Anda di halaman 1dari 47

JADAVPUR UNIVERSITY

A STUDY ON SAVINGS PROPOSITIONS AMONGST THE EMPLOYEES / PROFESSIONALS AND SELF EMPLOYEDS AND THEIR PREFERRED INVESTMENT OPTIONS

Internship Report submitted to SBI in completion of the requirement of Summer Internship at State Bank of India

NAME OF THE STUDENT:

PROJECT MENTOR AT THE BANK:

SANJANA GOSWAMI

RAHUL SHUKLA BRANCH MANAGER AT SBI, CHITTARANJAN

MAY 06,2013 TO JUNE 30,2013

ACKNOWLEDGEMENT

It is really a matter of pleasure for me on being selected for internship with SBI, with the project topic , A study on savings propositions amongst the employees / professionals and Self Employeds and their preferred investment options . In preparing this project, I have gathered immense knowledge regarding savings and investment and the deposit products of SBI, which would benefit me tremendously in my career in the future. So, I would like to thank all the persons who contributed directly or indirectly for the successful completion of my project report , A study on savings propositions amongst the employees / professionals and Self Employeds and their preferred investment options . First of all,I would like to thank my project mentor, Mr. Rahul Shukla, Branch Manager of SBI,Chittaranjan, for helping me in preparing and presenting this project. I am highly thankful and grateful to him for his careful guidance without which I could not have made progress with my project. I woud take this opportunity to thank the staff members of SBI, Chittaranjan, who had also helped me a lot in my project. Last but not the least, I am highly grateful to my university, Jadavpur University, for giving me this opportunity to experience the banking life.

TABLE OF CONTENTS Sl. No. 1. 1.1 1.2 1.3 1.4 1.5 2. 2.1 2.2 2.3 2.4 2.5 3. 3.1 3.2 3.3 3.4 3.5 4. Topic Name INTRODUCTION Brief profile of student Brief profile of project mentor at the bank Brief profile of organization Nature of the project Brief objectives/responsibilities assigned by the project mentor FRAMEWORK OF STUDY Theoretical framework Specific objectives of the project Scope of study Limitations of study Period of study METHOLOGY AND ANALYSIS Methodology Observations Analysis Conclusions Recommendations BIBLIOGRAPHY Page No. 1

LIST OF CHARTS:

Chart1: The bar-diagram Showing the number of employeds falling in each income range Chart2: The pie-Chart Showing the frequency of each product being used corresponding to the income range,by the employeds. Chart3: The Grouped-bar diagram Showing the frequency of each product being used corresponding to the income range and its corresponding percentage,by the employeds. Chart4: The bar-diagram Showing the number of self-employeds falling in each income range Chart5: The pie-Chart Showing the frequency of each product being used corresponding to the income range,by the self employeds. Chart6: The Grouped-bar diagram Showing the frequency of each product being used corresponding to the income range and its corresponding percentage,by the selfemployeds. Chart7: The bar-diagram Showing the number of retired falling in each income range Chart8: The pie-Chart Showing the frequency of each product being used corresponding to the income range,by the retired. Chart9: The Grouped-bar diagram Showing the frequency of each product being used corresponding to the income range and its corresponding percentage,by the retired.

LIST OF TABLES Table1: Showing the interest rates offered by SBI for deposits less than Rs.1crore Table2: Showing the interest rates offered by SBI for deposits above Rs.1crore Table3: Showing the different products available under SBI Life Table 4: Showing savings and investment options of the employed category

Table 5: Showing savings and investment options of the self-employed category

Table 6: Showing savings and investment options of the retired category

INTRODUCTION:

Brief Profile of Student:

NAME: ADDRESS:

SANJANA GOSWAMI STREET NO. : 11 QUARTERS NO. :11 A P. O. CHITTARANJAN DIST. BURDWAN PIN 713331

EDUCATIONAL QUALIFICATION:

Passed CLASS X in 2007 from St. Josephs Convent High School,Chittaranjan. Passed CLASS XII in 2009 from Deshbandhu Girls, Chittaranjan. Graduated from MAHARAJDHIRAJ UDAY CHAND WOMEMS COLLEGE, BURDWAN in 2012 under BURDWAN UNIVERSITY.

