valuable insights into the completion of this project.

Last but not the least; my heartfelt love for my parents, whose constant support and blessings helped me throughout this project.

EXECUTIVE SUMMARY

This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. This project as a whole can be divided into two parts:

 The first part gives an insight about the Fixed Deposit and its various aspects. It is purely based on whatever I learned at Motilal Oswal Securities Ltd. One can have a brief knowledge about Fixed Deposit and all its basics through the project. Other than that the real servings come when one moves ahead. Some of the most interesting questions regarding Fixed Deposit have been covered. Some of them are: why has it become one of the largest financial intermediaries? How investors do choose company to invest in Fixed Deposits? Most popular stocks among fund managers, most lucrative sectors for fund managers, a special report on Fixed Deposit, does fund performance persists and the topping of all the servings in the form of portfolio analysis tool and its application.

All the topics have been covered in a very systematic way. The language has been kept simple so that even a layman could understand. All the data have been well analyzed with the help of charts and graphs.

 The second part consists of data and their analysis, collected

through a survey done on 116 people through questionnaires. It covers the topic “Awareness about Company Fixed Deposits”. The data collected has been well organized and presented. Hope the research findings and conclusions will be of use. It has also covered how many times people prefer to invest their money and about which group of people invest their money in fixed deposits I learn lost of things and quality of manager with practical

experience.

Mahesh Raval

SR.NO PARTICULARS PAGE NO

1 Declaration

2 Certification By The Organization

3 Certification by the Faculty Member

4 Preface

5 Acknowledgement

6 Executive Summery

7 Background Of Company

7.1 Corporate Profile

7.2 Vision & Value of MOSL

7.3 History & Milestones

7.4 Testimonials

7.5 Organization Profile

7.6 MOSL & Subsidiaries Companies

7.7 Services providing by MOSL

7.8 About The Fixed Deposits

7.9 Types Of The Fixed Deposits

7.10 Bank Fixed Deposits

7.11 Company Fixed Deposits

7.12 Types Of Company Fixed Deposits

7.13 Investment Objectives

7.14 Investment Drawbacks

7.15 How Can Invest In Company Fixed

Deposits

7.16 Objectives of The Fixed Deposits

7.17 Benefits of The Fixed Deposits

7.18 Drawbacks of The Fixed Deposits

8 Data Analysis of Questionnaire &

Interpretation

8.1 Objectives of The Research

8.2 Scope Of The Study

8.3 Data Sources

8.4 Sampling

8.6 The Respondents of Questionnaire

9 Questionnaire

10 Data Analysis & Interpretation

11 SWOT Analysis

12 Research Findings & Conclusion

13 Recommendations

14 Bibliography

SR.NO. PARTICULARS PAGE NO. 1 TABLE-1 2 TABLE-2 3 TABLE-3 4 TABLE-4 5 TABLE-5 6 TABLE-6 7 TABLE-7 8 TABLE-8 9 TABLE-9 10 TABLE-10 11 TABLE-11 12 TABLE-12 13 TABLE-13 14 TABLE-14 15 TABLE-15 16 TABLE-16 17 TABLE-17

S.K.S.B.M. PATAN 12

SR.NO PARTICULARS PAGE NO.

1 GRAPH-1 2 GRAPH -2 3 GRAPH - 3 4 GRAPH -4 5 GRAPH - 5 6 GRAPH - 6 7 GRAPH - 7 8 GRAPH - 8 9 GRAPH - 9 10 GRAPH -10 11 GRAPH - 11 12 GRAPH -12 13 GRAPH - 13 14 GRAPH -14

CORPORATE PROFIL

Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an almost 2000 member team.

Today company is a well diversified financial services firm offering a range of financial products and services such as

 Wealth Management

 Broking & Distribution

 Commodity Broking

 Portfolio Management Services

 Fixed Deposits and Bonds

 Institutional Equities  Private Equity

 Investment Banking Services and

 Principal Strategies

Company has a diversified client base that includes retail customers (including High Net worth Individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. Company’s headquarter is in Mumbai and as of March 31st, 2009, had a network spread over 548 cities and towns comprising 1,289 Business Locations operated by its Business Partners and it. As at March 31st, 2009, company had 5, 41,372 registered customers.

In 2006, the Company placed 9.48% of its equity with two leading private equity investors based out of the US – New Vernon Private

Equity Limited and Bessemer Venture Partners.

The company got listed on BSE and NSE on September 9, 2007. The issue which was priced at Rs.825 per share (face value Rs.5 per share) got an overwhelming response and was subscribed 27.18 times in

turbulent market conditions. The issue gave a return of 21% on the date of listing.

As of end of financial year 2008, the group net worth was Rs.7 bn and market capitalization as of March 31, 2008 was Rs.19 bn.

For year ended March 2008, the company showed a strong top line growth of 91% to Rs.7 bn as compared to Rs.3.68 bn, last year. New businesses like investment banking, asset management and fund based activities have contributed to this growth.

Credit rating agency Crisil has assigned the highest rating of P1+ to the Company’s short-term debt program.

Motilal Oswal Financial Services Limited is the holding company of the following five subsidiaries:

Vision & Values of Motilal Oswal Securities Ltd.



Vision :



Values(Mission):

Integrity A company honoring commitment with highest

ethical and business practices

Team Work Attaining goals collectively and collaboratively

Meritocracy Performance gets differentiated, recognized

and rewarded in an apolitical environment Passion & Attitude High energy and self motivated with a “Do It”

attitude and entrepreneurial spirit. Excellence in

Execution Time bound results within the framework of the company’s value system

HISTORY & MILESTONES

The story of Motilal Oswal Securities Ltd (MOSL) goes back many years, when Mr. Motilal Oswal and Mr. Raamdeo Agrawal met each other as students in a Mumbai suburban hostel in the early eighties. Both the young chartered accountants hailing from a rural & an unpretentious background had a common dream viz. 'to build a professional organization with strong value systems, to provide reliable & honest investment advice to investors'. Thus was born their first enterprise called "Prudential Portfolio Services" in 1987.

