Financial sectors of India are described with merits and demerits of each sector given below in brief.

1. FINANCIAL INDIAN
SECTOR
By: Tarushi Rana
G.L. Bajaj

2. Financial
Indian Sectors
Share Market Mutual Fund Real Estate Insurance
Bank Fixed
Deposit
Provident
Fund(PF)
Post Office Gold

3. SHARE MARKET
 Buying and selling of the shares.
 Governed by SEBI( Securities and Exchange Board
Of India)
 The share market is a platform where buyers and
sellers come together to trade on publicly
listed shares during specific hours of the day.

4. Long term
finance
Unlimited
opportunity of
investment
Economic
Stability
Raising of new
capital
Easy to
participate
Dividend
Liquidity
High Risk
Fluctuations in
market price
Limited control
Residual Chain
Choice overload
Not for short
term
Merits Demerits

5. MUTUAL FUNDS
 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.

6. Professional
Management
Diversification
Higher
Liquidity
Cost efficient Tax benefits
Income
reinvestment
Safety
No control
over portfolio
Management
fee
No gurantee
on returns
Lock-in Period
Subjected to
market risks
Over
Diversification
Hidden or 12b-
1 fee
Merits Demerits

7. REAL ESTATE
 Real estate is defined as the land and any permanent
structures, like a home, or improvements attached to
the land, whether natural or man-made.
 Real estate is a form of real property. It differs from
personal property, which is not permanently attached
to the land, such as vehicles, boats, jewelry,
furniture, and farm equipment.

8. High Cost Investment
Long Term Investment
Liquidity Constraints
Maintenance costs
Legal Difficulties
Tangible Asset
Tax Benefit
Complete Control
Steady Cash Flow
Rental Income
Merits Demerits

9. INSURANCE
 Insurance is a contract (policy) in
which an insurer indemnifies another
against losses from specific
contingencies or perils.
 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.

10. No market
fluctuations
in value
Increase
value
Surrender
value
No security
expenses
Provides
Security
Policy material
omitted can be
fatal
Policies consists
of clauses
May require
you to pay
premiums
Not worth for
minor things
May take long
time until
company pays
you
Merits Demerits

11. BANK FIXED DEPOSIT
Fixed deposits are the most popular
investment instruments in India. For
years, investing has been synonymous
with FDs since this product is considered
safe, provides guaranteed returns over a
period of time, and is also flexible in its
duration.
No matter how interest rates move or
economy performs, you will get the
returns fixed at the time of investing.
You earn interest on the interest amount
too. This helps you accumulate a big
amount with ease.

12. Guaranteed
results
Safe option
Loan
against FD
80C Income
tax
deduction
Hassle free
Low interest
rate
Long term
Paperwork
One time
investment
Cannot avail
benefit before
maturity
Merits Demerits

13. PROVIDENT FUND
 Employee Provident Fund, or EPF, is
the product.
 Provident fund is a government-
managed retirement savings scheme for
employees who can contribute a part of
their pension fund every month.
 These monthly savings get accumulated
every month, easily accessible as a lump
sum amount at retirement or the end of
employment.

14. Risk free
Guaranteed returns
Tax benefit
Mid withdrawal facility
Fund transfer facility
Loan facility
Long tenure
Lack of liquidity
One person one account
HUFs and trusts are not eligible
Indian citizenship essential
Merits Demerits

15. POST OFFICE DEPOSIT
The post-office term deposit (POTD) is similar to a
bank fixed deposit, where you save money for a
definite time period, earning a guaranteed return
through the tenure of the deposit.
 At the end of the deposit's tenure, the maturity
amount comprises the capital deposited and the
interest it earns.

16. Tax exemption
Risk free
Long term goals
Minimum paperwork
Accessibility
Variety of Schemes
No computerization
Rate of interest
No roaming facility
Allocation issues
Merits Demerits

17. GOLD
Gold investment can be done in many forms
like buying jewelry, coins, bars, gold exchange-
traded funds, Gold funds, sovereign gold bond
scheme, etc.
Though there are times when markets see a
fall in the prices of gold but usually it doesn't
last for long and always makes a strong
upturn.
Gold provides a natural hedge against
inflation and is regarded as a safe-haven
investment during downturns in the economy

18. Considered
safe haven
Status
symbol
Inflation
hedge
Gold is
mobile
Liquidity
Easy to
understand
and invest
Threat of
theft
No dividends
Rate
fluctuates
Not good for
short term
Commissions
and premiums
can be high
Merits Demerits

19. Tarushi Rana