Presently pursuing Masters in Economics from Jadavpur University.

Brief profile of project mentor at the bank:

NAME:

RAHUL SHUKLA

DESIGNATION: BRANCH MANAGER SBI, CHITTARANJAN

Brief profile of organization

The State Bank of India(SBI) is the largest bank in India with presence in more than 50countries. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2012, it had assets of US$501 billion and 15,003 branches, including 157 foreign offices making it the largest and financial services company in India by assets. In 2008, the government took over the stake held by the Reserve Bank of India. SBI was ranked 285th in the Fortune Global 500rankings of the worlds biggest corporations for the year 2012. SBI provides a range of banking products through its network of branches in India and overseas, including products aimed at non-resident Indians(NRIs). SBI has 14 LHO and 57 Zonal Offices that are strategically located located at important cities throughout the country. SBI is a banking behemoth and has 20% market shares in deposits. Deposits of the Bank increased from Rs. 10,43,647 crores in Mar 12 to Rs. 12,02,740 crores in Mar13, a growth of 15.24%. Savings Bank Deposits increased from Rs. 3,59,847 crores in Mar 12 to Rs. 4,14,907 crores in Mar 13 ( 15.30% YOY growth). Now coming to my branch i.e. the SBI Branch based at Chittaranjan , where I have been sent for internship, it is a currency-chest branch having 4 link branchesand 5 ATMs. Brief profile of SBI Chittaranjan branch are as follows: Branch Code Region Circle Network Module : 241 : 6 : Bengal : GM-2 : Burdwan

Population Office-type Opened on Tier Number of NRI Account Number of pension account holder Total Demand Deposit Total Time Deposit Total advances Net-banking Mobile-Banking

: Semi-Urban : Regular Branch : 01-08-1966 :3 : 15 : 3536

: 112crores : 192crores : 23crores : :

Nature of the project

The project report was on A study on savings propositions amongst the employees /professionals and Self Employeds and their preferred investment options . The nature of this project report was that it dealt with the savings habit and the investment options and preferences of the individual customers and how these savings habit vary with their vocation in life viz. employed/self-employed/retired.

Brief objectives/ responsibilities assigned by the project mentor

The objectives / responsibilities assigned by the project mentor were:a) Firstly, to understand the concepts of savings and investment and then to explore how this investment pattern varies person to person depending whether they are employeds / self employeds / retired. b) Secondly, to explore the deposit products and services offered by the State Bank of India, to its customers. c) Thirdly, to understand the perception of the customers ( i.e. employees / self employeds / retired), by studying their savings propositions and their preferred investment patterns, with respect to the products and services offered by SBI. d) Fourthly, to understand the objectives of SBI, with respect to the products and services offered by them. e) Fifthly, to try and find out the level of awareness about the old existing products and the new products being launched by SBI, amog the individuals. f) Sixthly, to try and find out the reason of why people are investing in banks, why are they depending solely on banks for investing their hard-earned money. Keeping these above objectives assigned by the project mentor , in mind, I made progess with my project report.Thus, these were the main guidelines which helped me in preparing and presenting this project.

FRAMEWORK OF STUDY

Theoretical framework

The State Bank of India(SBI) was incorporated under the SBI Act 1955 and is the largest bank in India in terms of assets and deposit base and its areas of operation span all areas related to banking and finance viz.

The products offered by the State Bank of India are:Products:


Personal Banking NRI Services International SME Domestic Treasury Interests Savings Account Debit and Credit cards

Now let us define concepts of savings and investment as related to my project topic : Savings: The portion of disposable income not spent on immediate consumption but accumulated or invested through various investment avenues viz. Bank FD, Corporate Debentures, Stock Market, Bond Market, Commodity Market, Real Estate, Bullion etc. in anticipation of returns and consequent capital growth is called Savings.

Investment: Money deployed or asset created to generate cash flows and/or to augment capital or to meet requirements in case of emergencies is called Investment. Two main classes of investment are: Fixed Income Investment such as bonds, Fixed Deposit, preference shares. Variable Income Investment such as business ownership (equities), or property ownership. In economics, investment means creation of capital or goods capable of producing other goods or services.