2009

• Motilal Oswal Securities Ltd. enters 'Limca Book of Records' for creating India's largest dealing room in Mumbai

• MOSL was 'Rated No.1 – Best recommendations Mid & Small Caps' and won awards in 3 out of 4 categories at the Starmine India

Broker Rankings 2009 from Thomson Reuters

2008

• MOSL awarded the prestigious Nasscom - CNBC TV 18 IT User

Award - 2008

• MOSL awarded 'The Best Franchisor in Financial Services' by

Franchisee World Magazine 2008 for the second consecutive year

• MOSL creates one of India's largest Equity Dealing & Advisory rooms; spread over 26,000 sq ft in Malad, Mumbai

• Motilal Oswal's India Business Excellence Fund raised USD 125

million, 25% higher than the initial target of USD 100 million • D & B survey rates MOSL as India's top Broking House in terms

of total number of trading terminals

• MOSL alliance with IDBI Bank to offer Online Trading Services • Asia Money Brokers poll 2007 rates Motilal Oswal Securities

Ltd. - Best Overall Country Research - Local Brokerage

2007

• The Strategic partnership between MOSL and SBI - EZtrade -

reaches an important milestone i.e. in less than a year it has managed to sign up more than 10,000 customers

• Starts Knowledge First campaign

• Motilal Oswal was perceived as the most Research driven stock

trading player - Starcom Mediavest Survey

• Introduces a separate brand for Private Client Group - Purple

• Motilal Oswal Commodities Broker Pvt Ltd (MOCBPL) bagges

Globoil India's prestigious 'Outstanding Commodity Broking House 2007' Award

• Motilal Oswal Financial Services ltd. gets listed on the BSE & NSE

• Mr. Motilal Oswal - Chairman and Managing Director has been

appointed as a member of the Managing Committee of Indian Merchant Chambers.

• Motilal Oswal Financial Services Ltd files RHP with SEBI for an IPO

• Motilal Oswal Financial Services Ltd. features as a case study in Harvard Business School

• Motilal Oswal Financial Services Ltd ties up with Punjab National Bank to offer online trading to its customers

2006

• Organizes the second India Conference with Bear Stearns New York

featuring discussion panels and presentations by prominent business leaders and senior management of Indian companies in banking, technology, healthcare, consumer, oil and gas, infrastructure and other key sectors.

• Launches the India Business Excellence Fund (IBEF), a US$ 100 mn India focused Private Equity Fund.

• Investment Banking business advises Aban in their majority controlling stake of Sinvest ASA – one of the largest investment banking deals of 2006.

• Places 9.29% with two leading private equity investors - New Vernon Private Equity Limited and Bessemer Venture Partners.

• Issues 14% of companies equity to employees as ESOPs.

• Acquires a leading south Indian brokerage firm - Peninsular Capital Markets. Also acquires 3 more brokerage firms in UP and Gujarat. • Enters Private Equity and Investment Banking businesses.

• Value PMS gives 390% returns to its investors between Feb 2003 and March 2006.

• Relaunches its e-Broking service through a nationwide campaign. First advice-based online trading proposition in the Indian markets. • Another milestone in distribution – over 1000 outlets, over 375 cities, serving over 1, 75,000 customers.

• Employee base crosses 2000 and Business Associate base crosses 1000.

2005

• Organizes the first India Conference with Bear Stearns in New York.

India’s largest such conference of its kind in the US.

• Asia money Brokers Poll 2005 rates Motilal Oswal Securities - Best Local Brokerage, MOSL Independent Research House, Best in Sales and Service.

• Launches two new Portfolio Management Schemes - Value Hedging for derivatives and Discover Value for the Rs. 5 lakh to Rs. 50 lakh category.

• Acquires local brokerage Gayatri Capitals from Andhra Pradesh and Varghese from Karnataka.

• Deepest distribution in the stock broking segment with 700 outlets in 320 cities and 1, 20,000 customers.

2004

• Presence expanded to 270 outlets in 150 cities and 20 states.

• Value PMS delivers a whopping 160% post tax returns for the period ended April

• Bulls Eye PMS - A momentum based PMS launched. • Start of the Solid Research Solid Advice campaign.

2003

• Enters the mutual fund and IPO distribution business.

• MOSt Portfolio Management Services launched with Mr. Raamdeo Agrawal as the Portfolio Manager. Uniquely structured performance related fees.

• Inquire team is successful in capturing the uptrend in Banking, Auto and Infrastructure sectors.

• Received the Asia Money award for the Best Overall Domestic Research House-Mega funds.

• Crossed 15,000 Depository accounts.

• 9 own branches setup at 7 cities to provide Equity Advisory Services. More in the pipeline.

• 150 outlets in 110 cities across 18 states & one Union Territory in India manned by 1000 people servicing over 15,000 Retail and Institutional Investors.

2002

• Mr. Navin Agarwal, Head of Equity Research & Institutional sales, inducted in the Board of Directors.

• MOSt consolidates its retail operations & upgrades its IT / Back Office infrastructure to cater to its growing network of branches, Franchisees and Channel Partners.

• Received the Asia Money Award - 2nd best among Indian Brokerage firms.

• Retail network completes coverage of 100 cities in India. • Direct servicing of HNI clients is initiated.

• Crosses 10,000 Depository accounts.

2001

• Legendary marketing guru Shunu Sen’s services taken to revitalise retail marketing strategy and branding efforts.

• Starts offering Derivatives products and advisory services on both BSE as well as NSE.

2000

• Received the Asia Money award for the Best Domestic Equity house. • Both Mr. Motilal Oswal and Mr. Raamdeo Agrawal receive Rashtriya Samman Patra from Central Board of Direct Taxes for being amongst the top 50 tax payers in India from FY94-FY98.

• Acquires its 100th Franchisee / Channel Partner and emerges as a leading player in the Indian Broking Sector.

• Becomes a Depository Participant of Central Depository Services Limited (CDSIL).

1999

• Mr. Raamdeo Agrawal starts attending legendary billionaire investor

Warren Buffett’s Annual General Meetings of Berkshire Hathway Inc. He still continues to attend it every year.

• The Wealth Creation Study started in 1996 culminates into Wealth Creation Seminar and Awards function in 1998.

• First Stock Broking house to brand its services as a research and advice based broker.

• “Wealth Creation” Campaign started.

• www.MotilalOswal.com launched. First broking house in India to go on the web.

• Becomes a Depository Participant of National Securities Depository Limited (NSDL).

• Inducts Mr. Ivan Mathias, former country head of Watson Wyatt Worldwide, on its Board to Directors to shape HR initiatives.

1998

• Mr. Motilal Oswal joins the Governing Board of The Stock Exchange, Mumbai.

1996

• Wealth Creation Study started. First of its kind study initiated to

identify biggest and fastest wealth creating companies in Indian Stock markets.

1995

• “Motilal Oswal” gets incorporated as Motilal Oswal Securities Ltd.

1994

• MOSt acquires NSE Membership and plans for major expansion of

its retail network.

• Inquire (Indian Equity Research) is formally created at a 2500 sq. ft office in South Mumbai with bigger and better quality infrastructure than the corporate office. Since then nearly 20% of revenue is

allocated to research. First Domestic Stock broking house to have such a strong Research focus.

