Sahil Verma is a student at Jammu University studying at the Business School. His email is provided. The document then summarizes several major financial sectors in India including banking, stock market, mutual funds, real estate, gold, PPF, insurance, government bonds, and post office saving schemes. For each sector, the key details are provided along with the typical merits and demerits of investing in each.

1. NAME – SAHIL VERMA
UNIVERSITY – JAMMU UNIVERSITY
THE BUSINESS SCHOOL
EMAIL – sahilvermasv7000@gmail.com

2. FINANCIAL SECTORS

3. BANKING
 The banking industry is the backbone of India’s financial services
industry. The country has several public sector (12), private sector
(22), foreign (45), regional rural (43) and urban/rural cooperative
(95,000+) banks.
 The financial services offered in this segment include:
• Individual Banking (checking accounts, savings accounts,
debit/credit cards, etc.)
• Business Banking (merchant services, checking accounts and
savings accounts for businesses, treasury services, etc.)
• Loans (business loans, personal loans, home loans, automobile
loans, working-capital loans, etc.)
 The banking sector is regulated by the RBI which monitors &
maintains the segment’s liquidity, capitalization & financial health.

4. Merits Demerits
• Safety of Public wealth
• Availability of Cheap loans
• Propellant of Economy
• Economies of Large scale
• Easy Liquidation
• Assured Rate of return
• Chances of bank going
bankrupt
• Lower returns
• Account fees

5. STOCK MARKET
 It is a place where shares of pubic listed companies are traded.
The primary market is where companies float shares to the
general public in an initial public offering (IPO) to raise capital.
 A stock may be bought or sold only if it is listed on an exchange.
Stock Markets are governed by the SEBI.
 India's premier stock exchanges are the Bombay Stock
Exchange and the National Stock Exchange.
 Share prices are set by supply and demand in the market as
buyers and sellers place orders. Order flow and bid-ask spreads
are often maintained by specialists or market makers to ensure
an orderly and fair market. A stock or share is also known as a
company's "equity“.

6. Merits Demerits
• Return on investment
• Returns on investments in
short time
• Protected by regulatory
bodies - SEBI
• Professional Assistance
• Direct contribution to
economic growth
• Easy to buy and sell
• High Brokerage Charges
• Low margin
• Lack of knowledge
• Higher risk
• Demat and Trading accounts
are required

7. 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.
 Mutual fund shares are “redeemable,” meaning investors can sell
the shares back to the fund at any time. The fund usually must
send you the payment within seven days.

8. Merits Demerits
• Flexible Investment
• Less Time Consuming
• Multiple Payment Options
[in Installments]
• Professional Assistance
• Risk (Subject to Market)
• No Tax Benefits
• Fluctuating Returns
• Lack of Control

9. REAL ESTATE
 The real estate industry works because the value of real
estate tends to rise. As a result, people are able to make a profit
by buying and selling real estate. Agent and brokers capture a
portion of this profit by selling a service to those engaged in
a real estate transaction.
 It comprises of four sub sectors –
1) Housing
2) Retail
3) Hospitality and
4) Commercial
 The growth of this sector is well complemented by the growth in
the corporate environment and the demand for office space as
well as urban and semi-urban accommodations

10. Merits Demerits
• Secondary Source of Income
• Rental Income
• Hedge against Inflation
• Loan Facility
• Huge Investment Required
• No Tax Benefit
• Low Liquidity
• Lock-in Period
• High Maintenance Period

11. GOLD
 Of all the precious metals, gold is the most popular as an
investment.
 Investors generally buy gold as a way of diversifying risk,
especially through the use of futures contracts and derivatives.
 Gold is Inversely proportional to stock market.
 Higher inflation leads to higher gold prices. Besides investment
in gold has always played a significant role in religion, rituals and
human sentiments, making it an indispensable investment
option.

12. Merits Demerits
• High Liquidity
• Loan Facility
• Hedge against Inflation
• Cultural Value
• Making Charges
• Lower Returns
• Storage Issues
• Less Resale Value
• No Tax Benefits

13. PPF
 Public Provident Fund is a savings-cum-tax-saving instrument in
India introduced by the National Savings Institute of the Ministry
of Finance in 1968
 Public Provident Fund (PPF) is a tax-free saving scheme
regulated by the Indian Government. It is a long-term investment
scheme with a lock-in period of 15 years. Individuals can start
investing in PPF with a minimum amount of Rs. 500 p.a. The
interest rate is set and paid by the government for every quarter.
 It is considered as the safest option of Investment which does
not dissolves even upon one’s insolvency.
 Investment in PPF is tax free up to a limit of Rs.1,50,000 under
Section 80C of the Income Tax Act, 1961, for each financial year.

14. Merits Demerits
• Tax Benefits
• Guaranteed Returns
• Tax Returns – Moderate
Fixed
• Government Backboned
• Tax Benefits
• High Lock-in Period
• Low Liquidity
• Limit to invest per year –
1.5 Lakh (maximum)
• Joint Account Facility to pay
Premium is not available

15. INSURANCE
 The insurance sector is made up of companies that offer risk
management in the form of insurance contracts.
 The basic concept of insurance is that one party, the insurer, will
guarantee payment for an uncertain future event. Meanwhile,
another party, the insured or the policyholder, pays a smaller
premium to the insurer in exchange for that protection on that
uncertain future occurrence.
 As an industry, insurance is regarded as a slow-growing, safe
sector for investors.
 Insurance companies can be structured either as a traditional
stock company with outside investors, or mutual companies
where policyholders are the owners.

16. Merits Demerits
• Assured, High & Fixed Returns
• Tax Benefits
• Life Cover Amount
• High Liquidity
• Loan Facility
• Regulatory Sector –
IRDA under Government Vigilance
• Leads to Promotion in
Crime which has even
changed as per new rules
& regulations

17. GOVERNMENT BONDS
 A government bond is a debt security issued by a government to
support government spending and obligations.
Government bonds can pay periodic interest payments called coupon
payments.
Government bonds issued by national governments are often
considered low-risk investments since the issuing government backs
them.
Government bonds may also be known as sovereign debt.

18. Merits Demerits
• Pay a steady interest income
return
• Exempt from state and local
taxes
• A liquid market for reselling
• Assessable through mutual
funds
• Offer low rates of return
• Fixed income falls behind
with rising inflation
• Carry risk when market
interest rates increase
• Default and other risks on
foreign bonds

19. Post Office Saving Schemes
India Post, which controls the postal chain of the country, also provides
several deposit avenues for investors, commonly known as post office
saving schemes. These schemes were introduced to provide investment
avenues and inculcate savings discipline among Indians from across
economic classes. Every post office provides these to enable individuals
from across India to apply and enrol easily.
Types of schemes
• Post Office Savings Account
• 5-Year Post Office Recurring Deposit Account (RD)
• Post Office Time Deposit Account (TD)
• Post Office Monthly Income Scheme Account (MIS)
• Senior Citizen Savings Scheme (SCSS)
• 15 year Public Provident Fund Account (PPF​)
• National Savings Certificates (NSC)
• Kisan Vikas Patra (KVP​)
• Sukanya Samriddhi Accounts

20. Merits Demerits
• Tax benefits
• Availability of alternatives
• Easy investment
• Risk free and reliable
• Good Returns
• Inconvenience
• Transferable
• Lack of digitization
• Connected to the place of
investment
• Corruption
• Does not take inflation into
consideration
• Blockage of funds