Expenditure on education and health is recognized as an investment in human capital and research and development in intellectual capital. Return on investment (ROI) is a key measure of an organizations performance.

Now let us focus on the DEPOSIT PRODUCTS OF STATE BANK OF INDIA. The DEPOSIT PRODUCTS OF STATE BANK OF INDIA can be summarized with the help of the following structure:-

FIXED DEPOSIT:Fixed Deposit Scheme is one of the important saving schemes offered by the State Bank of India. This scheme is popular among both the employed group and retired group of people.

This scheme is a boon for people who have large amount of savings and thus can fix it as a deposit in banks. Under this scheme ,the customer deposits a lumpsum money at the time of opening a Fixed Deposit in the bank and fixes it for a specified time period, say 1 year or 2 year.The interest on deposit thus made is either payable at monthly/quarterly intervals or cumulative interest along with principal amount is paid at the time of maturity as per desire of the deposit holder. At the end of the period i.e. on maturity date, the customer is paid the maturity value i.e. principal deposited and the interest payable. Features and benefits with SBI Fixed Deposits: Safety SBI understands the value of your hard earned money and continue to deliver on their promise of safety and security for over 200 years. Liquidity Loan /overdraft facility You can avail a loan/overdraft against your Fixed deposit.SBI provides you loan / overdraft upto 90% of your Fixed deposit amount at nominal cost. So you continue to earn interest in your fixed deposit and still can meet your urgent financial requirements. Premature Withdrawal Interest to be charged on premature withdrawal of term deposits or fixed deposits at 1.00% below the rate applicable for the period deposit has remained with the Bank. Transferability Transfer of Term Deposits or Fixed Deposits between SBI wide networks of branches without any charge. Compounding / Flexible / Timely Payment of Interest

Under SBI Special Term Deposit Scheme, interest accrues in your account and gets compounded quarterly. Besides, SBI assures timely delivery of the proceeds of your deposit with interest, on maturity. Flexibility of payment on maturity through Cash (subject to prevalent Income Tax Act), Banker's Cheque, Credit in Savings /Current account.

Tax Implications Tax Deductible at Source as per Income Tax Act. Automatic Renewals

There is no need for you to keep track of the maturity of your fixed deposits. Your fixed deposits with SBI will be renewed automatically, post maturity, and you continue to earn interest for same period as that of your matured deposit, at the interest rate prevailing at the time of maturity. Automatic renewals take place where there are no standing instructions for renewal. Fixed Deposits Rates of Interest: For deposit products less than Rs. 1crore MATURITY PERIOD DEPOSIT AMOUNT INTEREST RATE GENERAL 7 days to 90 days 91 days to 179 days 180 days 181 days to 240 days 241 days to less than 1 year 1 year to less than 2 years 2 years to less than 3 years 3 years to less than 5 years 5 years to upto 10 years Less than Rs. 1 crore Less than Rs. 1 crore Less than Rs. 1 crore Less than Rs. 1 crore Less than Rs. 1 crore Less than Rs. 1 crore Less than Rs. 1 crore Less than Rs. 1 crore Less than Rs. 1 crore PUBLIC 6.75 6.75 6.75 6.75 6.75 8.75 8.75 8.75 8.75 SENIOR CITIZEN NIL NIL NIL NIL NIL 9.00 9.00 9.00 9.00

Table1: Showing the interest rates offered by SBI for deposits less than Rs.1crore For deposit products above Rs. 1crore MATURITY PERIOD DEPOSIT AMOUNT INTEREST RATE GENERAL SENIOR PUBLIC 7.50 7.50 CITIZEN NIL NIL

7 days to 180 days 181 days to 270 days

More than Rs. 1 crore More than Rs. 1 crore

271 days to less than 1 year 1 year to less than 2 years 2 years to less than 5years 5 years to less than 10years

More than Rs. 1 crore More than Rs. 1 crore More than Rs. 1 crore More than Rs. 1 crore

