WELCOME TO ALL FOR INVESTOR AWARENESS PROGRAM BY: PREETAM KUMAR NJ INDIA INVEST PVT. LTD. BRANCH MANAGER RANCHI

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1 . WELCOME TO ALL FOR INVESTOR AWARENESS PROGRAM BY: PREETAM KUMAR NJ INDIA INVEST PVT. LTD. BRANCH MANAGER RANCHI

2 POST RETIREMENT PLANNING

3 Agenda Understanding Concept Of Post Retirement 5 Investment Products For Retired Features Of Those Investment Products Which Is The Best Option For Retired Why A Family Fails To Create Wealth Success Mantra Of Today

4 Concept of Post Retirement Retirement is the point where a person stop employment completely A Shift from one activity to another activity Unproductive-No more Income. 365 days of Holiday Too Much of Time Health Issue Retirement is the climax of life with Proper Planning we can make it a happy ending else!!

5 .

6 Investment Products for Retired 1.Senior Citizens Savings Scheme (SCSS) 2.Monthly Income Scheme (MIS) 3.Bank Fixed Deposit (FD) 4.Secondary Market Bond (SMB) 5.Mutual Funds (MF) Liquid Fund Monthly Income Plan With SWP Balance or Balance Advantage Fund With SWP

7 But Before Investment About Something!

8 Investment Features Safety Return Liquidity Tax Benifit Tax Free Regular Income Capital Apreciation

9 Investment Option No.1

10 Senior Citizens Savings Scheme What is SCSS? SCSS is a scheme that is exclusively for Senior Citizens (aged 60 yrs or more) SCSS Provides Regular Income on a Quarterly basis. At the end of Term you will get your Deposit Amount Back Term and Interest Rate Maturity Period for this scheme is 5 Years Current annual interest rate is 8.4% Deposit Limits Minimum is Rs.1,000/Maximum is Rs.15 lakh

11 Senior Citizens Savings Scheme Tax Benifits In Section 80C (Up to Rs.1.5 Lakh) TDS-Interest received more than Rs in year Interest received is Taxable as per your Income Tax slab Where do you open the account Post Offices,Nationalised Banks or Private Banks Extension Period and Premature Closure After maturity the account can be extended for 3 years After 1 year 1.5% and after 2 yrs 1% of deposit amount

12 Senior Citizens Savings Scheme Investment Features Safety: Full Liquidity: Money Gets Locked for 5 years Return : 8.4% Interest is Taxable as per slab (If slab is 10%) After Tax Return: 7.56% Inflation: 7% Net Return after Tax and Inflation: 0.56% Regular Income : Yes Capital Appreciation : No

13 Investment Option No.2 Monthly Income Scheme (MIS)

14 Monthly Income Scheme What is MIS MIS is a Scheme that Provides Regular Monthly Income Every Month you will receive the Interest Till End of Tenure At the End of Tenure you will get your Deposit Amount Back Term and Interest Rate Maturity Period is 5 years in This Scheme The Interest Rate is 7.6% Per Annum Deposit Limits For a Single Account the Maximum is 4.5 Lakh For a Joints Account the Maximum is 9 Lakh

15 Monthly Income Scheme Tax Benefits In Section 80C (No Tax Benefits) No TDS (Tax Deducted as Source) under this scheme Interest is Taxable as per your Income Tax Slab Where Can be open the Account In Indian Post Office Premature Closure After 1 Year the account can be closed Before 3 Years 2% of Deposit Amount After 3 Years 1% of Deposit Amount

16 Monthly Income Scheme (MIS) Investment Features Safety : Full Liquidity : Money Gets Locked for 5 years Return : 7.6% Interest is Taxable as per slab(if slab is 10%) After Tax Return : 6.83% Inflation : 7% Net Return after Tax and Inflation : -0.16% Regular Income : Yes Capital Appreciation : No

17 Investment Option No. 3 Bank Fixed Deposit

18 Bank FD (TDR-Interest Payout) What is TDR? TDR is a type of Fixed Deposit where you can choose to receive the interest either Monthly or Quarterly At the end of tenure you will get your Deposit Amount Back Term and Interest Rate Minimum Term - 7 Days Maximum Term 10 Years Interest Rate Average 6.50% To 8.00 % Maximum Limits No Maximum Limits