• “Motilal Oswal” enters Institutional Broking business.

1990

• After just three years in the business, “Motilal Oswal” is formed

through acquisition of membership on The Bombay Stock Exchange (BSE). Three more memberships taken in later years.

1987

• Mr. Motilal Oswal and Mr. Raamdeo Agrawal lay the foundation of a

great partnership by starting a sub-broking firm. The venture stands out from the rest due to their approach of Research-based broking even when sub-brokers.

TESTIMONIALS

"I have glanced through the 11th Wealth Creation Study and it indeed is informative."

-Mr.Raymond N. Bickson Managing Director, The Indian Hotels Company Ltd. These (Wealth Creation) reports have become handy reference guides to corporate performance. I find them very useful indeed

-S M Datta Peerless General Finance & Investment Co. Ltd. "Firms like Motilal Oswal are playing a very major role of taking the equity cult deep into the rural areas through presence in 4000 terminals throughout the country in electronic trading".

-Shri Prithviraj Chavan, Minister of State in the Prime Ministers Office, Government of India, At the Bear Sterns 2nd Annual India Conference, September 2006 “Motilal Oswal is embarking on a path to become a full-fledged

financial powerhouse.”

-Business India

“Motilal Oswal Securities is the most successful brokerage house ever. Research was their forte and today providing research backup to brokerage clients has become a part of the game for all brokerage houses of repute. Motilal Oswal Securities has been rated as the best in research by AQ research of UK in March 2006”

-Hindustan Times “Sheer hard work, focused research and consistent and logical investment philosophy is what sets apart companies like Motilal

Oswal. They have risen to the top because of their single-minded focus on investment philosophy and did not deviate despite swings in the market.

Therein lies a lesson. If they can do it, so can others. Never try to reinvent the wheel; follow the leader and you have plenty of them in the Indian market.”

-Sandeep Shenoy, Strategist, Pioneer Intermediaries "I am sure you will take care of my investments while I am out . . . Your Relationship Manager's understanding is good and is capable of showing good results. We did 40% thereabouts over last quarter compared to 30% through my equity mutual fund. So keep it up and remember we have to grow at least 30% next quarter".

-An EAG Client “One can define the service of Motilal Oswal Securities as: To give real service you must add something which cannot be bought or measured with money; and that is sincerity and integrity followed by dedicated support from all departments of the office".

-A Business Associate

ORGANIZATION PROFILE

Mr. Motilal Oswal

Chairman and Managing Director

Mr. Motilal Oswal is the promoter of Motilal Oswal Securities Ltd. He is a member of Institute of Chartered Accountants of India and started the business along with the co-promoter Mr. Raamdeo Agarwal in 1987.Business Administration is his forte, Honesty, transparency and client goodwill form the core of his business practice.

“Service is required in everything, in research, in execution and in settlement. It is going to be the key to survival. If you give good service and value to your clients, it ill translates into good business.”

This has been a strong belief of Mr. Motilal Oswal and he has not only practiced it himself but also made efforts to inculcate similar values in the employees of the organization.

He had been elected as a Director of BSE and joined its governing board in 1998. He is currently a member of various committees of CDSIL and SEBI. He is currently a member of the NSE committee for F&O.

Mr. Raamdeo Agrawal

Joint Managing Director

Mr. Raamdeo Agrawal is the man behind the strong research

capabilities at Motilal Oswal Financial Services Ltd. He is an Associate of Institute of Chartered Accountants of India and also a member of the National Committee on Capital Markets of the Confederation of Indian Industry.

Mr. Agrawal specialises in equity research. He has been authoring the annual Motilal Oswal Wealth Creation Study since its inception in 1996. In 1986, he wrote the book ‘Corporate Numbers Game’, along with co-author, Mr. Ram K Piparia. He has also featured on 'Wizards of Dalal Street on CNBC TV 18'.

Mr. Agrawal has received the "Rashtriya Samman Patra" awarded by the Government of India for being amongst the highest Income Tax payers in the country for a period of 5 years from FY95–FY99.

Mr. Navin Agrawal

Director

Mr. Navin Agarwal is on the Board of Motilal Oswal Financial Services Limited. He is a member of Institute of Chartered Accountants of India, Institute of Cost & Works Accountants of India, and Institute of Company Secretaries of India.

He heads the Institutional Broking business and has been

instrumental in building a market leading position with domestic and foreign institutional investors. Under his leadership, the firm has been rated as The Best Indian Brokerage House by Asia money 2005.

Leveraging on the dominant positioning in institutional business, he has also been instrumental in building an Institutional Derivatives business when derivative products were introduced in the Indian markets. Here again, a market leading position has been established by MOSL.

Mr.AshutoshMaheshwari

CEO – MOIAPL

Mr. Ashutosh Maheshvari holds a bachelor's degree in technology (Chemical Engineering) from the Indian Institute of Technology, Kharagpur. He has also done his Masters in Business Administration from University of Delhi.

Prior to joining our Company, he was the Executive Director with Rabo India Finance Private Limited.

Mr. Maheshvari has 13 years of experience in the financial sector and has held various senior positions. Previously, he has worked with CRISIL and ICI India Limited.

Mr.Vishal Tulsyan

CEO - MOPEAPL

Mr. Vishal Tulsyan holds a bachelor's degree in commerce from St. Xaviers College, Kolkata University, and is a professionally qualified Chartered Accountant from The Institute of Chartered Accountants of India. He is an all-India rank holder in Chartered Accountancy.

Prior to joining MOFSL, Mr. Tulsyan was Director, Corporate Finance with Rabo India Finance Private Limited, a subsidiary of Rabo bank International. He has over 10 years of experience in corporate finance and has held various senior positions.

Previously, he worked with SBI Capital Markets Limited, Mumbai and ANZ Grind lays Bank Limited, Kolkata

Mr.Rajat Rajgarhia

Director – Research

Mr. Rajat Rajgarhia started his career with his family run broking business in equities.

Post completing his CA and MBA, he joined Indiainfoline for a short stint in the research function. He joined Motilal Oswal in 2001 as a research analyst.

Mr. Rajgarhia then went on to head the research team and now has been associated with MOSL for over 7 years.

Mr. Rajesh Dharamshi

Director - Institutional Trading

Mr. Rajesh Dharamshi started his career with Hemendra R Sheth (Member of BSE & NSE) and went on to a very long stint with group. He was Head of Institution of HRS from 2000-2002.