7.50 8.75 8.75 8.75

NIL NIL NIL NIL

For general public, interest rates are ranging from 6.75 % to 8.75 %. For senior citizens, for different tenures are offered additional benefit of 0.25% above the card rate for general public. The SBI broadly categories its term(or fixed) deposits into two products types:a) Special Term Deposits Receipt(STDR) b) Term Deposits Receipt(TDR) And a sub-category Flexi-Fixed Deposit. Special Term Deposits Receipt(STDR) The STDR pays out the principal amount deposited by us, along with the interest earned by us , on that principal amount deposited, after along time period, say it be 1 year or 2years, etc., as chosen by us at the time of opening the account. In case of STDR, the interest earned by us is reinvested instead of getting paid out. If we dont need a regular source of income in the form of interest payouts, it makes sense to go for STDR as it allows us to reap the dividends of compounding. The interest accruing on our deposit with the bank gets reinvested ( or compounded) quarterly giving us superior returns from the first year itself. Minimum amount that can be accepted as Special Term Deposit is Rs. 5000. Minimum and maximum tenure for STDR is 6 months and 120 months(10 years) respectively. Term Deposits Receipt(TDR)

The TDR pays out the interest earned by us at a periodicity (monthly , quarterly,halfyearly or yearly) chosen by us at the time of opening of the account. Thus TDR gives us a regular income in the form of interest payouts. Minimum amount that can be accepted as Special Term Deposit is Rs. 5000. Minimum and maximum tenure for STDR is 7 days and 120 months(10 years) respectively. Maximum amount of loan that can be granted against Term Deposits is 90% of principal amount + accrued interest. Maximum amount that can be held in the name of the Minor (above 10years of age) for Term Deposit is Rs. 2,00,000/-, for a maximum period of 10years. Interest rates on STDR/TDR are: For general public, interest rates are ranging from 6.75 % to 8.75 %. For senior citizens, for different tenures are offered additional benefit of 0.25% above the card rate for general public. TDS on Term Deposit Interest: As per Section 194A of the Income Tax Act, Tax is deducted at source whenever interest on time deposits credited or paid or likely to be credited or paid to the account of a customer, exceeds Rs 10000/- per person, per branch in a financial year. In such caes, 15G/15H forms are to be submitted by the person. TDS is applicable on all time deposits except Recurring Deposit. Form 15H is submitted by Depositors with age of 60 years & above. Form 15G is submitted by Individuals below age of 60 years. Form 15G & 15 H are valid only if It contains PAN. If PAN is not submitted, applicable rate of TDS for Resident Individuals,20% Plus 3% Cess. Thus, it may be concluded that :a) STDR is mainly chosen by the employed persons. As the employed persons do not need aregular source of income in the form of interest payouts, and they are able to

meet their monthly expenditures, through their monthly salary, so they prefer to choose STDR. b) TDR is mainly chosen by the retired persons,as they need a regular source of income in the form of interest payouts,to meet their daily expenditures. Flexi-Fixed Deposit It is a sub category of Fixed Deposit. It offers high rate of interest. Minimum amount of deposit is Rs. There is no penalty for premature withdrawl within 6 months. RECURRING DEPOSIT(RD):Recurring Deposit Scheme is one of the important saving schemes offered by the State Bank of India. Recurring Deposit is very popular among the salaried class, specially who can afford to save only few thousand rupees per month. This scheme is a boon for people who do not have a large amount of savings and thus cannot use the Fixed Deposit scheme of the banks. Under this scheme,the customer deposits a minimum amount (normally fixed) every month, and bank pays the interest at the pre-determined rates(which is usually the same as applicable to Fixed Deposits). At the end of the period i.e. on maturity date, the customer is paid the maturity value i.e. principal deposited and the interest payable. TDS is not deductable on the interests earned on RDs. Minimum monthly installment is Rs. 100/- for general public and Rs. 50/- for senior citizens.

Minimum and Maximum tenure is 12months and 120 months(10years) respectively. If opened in the name of the minor(below 18 years of age): Monthly installments should be so adjusted that the total amount payable on maturity does not exceed Rs. 2,00,000/-. Recurring Deposit Calculator: Investment Amount Period(in months) Rate of interest Maturity Value This RD calculator calculates the maturity value (i.e. principal amount + interest earned) of the deposits made under recurring deposit schemes of SBI. SAVINGS ACCOUNT: A Savings Account may be opened by a. Any individual in his sole name b. By two or more individuals jointly with survivorship benefits.

