SEMINAR

1. SEMINAR
AKHIL LAL P
MBA-
MCMAT
Sub: Investing surplus cash in marketable security
(cont...)

2. What is short term
investment?
 Any investment option which is less than 5 years is
considered as a short term investment
 Short term can range anything from few days to few
months to few years as per your requirements and
financial objectives.
 Short term investments are usually done with a lesser
amount of money to yield a constant or slightly variable
returns but not so high returns, with relatively lower
risk factor involved.

3. Types of short term investment
opportunities...
 Treasury bills
 Commercial papers
 Certificates of deposits
 Bank deposits
 Inter-corporate deposits
 Money market mutual funds

4. Treasury bills...
 Treasury bills represent short-term borrowings of the
Government.
 A treasury bill is nothing but a promissory note issued by
the Government under discount for a specified period
stated therein.
 The Government promises to pay the specified amount
mentioned therein to the bearer of the instrument on the
due date.
 Treasury bills are issued for meeting temporary
Government deficits

5. Commercial papers...
 Commercial paper consists of short-term, unsecured
promissory notes issued by well-known and financially
strong companies.
 Commercial paper is traded mainly in the primary
market. Opportunities for resale in the secondary
market are more limited.
 Commercial paper is usually sold at a discount from
face value, and carries higher interest repayment rates
than bonds.

6. Certificates of deposits...
 Certificates of deposit are short term deposit
instruments issued by banks and financial institutions
to raise large amount of money.
 This scheme was introduced in July 1989, to enable the
banking system to mobilise bulk deposits from the
market, which they can have at competitive rates of
interest.
 The Certificate of Deposits may be issued at a discount
on face value.

7. Bank deposits...
 A deposit account is a saving account , current account
or any other type of bank account that allows money to
be deposited and withdrawn by the account holder.
 Deposits are the major source of funds for banks.
 The normal accounts are current, savings, recurring,
and fixed account.

8. Inter-corporate deposits...
 Inter-corporate deposits are deposits made by one
company with another company, and usually carry a
term of six months. These deposits are made by
corporate having surplus funds to cash starved
companies.
 the risk involved is higher. Also, since the cost of
funds(interest rates) are much higher for a corporate
than a bank

9. Money market Mutual funds...
 Money market mutual funds (MMMFs) focus on short-
term marketable securities such as TBs, CPs, CDs or
call money.
 They have a minimum lock in period of 30 days, and
after the period, an investor can withdraw money at
any time at a short notice.
 MMMFs are recently offered UTI, IDBI etc..

10. Thank
you....