He than moved on as Sr. VP - Institution Sales Equity & Derivatives for Refco (Now MF Global).Mr.Dharamshi joined Motilal Oswal as

Head of Institutional Derivatives in 2003.

He currently heads Institutional Trading (Cash & Derivatives) at MOSL. He is also a Director on the board of Motilal Oswal Commodities Broker Pvt Ltd & Motilal Oswal Capital Markets Pvt Ltd.

Mr.JayeshParekh

Director - Institutional Sales

Mr. Jayesh Parekh began his career with ICICI as a management trainee after securing ranks in Intermediate and Final exams of Chartered Accountancy. After ICICI, he joined Anand Rathi group and worked in different functions including corporate advisory and equity research. Post Anand Rathi Securities, he joined SMIFS Securities and worked for 5 years as head of research.

Mr. Parekh joined Motilal Oswal in 2003. He was rated #1 sales person for India in the Asia Money Brokers poll for 2 consecutive years in 2006 and 2007. Mr. Parekh is Head of Institution Sales for MOSL

Mr.ManishShah

AssociateDirector, BusinessStrategyand Product Development

Mr. Manish Shah is a graduate from the Institute of Cost and Work Accountants of India and a Certified Financial Analyst from the Institute of Chartered Financial Analysts of India. Mr. Shah had a brief stint with a proprietary firm KG Vora in 1991, where he was involved in developing the IPO Business. In June 1992, he joined Info -Invest Group as Research Analyst and later was responsible for developing the Institutional and Retail business. He then worked as a manager at Mafatlal Securities Ltd from July 1995. Mr. Shah joined MOSL in 1999. He currently heads the Equity business and is also responsible for Business Strategy and Product Development.

Mr.NitinRakesh

CEO, Asset Management Business

Mr. Nitin Rakesh has over 13 years of experience in the Financial Services industry. His last role was as the CEO and Executive Director of State Street Syntel Services, the JV between State Street Bank

(NYSE: STT) & Syntel (NASD: SYNT). In addition, he has held various positions in organizations such as TCG Investments and Unit Trust of India (UTI Mutual Fund). Mr. Rakesh is a B.E. (Computers), Delhi College of Engineering & an MBA (Finance), NMIMS, Mumbai. Mr. Rakesh heads the Asset Management Business.

Strong Management

Team:-The organization finds its strength in its team of young, talented and confident individuals. Qualified professionals carry out different functions under the able leadership of its promoters, Mr. Motilal Oswal and Mr. Raamdeo Agrawal. Our talented pool of people comprises qualified and experienced professionals with an established track record. We believe that our management's entrepreneurial spirit, strong technical expertise, leadership skills, insight into market/customer needs provide us with a competitive strength which will help us implement our business strategies.

Training & Manpower

Development:-MOSL conducts various training and development programs regularly to enhance the capabilities of its team. As much as 5% of the salary bill is spent on such programs, which is amongst the highest for a broking organization in India. MOSt is truly a learning organization with lead being taken by the Directors, who regularly participate in top

management learning programs like Strategic Management Program at Indian School of Business, Hyderabad, Strategy Summits with Management Gurus like Tom Peters and Dr. Lester Thurow, Dean, Sloan School of Management, (MIT) and Brand Management Seminar by Al Ries etc.

Focus on

Research:-Research is the solid foundation on which Motilal Oswal Securities advice is based. Almost 10% of revenue is invested on equity research and we hire and train the best resources to become advisors. At

present we have 22 equity analysts researching over 27 sectors. From a fundamental, technical and derivatives research perspective; Motilal Oswal's research reports have received wide coverage in the media (over a 1000 mentions last year). Our consistent efforts towards

quality equity research have reflected in an increase in the ratings and rankings across various categories in the Asia Money Brokers Poll over the years.

Our unique Wealth Creation Study, authored by Mr. Raamdeo

Agrawal, Managing Director, is now in its 13th year. Investors keenly await this annual study for the wealth of information it has on the companies that created wealth during the preceding five years.

Awards and Accolades

:-Motilal Oswal Financial Services has received many accolades in the year gone by. Some of them are:

 Rated ‘Best Overall Country Research’ for a Local Brokerage in the 2007 Asia Money Brokers poll

 Rated India’s top broking house in terms of total number of trading terminals by the Dun & Bradstreet survey

 Rated ‘Outstanding Commodity Broking House-2007’ by Globoil

India

 Ranked second best for Customer Responsiveness in the

Financial Sector at the Avaya Global Connect Customer Responsiveness awards

MOSL & SUBSIDERIES COMPANIIES

 Motilal Oswal Financial Services Ltd.

3rd Floor, Hoechst House,

Nariman Point, Mumbai - 400 021.

Board: + 91 – 022 - 39825500/ 39825540. Fax: + 91 – 022 - 22823499

 Motilal Oswal Securities Ltd. – Wealth Management

3rd Floor, Hoechst House,

Nariman Point, Mumbai - 400 021. Board: + 91 – 022 - 39825500. Fax: + 91- 022- 22823499.

 Motilal Oswal Securities Ltd. - Institutional Equity

4th Floor, Hoechst House,

Nariman Point, Mumbai - 400 021. Board: + 91 – 022 - 39825550

Fax: + 91 – 022 - 22883821 / 22885038.

 Motilal Oswal Private Equity Advisors Pvt. Ltd.

3rd Floor, Hoechst House,

Nariman Point, Mumbai - 400 021.

Board : + 91–022-39825500/39825540. Fax : +91–022-22823499.

 Motilal Oswal Investment Advisors Pvt. Ltd.

112/113, 11th Floor, Bajaj Bhawan, Nariman Point, Mumbai - 400 021.

Board : + 91 – 022 - 39804380 Fax: + 91 – 022 - 39804315.

 Motilal Oswal Commodities Broker Pvt. Ltd.

81/82, Bajaj Bhawan,

Nariman Point, Mumbai - 400 021. Board: + 91 – 022 - 39804200/ 01 Fax: + 91 – 022 - 22816161.

SERVICES PROVIDING BY MOSL

MOSL’S businesses and primary products and services are:

 Wealth Management

 Broking & Distribution

 Commodity Broking

 Portfolio Management Services

 Fixed Deposits and Bonds

 Institutional Equities  Private Equity

 Investment Banking Services and

 Principal Strategies

Wealth Management

:-Financial planning for individual, family and business wealth creation and management needs. These are provided to customers through our Wealth Management service called ‘Purple’

Broking & Distribution Services:-

 Equity (cash and derivatives)

 Commodity Broking

 Portfolio Management Services

 Distribution of financial products

 Financing

 Depository Services

 IPO distribution

We offer these services through our branches, Business Partner

locations, the internet and mobile channels. We also have strategic tie-ups with State Bank of India and IDBI Bank to offer our online trading platform to its customers.