If at any time any one of the account holders issue stop payment of operation by the other joint account holders then account can be operated in future only Jointly by all the account holders. Minimum Cash Deposit permitted : Rs 10/-. Maximum Cash Deposit permitted : No restriction. Minimum cash withdrawal permitted:Rs 50/-. Maximum cash withdrawal permitted :No restriction. Number of Credits permitted:No restriction. Maximum number of debit entries permitted without any charge 30 per half year excluding SBI alternate channel transactions.Transactions through other banks ATM will be included.

Service charge payable if debits exceeds the limit Rs 5/- per entry. No Can third party cheques endorsed in favour of account holder be deposited. In non cheque operated A/c,withdrawal form should be invariably accompanied by Passbook. Payment through withdrawal form can be made to :Self only. A savings account can be opened in the name of a minor, either a) Singly or jointly with his her guardian b) By guardian alone on behalf of his/her minor ward. And the maximum balance in the account can be Rs. 2,00,000/- only. A savings account is the initial criteria , which every indidual should have in the banks, without which he cannot use any other products of the banks, So, every individual has a savings account. For General Public, the savings account is categorized into two types:a) Savings Plus b) Savings Premium Savings Plus: Minimum Balance to be maintained in Savings A/c :Rs 5000/ Service charge as applicable to SB account will be charged. Minimum permissible Threshold Amount above which sweep will take place:Rs 5,000/. Minimum Amount of sweep to MOD Rs 10000/- and thereafter in multiple of 1000/ Option for Auto Sweep Periodicity Once a week on any chosen day or once a month on any chosen date subject to availability of fund in SB A/c. Period of Deposit for MOD Component.: 1 year to 5 years. Under the reverse sweep facility,customer can specify the principle for breaking of MOD :Either LIFO or FIFO. In absence of any such option the Bank would follow the principle of LIFO.

Loan

against deposits held under Saving Plus Scheme is not

granted. Savings Premium: Eligibility criteria for residents above 18 years of age is:It can be opened singly, jointly with or without survivorship benefits. Premium Savings Account was earlier called Rich Savings Account. Purpose : To offer an enriched version of Savings Bank Account consisting of various concessions and add-ons to attract Mass Affluent and HNI customers. Minimum & maximum deposit amount under the scheme : Rs 25000.00 with no maximum limit Type of account: Savings Bank account linked with MODs for auto sweep. Minimum sweep to MOD : Rs.10000/- and thereafter in multiples of Rs.1000/- above the minimum prescribed limit of Rs.25000/-. Auto Sweep periodicity: Once a month on any chosen date. Period of Deposit for MOD Component: 1 year to 5 years Under the reverse sweep facility, customer can specify the principle for breaking of MOD: Either LIFO or FIFO In absence of any such option the Bank would follow the principle of LIFO. Two drafts facilities are provided in a month.

For Special Categories, the following salary packages are offered:Salary Packages: Corporate Salary Package (CSP) For Permanent employees of a Corporate or Institution. Defence Salary Package Army (DSPArmy) -For Personnel of Army & Rashtriya Rifles. Defence Salary Package Navy (DSPNavy)- For Personnel of Navy. Defence Salary Package Air Force(DSP-Airforce)- For Personnel of Air force. Defence Salary Package Assam Rifles(DSP-AR)- For Personnel of Assam Rifles.

Defence Salary Package GREF (DSPGREF) -For Personnel of General Reserve Engineer Force. Para Military Salary Package (PMSP) -For Personnel of Central ReservePolice Force (CRPF); Commando Battalion for Resolute Action ( COBRA), under Command & Control of CRPF; Sashastra Seema Bal ( SSB); Border Security Force (BSF); National Security Guards (NSG); Indo Tibetan Border Police (ITBP) & Central IndustrialSecurity Force (CISF). Railway Salary Package (RSP)- For Personnel of Indian Railways. Police Salary Package (PSP)- For permanent employees of Central Police Organisations and Police Forces of States and Union Territories. Indian Coast Guard Salary Package- A new salary package scheme is launched. State Govt Salary Package (SGSP)- Concession will be available to those employees who maintain their salary account with SBI only. Central Govt Salary Package (CGSP)- Permanent employees of all ministries and department of Central Govt including defence civilians are covered by the scheme already. Now employees of RBI and NABARD are also included. Variants of Salary A/cs in all theses Salary PackagesFour (Silver, Gold, Diamond &Platinum). Any Exception to the above Platinum Variant not available in DSPAR (Since officers qualifying for Platinum Variant are on deputation from Army & they are already covered under DSP-Army).

