2. What is NFLAT
• This is a first of its kind national level test,
conducted by the National Centre for Financial
Education (NCFE), to measure the level of
financial literacy among school students.
Through this test NCFE aims to encourage
school students to obtain basic financial skills
which are essential for their full participation
in society.
3. Financial Lieracy
Money Matters
• Understand the concept of money
– a current medium of exchange in the form of coins
and banknotes; coins and banknotes collectively.
• Money as a medium of exchange and medium
of storage
• Understanding the concept of net worth
– Understand the difference between money and
wealth
– Difference between Assets and Liabilities
4. Budgeting
Balancing the Means and the Ends
• Know the different sources of income
– Professional income
– Investment income
– Active income
– Passive income
• Understanding expenses
– Regular and lump sum expenses
• Deficit
• Excess
• Savings- understand the diff between savings and
investment
6. • What is Budget
• What is opportunity cost
• the opportunity cost of a choice is
the value of the best alternative forgone, in a
situation in which a choice needs to be made
between several mutually
exclusive alternatives given limited resources.
7. Understanding Insurance and Risk
management
• Understand the difference between pure risk and investment risk
• Pure risk: A category of risk in which loss is the only possible
outcome; there is no beneficial result. Pure risk is related to events
that are beyond the risk-taker's control and, therefore, a person
cannot consciously take on pure risk.
• Investment risk:
– The greater return you want, the more risk you'll usually have to
accept
– The more risk you take with your investments, the greater the chance
of losing some or all of your initial investment (your capital)
• Know that insurance premium is an expense
• Understanding insurance products: Life insurance and General
Insurance
8. Insurance terminology
• Indemnity- an amount paid to the individual
• Sum assured
• Premium
• Risk cover
• Human life value: The human life
value calculator helps you assess the financial
loss your family would incur if you were to die
today.
9. Life Insurance
• The term plan- pure term
• Hybrid plans combining insurance and
Investment: Endowment plan, money back
plan, whole life plans, ULIPs and Pension plans
11. Understanding Investment
• Need for investment
• Diversification as a risk mitigation tool
• Liquidity meaning
• Learn about growth of money and returns
12. Inflation
• Impact of inflation in short term and longterm on
the personal financial plan
• Understand the real rate of returns
• CPI and WPI
– WPI: reflects average price changes of goods that are
bought and sold in the wholesale market
– CPI: CPI measures price change from the perspective
of the retail buyer. It is the real index for the common
people. It reflects the actual inflation that is borne by
the individual
13. Inerest
• Types of interests
– Simple interest
– Compound interest
• Rule 72 and rule 144
• Understand the effective interest rate and
nominal interest rate
– Nominal interest rate - Inflation= Effective Interest
rate
16. Basics of banking
• Know the type of banks and facilities offered
by the banks
• Types of bank accounts: savings, current ac,
RD acc, FD ac etc
• Documents needed for opening an account
with bank
• PAN card and its importance in operating bank
accounts
17. Cheques
• What is account payee cheque
• Signing and validity of cheque
• Precautionary measures while handling
cheque
• Understand how we get money by depositing
at a bank
18. Demand Draft
Demand Draft is a cheque that contains an order of
one branch of a bank ( Drawer branch ) directing
another branch of the same bank ( Drawee
branch ) to pay on demand a certain sum of
money to a specified beneficiary ( Payee ) . It is
an Account payee instrument, meaning it can
only be credited to the account of the payee and
cannot be encashed over the counter by the
payee.
• Difference between DD and Cheque
19. ATM
• Benefits of using an ATM card
• What is ATM PIN
• Precautions on using an ATM card
• Telebanking
• Internet banking
20. RBI and SBI?
• Functions of RBI
• Functions of SBI
• Nationalized banks
• Private sector banks
• MNC banks
• know about Nigerian scam and scam emails
21. Understanding borrowing
• What is EMI and its parameters: Principle,
interest, loan tenure
• Concept of amortization
• Know how much to borrow
• 70:30 rule
• Credit cards- advantage and disadvantages
and precautions while using credit cards
22. Loans
• Types of loans: personal loan, vehicle loan,
housing loan, education loan, business loan,
term loan
• Interest rates, term of loan, floating or fixed
interest rate loan
• Loan processing charges
• Pre closure of loan
• CBIL rating
23. Stocks and Bonds
• Equities, debentures
• Mutual funds
• Primary market
• Secondary market
• Stock exchange- BSE and NSE/ NIFY and Sensex
• Value of share
• EPS and share value
• IPO