Commodity

Broking:-Through Motilal Oswal Commodities Broker (P) Ltd our fully owned subsidiary; we provide commodity trading facilities and related

products and services on MCX and NCDEX. Besides access to the best of research in the form of Daily Fundamentals & Technical Reports on highly traded commodities, our clients also get access to our exclusive Customized Trading Advice on both the trading platforms. We offer these services through our branches, Business Partner locations, the internet and mobile channels

Portfolio Management Services

:-Motilal Oswal Portfolio Management Services offer a range of

investments solutions through discretionary services. We at Motilal Oswal have helped create wealth for our customers through our Portfolio Management Services. Our knowledge of the markets together with our understanding of our customers and their risk profiles has helped us design a range of portfolio offerings for our clients. These include the Value Strategy, Bulls Eye Strategy, Trillion

Dollar Opportunity Strategy and Focused Strategy Series I. As of

March 31st, 2009, the Assets Under Management of our various portfolio schemes stood at Rs.4.77 bn.

Motilal Oswal group has applied to the regulatory bodies for a license to operate as a Domestic Asset Management Company (Mutual Fund) and we expect to begin operations soon.

Fixed Deposits and

Motilal Oswal group has worked on fixed deposits and bonds which have issued by the various companies. Such fixed deposits and bonds have used by the companies to fulfill their capital needs only. Motilal Oswal Securities Ltd. has offered safety and securities of the

investment, invested by he investors.Anybody can enter/ exit in/from the fixed deposit and bonds schemes.

We offer equity broking services in the cash and derivative segments to institutional clients in India and overseas. These clients include companies, mutual funds, banks, financial institutions, insurance companies, and FIIs. As at March 31st, 2009, we were empanelled with over 300 institutional clients including 200 FIIs. We service these clients through dedicated sales teams across different time zones.

Investment Banking

:-We offer financial advisory services relating to mergers and

acquisitions (domestic and cross-border), divestitures, restructurings and spin-offs through Motilal Oswal Investment Advisors Private Ltd. (MOIAPL)

We also offer capital raising and other investment banking services such as the management of public offerings, private placements (including qualified institutional placements), rights issues, share buybacks, open offers/delistings and syndication of debt and equity. MOIAPL has closed 23 transactions in 2007-08 worth US$ 1.8 billion and had 18 mandates in hand as at March 31, 2008.

Private Equity

:-

In 2006, our private equity subsidiary, Motilal Oswal Private Equity Advisors Private Ltd (MOPEAPL) was appointed as the investment manager and advisor to a private equity fund, India Business

Excellence Fund, which was launched with a target of raising US$100 mn. The fund is aimed at providing growth capital to small and

medium enterprises in India, with investments typically in the range of US$3 mn to US$7 mn.

MOPEAPL will manage and advise the fund and other private equity funds, which may be raised in the future. In its final closing, in

December 2007, the fund obtained commitments of US$125 mn (Rs.4, 875 mn) from investors in India and overseas. The Fund has

deployed/ committed $ 58 mn across 8 deals.

MOPEAPL has recently launched an INR 750 crores domestic Real Estate Private Equity Fund called “India Realty Excellence Fund” sponsored by Motilal Oswal Financial Services Ltd.

Principal Strategies

Group:-For effective management of treasury operations and to capitalize on market opportunities, the Group has set up a 30 member team which would be responsible for effective deployment of funds into different trading and arbitrage strategies.

Fixed Deposits- Recently popular instrument

With investment avenues increasing by the day it is quite easy to forget that until the reforms era kicked off in 1991; Indians had very limited means of investing their savings. While it is true that we have not yet seen any development on the lines of the more developed economies there are a number of instruments today that were unheard of amidst the lay investors just a short decade ago. On the one hand investors are still struggling to come to terms with the complex nature of some securities and on the other intermediaries are trying to raise the investors' awareness. Stock favorites such as fixed deposits (FDs) are meanwhile enjoying a renewed burst of popularity.

The slump in the capital markets and the large amounts of losses by investors in IPOs are but a couple of factors for this hunt for security by investors, even at the cost of lower returns. The central bank, RBI, and the market regulator, SEBI, have been attempting to rein in unscrupulous operators from cashing in on this rush for FDs. In fact, between 1994 and 1996 a few states like Tamil Nadu saw a literal explosion of FD offers with promises of impossible returns like 36 per cent to even 50 per cent per annum in some cases. A number of gullible investors saw their savings go up in smoke at the hands of such corporate entities. It is only recently that credit rating has been made mandatory for FD raising exercises, as were prudential norms. However, the bitter lesson resulted in investors ignoring almost all other factors barring security while investing their savings. Thus, the past two years have seen a huge growth in bank deposits and in the FD levels of the better segment of India Inc. In this segment, we will regularly post details on the three main categories of FDs, i.e., with banks, manufacturing companies and non-banking finance companies or NBFCs. Investors can find information on various changes that occur in this sector and details on how government policies could affect this crucial area. We will also keep investors abreast of interest

rates offered and the performance of individual entities in each of the three above-mentioned segments.

Fixed Deposits, In a world where the returns on your investment are

directly proportional to the inherent risks, it is but natural that the investor who opts for fixed income instruments is well into his chosen career. Basic family needs such as an own house and reasonable insurance cover would have been provided for, but the proximity to retirement would prompt the need to lower investment risks. Also returns from investments form the principal source of income and preservation of capital is paramount.

As is the basic rule in choosing any investment option, here too it is essential that the investor decides in advance the proportion of

investing in stocks and bonds. Periodic evaluation is equally

important and while necessary changes have to be made, investments must never be switched for negligible changes in interest rates. For example if you are receiving say 12.5 per cent per annum through Bond A, think very hard before you decide to switch over to Bond B which promises 12.75 per cent or even 13 per cent. The decision to effect a change between fixed incomes instruments should not be made lightly as the security of the principal is sacrosanct. Thus judicious selection of instruments is critical.

Luckily in India there a number of avenues for such investors, with the most popular forms being:

 Fixed deposits with banks and post offices.

 Fixed deposits with companies.

 Public sector bonds.

 Income-oriented units and growth oriented units.

 Non-convertible debentures of private sector.

 Convertible debentures

 National Savings Certificates.

 Provident Fund contributions.

Provident funds and public provident funds are also excellent areas of investment and offer both initial and a continuing tax advantage. There are added benefits such as the existence of a facility for partial withdrawals, attractive rates of returns and immunity from attachment of a court decree. If you are on the hunt for a tax-sheltered current income then give preference to income-oriented units and public sector bonds as rates of return are more attractive than other fixed income avenues with similar tax benefits.