TAX SAVINGS SCHEME OF THE STATE BANK OF INDIA: The Tax savings scheme of SBI is one of the deposit products of SBI. Individuals in single name or joint name. Cater the need of Income Tax assesses. PAN is mandatory. It provides Tax Benefit under Sec 80C of IT Act 1961. Minimum Deposit :Rs 1000/ Maximum Deposit :Rs 100000/- in a year

Period of Deposit :Minimum 5 Years and Maximum 10 Years. There is a lock in period of 5 years. No loan facility. It can also be not held as collateral for securing any loan. In case of Joint A/c, the First Account holder (u/s 80c of IT Act 1961) will get the tax benefit. ON-LINE PRODUCT: Products that are accessible to the customers 24*7 (365 days a year) at the comfort of the house is called ON-LINE PRODUCT. OTHER PRODUCTS OF SBI: SBI Life:-

Every policy has single and regular premium. Single:- can be deposited only once and can be withdrawn at the time of maturity only. Regular:- After every regular time period say 6months. Every policy has locking period. Customer Insurance Facilitator(CIF):-an agent has to pass this exam, conducted by IRDA(Insurance Regulator Development Authority). An agent can remain attached to only one company at a time. SBI Life has merger with BNB Parivar( 90 SBI Life + 10% BNB). Products of SBI Life:Traditional:-

SBI Cap: SBI Mutual Fund: SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable

track record in judicious investments and consistent wealth creation.


The fund traces its lineage to SBI - Indias largest banking enterprise. The institution

has grown immensely since its inception and today it is India's largest bank, patronised by over 80% of the top corporate houses of the country.

SBI Mutual Fund is a joint venture between the State Bank of India and Socit

Gnrale Asset Management, one of the worlds leading fund management companies that manages over US$ 500 Billion worldwide. In twenty years of operation, the fund has launched 38 schemes and successfully redeemed fifteen of them. In the process it has rewarded it's investors handsomely with consistent returns.
A total of over 5.8 million investors have reposed their faith in the wealth generation

expertise of the Mutual Fund.


Schemes of the Mutual fund have consistently outperformed benchmark indices and

have emerged as the preferred investment for millions of investors and HNIs.
Today, the fund manages over Rs. 42,100 crores of assets and has a diverse profile of

investors actively parking their investments across 38 active schemes.


The fund serves this vast family of investors by reaching out to them through network

of over 130 points of acceptance, 29 investor service centers, 59 investor service desks and 6 Investor Service Points.
SBI Mutual is the first bank-sponsored fund to launch an offshore fund Resurgent

India Opportunities Fund.

SBI Gold:- It provides a platform for purchasing gold, not physically hand-in-hand, but through machines. SBI Bond: It is a type of buying certificates. The rate of interest is fixed. There is a locking period of 10-15 years. It is mainly opted by those who try to get rid of tax through Section 80C. PUBLIC PROVIDENT FUND(PPF): It is Government Sponsored Scheme. Minimum amount to be deposited: Rs. 500 Maximum Deposit: Rs. 1,00,000/-. Rate of interest is given every year on 31st March.

Time period: 15 years, it is to be extended at a block of 5years. After 5years,it can be broken or loan can be taken. Only 1nominee,two nominee is not possible. SENIOR CITIZEN SAVING SCHEME: It is also a Government Sponsored scheme. Minimum age of the depositor should be 60 years or above on the date ofdeposit Period of deposit :Minimum 1 year maximum 10 years. Minimum amount of deposit is Rs. 10000.00 and thereafter in multiple of Rs 1000.00 (For RD, maturity value should be Min. Rs.10,000/-). Differential rate of interest under Senior Citizen Deposit Scheme is 0.25% above the normal rates. Nomination: i) Signature of nominee duly attested by Senior Citizen to be obtained. ii) Option to write name of nominee on receipt apart from nomination registration no (if Senior Citizen not agreed for above provision, consent letter to be kept on record).