19 Bank FD (TDR-Interest Payout) Tax Benefits In Section 80C (up to Rs. 1.5 Lakh) TDS (If the interest received is more than 10000) Interest received is Taxable as per your IT slab Extension Period After Maturity it can be increased as per Term But the interest may be changed Premature Closure Generally 1% of Deposit Amount

20 Bank FD (TDR-Interest Payout) Features Safety: (Up to 1 Lakh) Liquidity: Money Gets Locked for 5 years Return : 7.0% Interest is Taxable as per slab(if slab is 10%) After Tax Return: 6.30% Inflation: 7% Net Return after Tax and Inflation: -0.70% Regular Income: Yes Capital Appreciation: No

21 Investment Option No. 4 Secondary Market Bonds

22 Secondary Market Bonds What is Secondary Market Bonds Secondary Market Bonds are Bonds issued by PSUs Banks or Corporates to raise money for their business These Bonds traded in Wholesale Debt Market (WDM)and hence called Secondary Market Bonds These Bonds are available at various yields depending their tenure,credit rating etc The Yields on these bonds keeping changing with change in Bond Prices in WDM

23 Secondary Market Bonds Secondary Market Bonds on Sale at NJ At NJ,We are selling SMB of Select PSU Banks These Bonds which have been issued by the PSU Banks due to requirement of capital as mandated by RBI The coupon rate on these bonds are around 10%-11%, while the current yield are 9%-10% These Bonds are having a maturity of 5-10 Years These Bonds pay interest Annually basis and the price of 1 bond is 10 lacs

24 Secondary Market Bonds

25 Secondary Market Bonds Features Easy To Invest No TDS No Requirement of Form 15G/15H High Liquidity Completely Paperless in Demat Format Interest credited Directly to Client bank account Strong PSU Brands with Zero defaults Interest is Taxable as per slab

26 Secondary Market Bonds Investment Features Safety: Full Liquidity: Money Gets Locked for 5 or 10 Years Return : 10.0% Interest is Taxable as per slab(if slab is 10%) After Tax Return: 9.0% Inflation: 7% Net Return after Tax and Inflation: 2.0% Regular Income: Yes Capital Appreciation: No

27 Advantage & Disadvantage Advantage Safe Investment Guaranteed Returns Regular Income Monthly or Quarterly or Annualy Peace of Mind During Retirement Life Disadvantage Interest Rate is not Attractive now Interest is Taxable as per slab TDS upon some product Liquidity Problem At the end of Term you will get your Deposit Amount Only

28 Investment Option No. 5

29 History of Mutual Funds The Mutual Fund industry in India started in 1963 with the formation of UTI, at the initiative of the Government of India and Reserve Bank of India. The History of Mutual Funds into four phases First Phase: (Only UTI) Second Phase: (SBI,GIC,PNB etc.) Third Phase: ( Reliance,Hdfc,Birla,ICICI) Fourth Phase: Since February 2003

Mutual Fund (MF) Concept A common pool of money into which investors place their contribution This money is to be invested according to the pre-stated objectives of the fund

30 Mutual Fund (MF) Concept A common pool of money into which investors place their contribution This money is to be invested according to the pre-stated objectives of the fund Ownership of the fund is joint or mutual amongst all investors - equivalent to the contribution made as a proportion of the overall fund Ownership through holding of units at NAV

31 How Does Mutual Fund Work AMC Savings Investments Trust Units Returns Unit holders Regitrar SEBI Trust Custodian AMC

32 Advantage of Mutual Fund Portfolio Diversification Professional Management Reduction in Risk Liquidity Convenience and Flexibility Regulated by SEBI Attractive Return No Entry Load,No TDS or No 15G/15H Tax Free Return* Access to Information

33 Types of Mutual Fund By Structure Open Ended Can be done Any time Close Ended Can be done NFO only By Investment Objective Equity Fund - Invest largely in Equity Shares Debt Fund Invest in Government or Corporte Debt 1. Liquid Fund 2. Debt Fund Hybrid Fund Invest in both Equity and Debt 1. Monthly Income Plan (MIP) 2. Balance or Balance Advantage Fund

34 . LIQUID FUNDS

35 Money Market Mutual Fund INTRODUCING LIQUID FUNDS

36 Liquid Funds What is Liquid Funds: Liquids Funds are mutual fund schemes,which invest in very short term CP,CD or Treasury bill Liquid Funds DO NOT invest in Equity Market There are no Entry/ Exit charges Minimum Investment period is 1 day LIQUID FUND IS BETTER THAN SAVINGS ACCOUNT INTEREST