Convertible debentures of reputed, profit making companies are also worth picking up. Such securities are traded lower than the company's underlying equity. The company pays interest until conversion after which the investor gets dividend income. If your taxable income is less than Rs.50, 000 and you have exhausted the limits for various tax-sheltered investments, non-convertible debentures, Indra Vikas Patras and corporate fixed deposit schemes would then be your best bet.

Proposition: In the last two or three years the hotel industry has been moving down. Most of the stocks have taken a beating. Foreign players have also started moving into the market. The general economic depression coupled with the S-E Asian crisis and the nuclear blasts have taken their toll on the industry. Recent trends indicate a shift in fortunes for the industry as a whole and especially for a few players. .

Fixed

Deposit:-What is a fixed deposit?

A fixed deposit is an investment account comprising a single deposit, for a fixed term at a guaranteed fixed rate of interest. It can be used for both short and long term investment purposes. A fixed deposit account allows you to deposit your money for a set period of time, thereby earning you a higher rate of interest in return. Fixed deposits also give you a higher rate of interest than a savings bank account.

Why Fixed Deposit?

Fixed deposit is one of the oldest & most common methods of Investing. FDs look great because you get a decent risk-adjusted return and your principal is protected. Fixed deposits help you to secure your hard earned money for a long duration. Fixed deposit is a financial instrument for you to deposit your money for a fixed duration ranging from 15 days to 5 years.

However you need to remember that FDs are safe only as long as they are parked in large bank. Now a day, the banks & financial market is becoming very competitive.

You need to check up on the different types of FDs scheme available before making any fixed deposit investments. Banks offer various types of fixed deposits in India to their customers. Some banks offer a fixed deposit schemes which offer more savings & over draft facility. Some private company also offer fixed deposit scheme.A regular fixed deposit can earn you an interest up to 8.75% and senior citizens who opt for such a fixed deposit scheme are eligible for an additional 0.5 % increase.

Who can apply for a fixed deposit account?

Individuals and organizations with the intention of retaining their savings for a fixed period for some future use.

What is the minimum amount can be deposited?

The minimum deposit amount is Rs. 1,000/- Deposits can be made in multiples of Rs. 100/-.

Chart of Fixed Deposit Investment

CHART-2

Here the Chart shows that Investors invest their money in the Fixed Deposits for particular time period on particular interest rate. If the interest rate raise then the amount of the investment is also increased and if the rate is fall then the investment is decreased. The investors will get the amount with increment or decrement on particulars time period if the rate is respectively increased or decreased .The main benefits of the Fixed Deposit is that investors can anytime switch it if it does not give proper return.

TYPES OF FIXED DEPOSITS

There are two types of Fixed Deposit in India. One is Fixed Deposits in Banking Sector and other is Banking Fixed Deposits. In Non-banking Fixed deposits, various companies, Private and Public Institutes and post Offices provide the Fixed Deposit Services. Non-banking FDs are called Non-Banking Finance Companies (NBFCs) Fixed Deposit.

-: Bank Fixed

Deposit:-A fixed deposit is meant for those investors who want to deposit a lump sum of money for a fixed period; say for a minimum period of 15 days to five years and above, thereby earning a higher rate of interest in return. Investor gets a lump sum (principal + interest) at the

maturity of the deposit.

Bank fixed deposits are one of the most common savings scheme open to an average investor. Fixed deposits also give a higher rate of interest than a savings bank account. The facilities vary from bank to bank. Some of the facilities offered by banks are overdraft (loan) facility on the amount deposited, premature withdrawal before maturity period (which involves a loss of interest) etc. Bank deposits are fairly safer because banks are subject to control of the Reserve Bank of India.

Features:-Bank deposits are fairly safe because banks are subject to control of the Reserve Bank of India (RBI) with regard to several policy and operational parameters. The banks are free to offer varying interests in fixed deposits of different maturities. Interest is compounded once a quarter, leading to a somewhat higher effective rate.

The minimum deposit amount varies with each bank. It can range from as low as Rs. 100 to an unlimited amount with some banks. Deposits can be made in multiples of Rs. 100/-.

Before opening a FD account, try to check the rates of interest for different banks for different periods. It is advisable to keep the amount in five or ten small deposits instead of making one big deposit. In case of any premature withdrawal of partial amount, then only one

or two deposit need be prematurely encashed. The loss sustained in interest will, thus, be less than if one big deposit were to be encashed. Check deposit receipts carefully to see that all particulars have been properly and accurately filled in. The thing to consider before investing in an FD is the rate of interest and the inflation rate. A high inflation rate can simply chip away your real returns.

The rate of interest for Bank Fixed Deposits varies between 4 and 11 per cent, depending on the maturity period (duration) of the FD and the amount invested. Interest rate also varies between each bank. A Bank FD does not provide regular interest income, but a lump-sum amount on its maturity. Some banks have facility to pay interest every quarter or every month, but the interest paid may be at a discounted rate in case of monthly interest. The Interest payable on Fixed

Deposit can also be transferred to Savings Bank or Current Account of the customer. The deposit period can vary from 15, 30 or 45 days to 3, 6 months, 1 year, and 1.5 years to 10 years.

TABLE-1

Duration Interest rate (%) per _annum

15-30 days 4 -5 % 30-45 days 4.25-5 % 46-90 days 4.75—5.5 % 91-180 days 5.5-6.5 % 181-365 days 5.75-6.5 % 1-2 years 6-8 % 2-3 years 6.25-8 % 3-5 years 6.75-8

Bank deposits are the safest investment after Post office savings because all bank deposits are insured under the Deposit Insurance & Credit Guarantee Scheme of India. It is possible to get a loan up to75- 90% of the deposit amount from banks against fixed deposit receipts. The interest charged will be 2% more than the rate of interest earned by the deposit. With effect from A.Y. 1998-99, investment on bank deposits, along with other specified incomes, is exempt from income tax up to a limit of Rs.12, 000/- under Section 80L. Also, from A.Y. 1993-94, bank deposits are totally exempt from wealth tax. The 1995

Finance Bill Proposals introduced tax deduction at source (TDS) on

fixed deposits on interest incomes of Rs.5000/- and above per annum.

Disadvantages:-Bank Fixed deposit Rate are lower than non banking fixed Deposit Rate and so if the market is high investor of bank FDs get low returns on their investment compare than Others.