Specific Objectives of the project:

Our endeavor was to:-

a) Explore the deposit products and services offered by the State Bank of India to individual customers. b) Understand the perception of the customers, (i.e. employed, self-employed, retired), by studying their savings propositions and their preferred investment patterns, with respect to the products and services offered by SBI. c) Understand the objectives of Banks with respect to the products and services offered by them. d) To ascertain variances among individuals based on their income, age, number of dependent family members. e) Find out the level of awareness about the old existing products and the new products being launched in by SBI, among individuals. f) Lastly, to understand how individuals preferred investment options vary with their vocation in life viz. employed/self employed/retired.

Scope of Study:

a) Scope of the study is to understand the various services and deposit products offered by SBI to the individual customers. b) An effort was made to study the savings propositions amongst the employeds, selfemployeds , and retired and their preferred investment options. c) The study was undertaken at the SBI Branch based at Chittaranjan. Hence, the survey was restricted to the bank customers of Chittaranjan only.

Limitations of study:

The Limitations of study in my project topic were:a) Since the study was done taking the SBI Branch based at Chittaranjan ,so the survey was restricted to the bank customers of this branch only. Thus, the sample size was restricted within the area Chittaranjan only.Hence,the conclusions may not be generalized for the bank as a whole. b) There were time constraints as this project was supposed to be completed within 8-10 weeks. c) The SBI Branch at Chittaranjan is one of the prominent branches with significant deposit base. This project has been done purely for academic purpose and as a part of my internship under SBI. Period of Study:

The period of study in preparing this project report was 8-10 weeks, as allotted by SBI, HR Department, LHO.

METHODOLOGY AND ANALYSIS

Methodology:

The project report on A study on savings propositions amongst the employees / professionals and Self Employeds and their preferred investment options , aims to collect data about the savings and investment patterns chosen by different individuals depending on their age, category(employed / self-employed / retired), monthly salary and number of dependent family members on them. The methodology used by me in collecting data was by means of a survey.It was carried out in the following ways:a) The survey was carried out by me, by remaining in the bank itself. b) Questionnaires were prepared and each and every individual visiting the bank for their own purposes, were approached through these questionnaires and were asked to fill them up. c) The questionnaires included a set of total 12 questions, which reflect the age, salary (monthly), number of dependent family members , monthly investment(savings) and its related investment patterns. d) The filled up information was later analyzed to obtain the required interpretation and the findings. In this way, the data was collected for my project report. Observations:

From among 50,000 account holders in the SBI Branch based at Chittaranjan, I have tried to include about 150-200 customers of the bank in my survey. But inspite of surveying about 150-200 customers, my project report contains data of about 125 customers only. This is because of the : Indifference shown by some people towards participating in this survey as they might be least bothered in it and considered it as time wastage.

Many respondents were apprehensive about divulging their income and savings related information. This was done mainly by the high-income group people and so my entire survey includes only 8.0% of them. Throughout my entire survey, I have covered three categories of people, namely, Employeds, Self-Employeds and Retired. Now we shall focus on each category, part-by-part, and study their savings propositions and their preferred investment options. EMPLOYEDS:The Employeds are those group of people who are still working and thus have a regular source of income in the form of their monthly salary. These group invests that amount of their salary which is left after their monthly expenditures, keeping in mind that they get taxbenefits. Among the 50000 account holders of the SBI Branch based at Chittaranjan, my survey includes 56% of Employeds. From the above table I came to the conclusion that among all the employeds whom I have surveyed, 50% of them invests completely in SBI and the remaining 50% of them only has the savings account in the form of salary account in SBI. These two groups can be explained in the following manner: One group of Employeds which depends on SBI completely for their entire

investment, invests in the following products such as Savings account ,Fixed Deposit, Recurring Deposit, SBI Life. These group of people fear to invest anywhere else outside bank due to risk involved. So, inspite of getting relatively lower rate of return/interest from SBI, they still invest in SBI due to safety. The other group of Employeds which has only Savings account in SBI, implies that they visit bank for the purpose of withdrawing money from their salary account only, in order to meet their monthly expenditures. This may be due to lesser amount of investible funds available with them or may be because of their different investment preferences. Some points to be noted about the Employeds are: Employed People of any income range are more concerned about tax savings. As all of them are tax-conscious, although they invest in Fixed Deposit, Recurring Deposit,

