Financial Sectors

Financial Sectors

Financial sector

• The financial sector is a section of the economy made up of firms and institutions that provide financial services to commercial and retail customers.
• A strong financial sector is a sign of a healthy economy. The financial sector generates a good portion of its revenue from loans and mortgages and thrives in a low-interest-rate environment.
• The sector is comprised of many different industries including banks, investment companies, insurance companies, and real estate firms.

8 Finacial sectors

Gold

Banking Sector

Stock Market

PPF

Post Offoce Savings

Mutual Funds

Real Estate

Life Insurance

BANKING SECTOR

Introduction

• The banking industry is the foundation of the financial services group.
• It is most concerned with direct saving and lending, while the financial services sector incorporates investments, insurance, the redistribution of risk, and other financial activities.
• Banking services are provided by large commercial banks, community banks, credit unions, and other entities.

Merits

Demerits

• Low Return
• No Tax Benefits
• Penalty Prematurity Withdrawal
• Long Term Process

• Safty & Security
• Fixed & Assured Returns
• Easy Liquidity
• Loan Facility
• Digitalization
• Regulated By RBI

STOCK MARKET

Introduction

A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind.

Demerits

Merits

• High Risk Involved
• Highly Volatile
• Huge Market Knowledge Required
• Necessity of Demat Account
• No Tax Benefits
• Insider Trading
• Brokerage Charges

• High Chances Of Returns
• Easy Liquidity
• Ownership Benefits
• Global Approach
• Varities Of Options Available
• Dividend Income
• Regulated By SEBI

MUTUAL FUNDS

Introduction

A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates.

Merits

Demerits

• Moderate Returns
• Moderate Liquidity
• Varieties Of Option Available
• Professional Assistance
• Regulated By SEBI

• Subject To Market Risk
• No Tax Benefits
• High Commission Charges
• Market Knowledge Required

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REAL ESTATE

Introduction

• The real estate sector is one of the most globally recognized sectors.
• It comprises of four sub-sectors - housing, retail, hospitality, and commercial.
• The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodation.

Merits

Demerits

• Low Return
• No Tax Benefits
• Huge capital Required
• Brokerage Charges
• Maintenance Charges
• Low Liquidity

• Secondary Income
• Loan Facility
• Inflation Cover

• Decent Returns On Investment

POST OFFICE SAVINGS

Introduction

The Post Office savings bank is the oldest and by far the largest banking system in the country, serving the investment need of both urban and rural clientele. These services are offered as an agency service for the Ministry of Finance, Government of India. Several products on offer serve various investment requirements of the customers.

Merits

Demerits

• Low Return

• Penalty Prematurity Withdrawal
• Long Term Process

• Safty & Security
• Fixed & Assured Returns
• Easy Liquidity
• Tax Benefits

• Regulated By RBI

GOLD

Introduction

• The banking industry is the foundation of the financial services group.
• It is most concerned with direct saving and lending, while the financial services sector incorporates investments, insurance, the redistribution of risk, and other financial activities.
• Banking services are provided by large commercial banks, community banks, credit unions, and other entities.

Merits

Demerits

• Low Return
• No Tax Benefits
• Penalty Prematurity Withdrawal
• Long Term Process

• Gold is hedge against inflation
• Easy liquidity
• Diversification
• Hold its value over long period of time
• Most desired commodity

PPF

Introduction

• The Public Provident Fund (PPF) scheme is a

very popular long-term savings scheme in India because of its combination of tax savings, returns, and safety.

• The PPF scheme was launched in 1968 by the

Finance Ministry's National Savings Institute.

• The main objective of the scheme is to help

individuals make small savings and provide returns on the savings.

• The PPF scheme offers an attractive rate of

interest and no tax is required to be paid on the returns that are generated from the interest rates.

Merits

Demerits

• Low Return
• No Tax Benefits
• Penalty Prematurity Withdrawal
• Long Term Process

• Safty & Security
• Fixed & Assured Returns
• Easy Liquidity
• Loan Facility
• Digitalization
• Regulated By RBI

INSURANCE

Introduction

• Insurance is a contract (policy) in which an insurer indemnifies another against losses from specific contingencies or perils. 1
• There are many types of insurance policies.
• Life, health, homeowners, and auto are the most common forms of insurance.
• The core components that make up most insurance policies are the deductible, policy limit, and premium.

Merits

Demerits

• Low Return
• No Tax Benefits
• Penalty Prematurity Withdrawal
• Long Term Process

• Safty & Security
• Fixed & Assured Returns
• Easy Liquidity
• Loan Facility
• Digitalization
• Regulated By RBI

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