How to

apply:-One can get a bank FD at any bank, be it nationalized, private, or foreign. You have to open a FD account with the bank, and make the deposit. However, some banks insist that you maintain a savings account with them to operate a FD. When a depositor opens an FD account with a bank, a deposit receipt or an account statement is issued to him, which can be updated from time to time, depending on the duration of the FD and the frequency of the interest calculation. Check deposit receipts carefully to see that all particulars have been properly and accurately filled in

-: Company Fixed

Deposits:-Fixed deposits in companies that earn a fixed rate of return over a period of time are called Company Fixed Deposits. Financial

institutions and Non-Banking Finance Companies (NBFCs) also accept such deposits. Deposits thus mobilized are governed by the Companies Act under Section 58A. These deposits are unsecured, i.e., if the company defaults, the investor cannot sell the company to recover his capital, thus making them a risky investment option.

NBFCs are small organizations, and have modest fixed and manpower costs. Therefore, they can pass on the benefits to the investor in the form of a higher rate of interest.

NBFCs suffer from a credibility crisis. So be absolutely sure to check the credit rating. AAA rating is the safest. According to latest RBI guidelines, NBFCs and companies cannot offer more than 14 per cent interest on public deposits. Company/NBFC Fixed Deposits are rated by credit rating agencies like CARE, CRISIL and ICRA. A company rated lower by credit rating agency is likely to offer a higher rate of interest and vice-versa. An AAA rating signifies highest safety, and D or FD means the company is in default.

Definition:

Company fixed deposit is recently popular instrument to collect the money from Investor to fulfill the company’s financial necessity. “Company fixed deposit is such like gadget by which it offers a high return investment scheme to investors for fulfilling its financial requirement for particular time period.”

Types of the Company Fixed Deposits

Company Fixed Deposits forms is available through various broking agencies or directly with the companies. Jaiprakash Association Ltd., Tata Financial Services ltd. Alliance Capital Private Ltd. Birla, Cholamandalam, Franklin Templeton is very well known company which provides the company fixed deposits.

There are four types of the company fixed deposit. 1. Non Cumulative Deposits (Recurring Deposits) 2. Cumulative Deposits

3. Reinvestment Deposits 4. Callable Fixed Deposits

1. Non-cumulative Deposits (Recurring deposits):

Company provides two types of non-cumulative deposits. One is monthly income deposits and other is Quarterly income deposits. In India most of the companies provide this two typed FDs.



Monthly income deposits:

In Monthly income deposits investors invest their money in company on particular time which is one Month. Company paid the interest every month. The interest is paid constantly every month.



Quarterly income deposits:

In this Scheme interest is paid once every quarter. In Quarterly income deposits, you can choose the minimum amount you want to save every month ranging from Rs. 100/- to Rs. 1,000/- .The chosen

amount will be the core amount and you can deposit up to ten times of the core amount every quarter.

2. Cumulative Deposits:

The Cumulative Benefit Deposit Scheme has various customer-convenient features. You can invest any amount, anytime You can choose any from a combination of four plans. 6months,1 years, 2 years and 3 or more than 3 years.

The minimum deposit is Rs. 100/-. Higher deposits should be in multiples of Rs. 5/-.

To know more about this two schemes. Let’s take example of Jaiprakash Associates Ltd. FDs schemes.

Jaiprakash Associates ltd.

JP association provides Non-cumulative FD schemes and cumulative FD schemes. In Non-cumulative FD Schemes Company put Scheme A

for Monthly Income Plan and B for Quarterly Income Plan. Company put schemes C for Cumulative FD plan.

FIXED DEPOSIT SCHEMES

NON-CUMULATIVE DEPOSITS

TABLE-2

TABLE-3

SCHEME B

QUARTERLY INCOME PLAN

Period Mini. Amount(Rs.) Rate of

Interest (%)

1yrs. 10000 11.00%

2yrs. 10000 11.50%

3yrs. 10000 12.00%

SCHEME A

MONTHLY INCOME PLAN

Period Mini. Amount(Rs.) Rate of

Interest (%)

1yrs. 15000 11.00%

2yrs. 15000 11.50%

 Additional amounts in multiples of Rs.1000/-.

 Interest on quarterly income plan is compounded monthly and

paid quarterly.

 Post dated interest warrants on FDs for each financial year will be dispatched in advance along with the FDs receipts (schemes A& B).

 Special Rate: An additional rate is 0.50% per annum shall be paid to (a) Senior citizens above the age of 60 yrs. (b)

Shareholders of JAL (mini. 100 shares) (c) employee of Jaypee Group.

CUMULATIVE DEPOSITS

TABLE-4

 Additional amounts in multiples of Rs.1000/-.

 Maximum amount per investor for six months’ duration- Rs. 10

lacs.

 Interest compounded monthly on deposit of year or more.

 Special Rate: An additional rate is 0.50% per annum shall be paid to (a) Senior citizens above the age of 60 yrs. (b)

Shareholders of JAL (mini. 100 shares) (c) employee of Jaypee Group.

S.K.S.B.M. PATAN 56

SCHEME C

Period Mini.

Amount(Rs.) Category Maturity(Rs.)Payable on YIELD (%)

6Months 10000 General 10550 11.00 Special 10575 11.50 1 yrs. 10000 General 11157 11.57 Special 11213 12.13 2 yrs. 10000 General 12572 12.86 Special 12697 13.48 3 yrs. 10000 General 14308 14.36 Special 14522 15.07

3. Reinvestment

A Reinvestment Deposit Plan basically allows you to reinvest the interest earned on your deposit. If you would like to retain your deposits and accumulate it with interest, you can apply for a Reinvestment Deposit Plan. You could use these deposits to meet any expenditure in the future... children's education and marriage.

The features of a Reinvestment Deposit Plan.  The interest on your deposit also earns interest.

 You can avail loans of up to 85% on the principal and also on the

interest accrued.

 You can close your deposit prematurely without any difficulty.

 The minimum deposit amount is Rs. 1,000/-. Initially deposits should be made only in multiples of Rs. 100/-. Renewals can be made in any amount.

3. Callable Fixed Deposits:

It is a principal protected deposit which offers a fixed coupon rate and can be early terminated at the bank’s discretion. Investors get higher interest rate than that available on traditional time deposits and 100% capital protection at maturity.

INVESTMENT OBJECTIVES



Company fixed deposits suitable for an increase in

investment:-A Company/NBFC Fixed Deposit provides for faster appreciation in the principal amount than bank fixed deposits and post-office

schemes. However, the increase in the interest rate is essentially due to the fact that it entails more risk as compared to banks and post-office schemes.