37 Features of Liquid Funds Safety of Investment Liquidity (Any Time Money) Better Return Than Savings A/C Interest No Charges For Investment Easy To Invest Easy To Withdrawal

38 TAX BENIFITS IN LIQUID FUNDS For Growth Option BENIFITS MIP Short Term TAX Capital Gain TaxIN - As Per Slab Before 3 Years Long Term Capital Gain Tax 20% With Indexation After 3 Years For Dividend In Dividend option - DDT is 28% It is advisable to invest in the Growth option

39 Liquid Funds Vs Saving A/C Features Savings Account Liquid Fund Safety Full Full Liquidity Always (Anytime) Always (Anytime) Return 3 To 4% 7 To 8% After Tax Return(10%Slab) 2.7 To 3.6% 6.3 To 7.2%

40 Returns of Some Liquid Fund (25th Jan 17) Scheme Name 1yr 2 yrs 3 yrs 5 yrs BSL Savings Fund 9.58% 9.16% 9.31% 9.31% SBI Savings Fund 8.48% 8.30% 8.52% 8.91% HDFC CMF-TAP 8.930% 8.20% 8.28% 8.38% Reliance Money Manager Fund 8.23% 8.09% 8.29% 8.61%

41 INTRODUCING MONTHLY INCOME PLAN

42 MONTHLY INCOME PLAN HYBRID PRODUCTS THAT TAKE EXPOSURE TO DEBT & EQUITY MONTHLY INCOME PLAN AIMS TO STRIKE BETWEEN STABILTY AND GROWTH

43 WHY MONTHLY INCOME PLAN Combination of Debt and Equity Power of diversification Focus on Capital Appreciation with Very Low Volatility Active Management of Portfolio Tax Benefit after 3 Year with Indexation IDEAL FOR INVESTORS WITH A REQUIREMENT OF STABILITY (DEBT) AND GROWTH (EQUITY) OVER THE LONG TERM

44 TAX BENIFITS IN MIP For Growth Option STCGT - As Per Slab Before 3 Years LTCGT 20% With Indexation After 3 Years For Dividend In Dividend Option- DDT is 28% It is Advisable to Invest in the Growth option IDEAL FOR SEEKING TAX EFFICIENT RETURN AND LONG TERM CAPITAL APPRECIATION WITH LOW RISK

45 SWP FROM MONTHLY INCOME PLAN Systematic Withdrawal Plan (SWP) is a service offered by Mutual Funds which provides investors with a specific Amount of payout at a pre-determined time intervals, like Monthly, Quarterly, or Annually Reasons for SWP from Monthly Income Plan : Ideal solution for uncertain investment horizon Regular income To meet living requirement after retirement Tax Effective Return Beat Inflation Capital Appreciation

46 SWP FROM MONTHLY INCOME PLAN SYSTEMATIC WITHDRAWAL PLAN FOR 5 YEARS FROM MONTHLY INCOME PLAN LET'S LOOK AT THE PERFORMANCE OF SWP IN SOME 8% ANNUAL WITHDRAWALTHROUGH MONTHLY ROUTE

47 RETURN OF SOME MIP (25th Jan 17) Scheme Name 1yr 2 yrs 3 yrs 5 yrs BSL MIP Plan II Wealth % 9.57% 15.92% 13.60% SBI Monthly Income Plan 15.20% 10.21% 13.44% 11.57% KOTAK MIP 17.44% 9.19% 13.24% 11.31% HDFC MF MIP-LT 18.53% 8.19% 14.40% 11.61%

48 Monthly Income Plan Investment Features Safety : Not Risky in Long Term Liquidity: Always (Anytime) Return : 10 12% (Expectation) STCGT is as per Income Tax slab before 3 Years LTCGT is 20% with Indexation after 3 Years Inflation :7% Net Return after Tax and Inflation : % Regular Income : Yes Capital Appreciation After Taking SWP of 8%

49 INTRODUCING BALANCED FUND OR BALANCED ADVANTAGE FUND

50 BALANCED FUND HYBRID PRODUCTS THAT TAKE EXPOSURE TO EQUITY & DEBT BALANCED FUND AIMS TO STRIKE A BALANCE BETWEEN GROWTH AND STABILTY

