investment options to retail investor

1. Which kind of investment
options gain importance for
retail investor when inflation is
expected to rise.

2. When inflation rises?
 Hyper inflation occurs when a country experiences very high
and usually accelerating rates of inflation.
 rapidly eroding the real value of the local currency , and
causing the population to minimize their holdings of the local
money.

3.  The population normally switches to holding relatively
stable foreign currencies.
 Under such conditions ,the general price level within an
economy increases rapidly as the official currency
quickly loses real value.
 The value of economic items remains relatively more
stable in terms of foreign currencies.

4. Inflation is Low it effects to?
 Low inflation encourages customers to buy goods and
services.
 Delaying will mean that they would have to pay more
for the same product.
Inflation is High it effects to?
 It can be less appealing for foreign investors to invest
in the country concerned

5. When inflation is expected to
rise………………..?

6. Investment………………………
…………………………………?
“ Investment is the value of machinery ,plants and buildings that are bought
by firms for production purpose.
• Investment plays macroeconomic roles:
• 1. Domestic Expenditure.
• 2.investment enlarges the production capacity.
• 3.it modernizes production process, improving cost effectiveness.
• 4. it reduces the labor needs for unit of out put.
• 5.it allows for the production of new products.

7. Variables are impact on
investment:
• There are some variables are impact on investment.
Those are
• 1. Employment.
• 2.Bussiness Cycle Behavior.
• 3.Internal Factors.

8. • Who is retail investor?
• What is another name for retail investor?
• What type of investments does retail investor do?
• Is there any short term investments?
• Any long term investments?

9. INVESTMENTOPTIONS
SHORT TERM INVESTMENT
1. Savings Bank Account
o Saving accounts are accounts maintained by retail financial
institutions that pay interest but cannot be used directly as money in the
narrow sense of a medium of exchange.
o Often the first banking product people use, savings accounts offer low
interest (4%-5% p.a.), making them only marginally better than safe
deposit lockers.

10. 2. Money Market Funds (also known as liquid funds)
• Money market funds are a specialized form of mutual funds that invest in
extremely short-term fixed income instruments.
• Unlike most mutual funds, money market funds are primarily oriented
towards protecting your capital and then, aim to maximise returns.
• Money market funds usually yield better returns than savings accounts, but
lower than bank fixed deposits.
• With the flexibility to issue cheques from a money market fund account
now available, explore this option before putting your money in a savings
account.

11. 3. Bank Fixed Deposit (Bank FDs)
• For investors with low risk appetite, best for 6-12 months investment
period .
• Also referred to as term deposits, this product would be offered by all
banks. Minimum investment period for bank FDs is 30 days.
• The ideal investment time for bank FDs is 6 to 12 months as normally
interest on bank less than 6 months bank FDs is likely to be lower than
money market fund returns.
• It is important to plan your investment time frame while investing in this
instrument because early withdrawals typically carry a penalty.

12. LONG TERM INVESTMENTS
1. Post Office Savings Schemes (POSS)
• POSS are popular because they typically yield a higher return than bank
FDs.
•
• The monthly income plan could suit you if you are a retired individual or
have regular income needs.
• Besides the low (Government) risk, the fact that there is no tax deducted at
source (TDS) in a POSS is amongst the key attractive features.
• The Post Office offers various schemes that include National Savings
Certificates (NSC), National Savings Scheme(NSS), Kisan VikasPatra,
Monthly Income Scheme and Recurring Deposit Scheme.

13. 2. Public Provident Fund (PPF)
• The Public Provident Fund is savings-cum-tax-saving instrument in India,
introduced by the National Savings Institute of the Ministry of Finance in
1968.
• The aim of the scheme is to mobilize small savings by offering an
investment with reasonable returns combined with income tax benefits.
• The public provident fund is established by the central government. One
can voluntarily open an account with any nationalized bank,selected
authorized private bank or post office. The account can be opened in the
name of individuals including minor.
• The minimum amount is Rs.500 which can be deposited. The rate of
interest at present is 8.7% per annum.

14. 3. Company Fixed Deposits (FDs)
• A fixed deposit (FD) is a financial instrument provided by banks which
provides investors with a higher rate of interest than a regular savings
account until the given maturity date.
• It may or may not require the creation of a separate account. It is known as
a term deposit or time deposit.
• Some banks may offer additional services to FD holders such as loans
against FD certificates at competitive interest rates.
• It's important to note that banks may offer lesser interest rates under
uncertain economic conditions.

15. REFERENCES
• www.investopedia.com
• wikipedia.org/wiki/Hyperinflation
• http://www.moneycontrol.com/