Company fixed deposits suitable for

Company/NBFC Fixed Deposits are suitable for regular income with the option to receive monthly, quarterly, half-yearly, and annual interest income. Moreover, the interest rates offered are higher than banks.



company deposit protect against

inflation:-A Company/NBFC Fixed Deposit provides you with limited protection against inflation, with comparatively higher returns than other

assured return options.



Borrow against a company fixed

You can borrow against a Company/NBFC Fixed Deposit from banks, but it depends on the credit rating of the company you have invested in. Moreover, some NBFCs also offer a loan facility on the deposits you maintain with them.

Investment Drawbacks:



Company fixed deposits are unsecured instrument

while company become

bankrupt:-Company Fixed Deposits are unsecured instruments, i.e., there are no assets backing them up. Therefore, in case the company/NBFC goes under, chances are that you may not get your principal sum back. It depends on the strength of the company and its ability to pay back your deposit at the time of its maturity. While investing in an NBFC, always remember to first check out its credit rating. Also, beware of NBFCs offering ridiculously high rates of interest.



No guarantee of returns of company fixed deposits if

stock markets are

down:-If the Company/NBFC goes under, there is no assurance of your principal amount. Moreover, there is no guarantee of your receiving the regular-interval income from the company. Inflation and interest rate movements are one of the major factors affecting the decision to invest in a Company/NBFC Fixed Deposit. Also, you must keep the safety considerations and the company/NBFC's credit rating and credibility in mind before investing in one.



Company FD cannot be sold in the secondary

market:-A company/NBFC Fixed Deposit can only be encased at the Company/ NBFC it was invested in.

How can invest in company Fixed Deposits?

Investor has to fill the application form completely and assure that all the columns should be filled up carefully, neatly and sign on every correction if any.

After filling the form, investor should join the cheque favoring the COMPANY NAME and crossed “Account Payee only “should be deposited with particular bank mentioned by the F.D.Department. If investor has not particular bank account, he or she can send demand draft directly to F.D. Department of Company.



BUYING, SELLING, AND HOLDING

How can buy Company Fixed Deposit?

Company Fixed Deposits forms is available through various broking agencies or directly with the companies. Similar is the case for the NBFCs.

Some of the options available are:

-- Monthly income deposits, where interest is paid every month. -- Quarterly income deposits, where interest is paid once every quarter.

-- Cumulative deposits, where interest is accumulated and paid along with the principal at the time of maturity.

-- Recurring deposits, similar to the recurring deposits of banks.

The minimum investment for Company Fixed

Deposit:-Minimum investment in a Company/NBFC Fixed deposit varies from company to company. Normally, the minimum investment is Rs 5,000. For individual investors, there is no upper ceiling. In case of recurring deposits, the minimum amount is normally Rs 100 per month.

Duration of he Company Fixed Deposit

Scheme:-Company/NBFC Fixed Deposits have varying duration; they may vary from a minimum of 6 months to 5 years or even more.

Determination of Market Value of Company Fixed Deposit

OBJECTIVES OF FIXED DEPOSITS



Guaranteed return of Principal

amount:-Here in both the cases, may it be fixed deposit or fixed deferred annuity, security of the investment is the key feature. In case of fixed

deposits principal amount is guaranteed by the government. In case where the amount is huge one may exercise the option of risk cover while getting into the contract with the banking institution.

Deferred fixed annuities are not as secure as the fixed deposits with

the banks as they are not guaranteed by the government, but the risk feature remains very low as the company provides the customer with full insurance cover. Even in the INDIA, the annuities are not guaranteed by the government as it is the case with fixed deposits up to a certain limit. Fixed deferred annuities are solely reliable on the smooth running of the companies business. So while fulfilling your security objective you must keep in view the financial reliability of the company so that you do not get into contract with a poor performing company.



Short term investment

:-Considering that the time frame that one needs to invest for is short in nature then investing in fixed deposits will prove a better investment as accumulation here will be more than the deferred annuity plans. Fixed deferred annuity plans in there beginning years require lot of expenditure in there proper allocation and processing so they do not give attractive returns to the short term investors. Fixed deposits are ideal in short term as they have maturity period ranging from a single month to a couple of years.



Long term investment

:-Deferred fixed annuity is certainly a specialized product offering for a

long term investor as the accumulation structure suits to the retirement needs. These annuity plans are flexible during the payout, in some plans the annuity is paid to the legal heirs or the nominee for his/her lifetime even after the death of the contract holder.



Interest Return on investment

:-fixed deposits may offer a specified rate of interest for a :-fixed period of time but the rates cannot remain the same forever, rates do change as per the real market scenario and the policy decisions on a continues basis. No institution guarantees the renewal interest rates, generally for shorter durations low rates are offered than the long term contracts in case of fixed deposits.

As far as deferred annuity plans are concerned there is a fixed minimum payout which is guaranteed by the insurer for the initial few years after which the accumulation depends on the performance of the fund in the market. In case of fixed annuity plans the rate of interest to be returned to the investor keeps on fluctuating as per the market condition after the initial lock-in period which guarantees the rate of return.



Tax

Savings:-When income tax becomes the cause of concern, it is suggested for an investor to go for fixed rate deferred annuity plans as the tax is also calculated on the deferred date and the interest is accumulated for the complete term till maturity. On the other hand income tax is charged simultaneously on the fixed deposits.

Other important factors which should be considered by an investor while selecting his investment instrument are Liquidity options, distribution options on maturity and one must also read and understand the offer document with utmost clarity.

BENEFITS OF FIXED DEPOSITS



Safety:-Fixed Deposit is virtually risk-free. The initial sum of money that you invest is returned to you with interest when Fixed Deposit matures and the interest rate is guaranteed. With other types of investments,

interest rates may fluctuate and your initial investment amount is usually not guaranteed



Regular

Income:-Fixed deposits earn fixed interest rates for their entire tenure, which is usually compounded quarterly. So, those who want an income on a regular basis can invest into fixed deposits and use the interest rate as their income. This makes a fixed deposit very popular way of investing money for retirees.



High Return compare than traditional

savings:-Fixed Deposits generally give you a higher rate of interest than traditional savings accounts, and the rates that offer are competitive.



Saves

tax:-With the directives of the income tax department stating that investment in fixed deposits up to a maximum of Rs.100,000 for 5 years are eligible for tax deductions under section 80 C of income tax act, fixed deposits have again become popular. Fixed deposits save tax and give high returns on invested money.



Easy

Withdrawal:-The option to withdraw the deposit at any time before maturity

without any difficulty and you can get loans up to 85% of the principal.

DRAWBACKS OF FIXED DEPOSITS



Lower rate of returns compare with Stock

Market:-While the money invested in stock markets may give you a return of