51 HOW DOES BALANCED FUND WORK

52 HOW DOES BALANCED ADV FUND WORK Flexibility to move within the range of 30-80%

53 WHY BALANCED FUND Combination of Equity and Debt Power of diversification Focus on Capital Appreciation Lower Volatility Active Management of Portfolio Tax Free Return after 1 Year IDEAL FOR INVESTORS WITH A REQUIREMENT OF GROWTH (EQUITY) & STABILITY (DEBT) OVER THE LONG TERM

54 TAX BENIFITS IN BALANCED FUND For Growth Option Short Term Capital Gain Tax - 15% Before 1 Year Long Term Capital Gain Tax - Nil After 1 Year For Dividend Option In Dividend option- Dividend Distribution Tax is NIL It is Advisable to Invest in the Both Growth or Div IDEAL FOR SEEKING TAX EFFICIENT RETURN AND LONG TERM CAPITAL APPRECIATION WITH MODERATE RISK

55 SWP FROM BALANCED FUND Reasons for SWP from Balanced Fund : Ideal solution for uncertain investment horizon Regular income To meet living requirement after retirement Tax Effective Return Beat Inflation Capital Appreciation BALANCE FUND WITH SWP IS ADVISABLE FOR RETIRED PERSON WHO WANTS REGULAR INCOME FOR LONG TERM

56 SWP FROM BALANCED FUND SYSTEMATIC WITHDRAWAL PLAN FOR 10 YEARS FROM BALANCED FUNDS LET'S LOOK AT THE PERFORMANCE OF SWP IN SOME BALANCED 8% ANNUAL WITHDRAWAL THROUGH MONTHLY ROUTE

57 Returns Of Some Balance /Balance Adv Fund As On 25th Jan 17 Scheme Name BSL Balance Adv Fund 1yr 3 yrs 5 yrs 7 yrs 26.76% 16.97% 13.44% 10.29% SBI Magnum Balance Fund 12.78% 18.56% 18.22% 12.02% RRSF - Balance Option 13.21% 18.95% 16.42% 12.54% HDFC Balance Fund 20.76% 21.37% 17.71% 16.50%

58 SWP FROM BALANCED FUND Investment Features Safety : Not Risky in Long Term Liquidity: Anytime Return : 12 15% (Expectation) STCGT is 15% before 1 Year LTCGT is NIL after 1 Year Inflation :7% Net Return after Tax and Inflation : 5 8% Regular Income : Yes Capital Appreciation After Taking SWP of 8%

59 BALANCED FUNDS IS THE TRUE WEALTH CREATING INSTRUMENT

60 Which Is The Best Option for Retired

61 Which Is The Best Option for Retired OPTION RETURNS NET RETURN AFTER TAX AND INFLATION REGULAR INCOME SENIOR CITIZENS SAVINGS SCHEME 8.5% 0.65% QUARTERLY % MONTHLY -0.72% MONTHLY OR QUARTERLY 2% ANNUALY 2 TO 4% MONTHLY OR QUARTERLY 5 TO 8% MONTHLY OR QUARTERLY MONTHLY INCOME SCHEME BANK FIXED DEPOSIT IDBI SECONDARY MARKET BONDS Guaranteed 7.7% Guaranteed 7.25% Guaranteed 10% Guaranteed MONTHLY INCOME PLAN 10-12% BALANCED FUND 12-15% Expected Expected

62 Which Is The Best Option for Retired SENIOR CITIZEN SAVING SCHEME NO POST OFFICE - MIS NO BANK FIXED DEPOSIT NO SECONDARY MARKET BONDS YES MUTUAL FUND- MIP/BALANCE FUND YES

63 Why a Family Fails To Create Wealth? Not Proper Planning Delay In Investment Lack Of Financial Education Choose The Wrong Type Of Product Not Consult With Financial Advisor Not Keep Patience

64 Success Mantra Of Today Always Consult With Financial Advisor Don't Put All Your Eggs In One Basket Choose The Right Asset Class Don't Delay In Investment Increase Your Knowledge Level

65 Success Mantra Of Today IF YOU HAVE PATIENCE AND CONVICTION NO BODY CAN STOP TO MAKE YOUR MONEY

66 . Wish You All For Happy Post Retirement By: Arvind Kumar Dipak

67 . By: PREETAM KR.

JAN FEB MARCH THE SEASON OF WORRIES FOR TAX PLANNING

JAN FEB MARCH THE SEASON OF WORRIES FOR TAX PLANNING How much tax I can save? Where do I invest to save tax? Do I invest only to save tax? I do not have enough money right now to invest. Invest under sec.