Savings Account in SBI, but for tax benefits, they invest in Provident Funds(PF) and Voluntary Provident Funds(VPF), and also in Public Provident Fund(PPF) Accounts provided by banks. Many invest in LIC also. But one thing to be noted is that these people do not prefer to invest in the Tax Savings Scheme of SBI, the reason for which may vary from ignorance to individual preference.

Many High-Income group were apprehensive about divulging their income and savings related information. This is why, my survey includes only 8.0 percentage of high-income category.

SELF-EMPLOYEDS:My survey includes 20% of Self-Employeds. From the above table I came to the conclusion that among all the Self-Employeds whom I have surveyed, all of them mainly invest in the following FOUR categories : Fixed Deposit Schemes of the SBI (STDR) Current Account SBI Life SBI Mutual Fund. These type of investment pattern is opted by the Self-Employeds may be due to the following reasons: These Self-Employeds do not have any any regular source of income with certainty, as the employeds have. So this factor prevents them from investing in Recurring Deposit Schemes. So, whenever they earn any heavy profit from their business, they invest it in the Fixed Deposit. SBI MF and SBI Life are mostly used by these Self-Employeds only, as they do so in order to get higher returns.

RETIRED GROUP OF PEOPLE:The Retired groups of people are those who had crossed their 60 years of age and are thus retired from their job life. They have no regular source of income. So with the amount of money which they get after their retirement, they try to invest in such deposit products so that they can earn a regular source of income in the form of interests and also keep some amount fixed for sudden urgent needs such for medical purposes. My survey includes 24% of Retired group of people.. From the above table I come to the conclusion that among all the Retired group of people whom I have surveyed, all of them mainly invest in the following TWO categories : Savings account Fixed Deposit ( both STDR and TDR) Such an investment pattern is chosen by the Retired group of people due to the following reasons: Ignorance of the people towards learning something new. Resistance to change: Old/ retired people do not easily adjust themselves with any kind of changes surrounding them. So they keep on investing in their old investment patterns. Lack of awareness about the products: Retired people are less aware of the new products being launched in by the banks. They actually dont bother to know about the new products . They are fully satisfied with the products they are using and with the returns they are getting from it. For example: SBI Mutual Fund is one of the products which could yield higher returns if invested for longer time period. But very few people know about it and they dont try to enquire about it also. Thus, the retired group are mainly inclined towards Savings account and Fixed Deposit. Penetration level is low among the retired group.

Old/retired people are also found to be technology aversed: They are not so easily equipped with the newer technology based facilities,being introduced in the bank such as Internet banking. But almost many of them hesitate to use these facilities because of:1. Fear of getting hacked 2. Lack of proper computer knowledge and use of internet. Indecision to goals: Many a time they have no present financial goals/targets to be met but they have a heavy amount in cash. So in such situations, when there is indecision to goals, they prefer to go for Fixed Deposit (TDR). Uptil now I have discussed about what I have observed from each category. Now, we shall focus on over-all observations:-

From the survey, which I have carried out among the bank customers of the SBI, Chittaranjan, the following conclusions can be drawn from the survey:a) People of any income range in this area are more concerned about tax savings. b) TDS charged on Fixed Deposit should be stopped, as it does not earn any profit for the bank. Rather, it causes harashment as suggested by the customers. c) During my survey, I have realized that many people are not willing to reveal their personal data regarding their salary and investment patterns. Some of them have also misguided me by giving me wrong data. d) Many High-Income group people have denied completely to reveal their salary and investment patterns in fear of getting caught by Income Tax. This is why, my survey includes only 8.0 percentage of high-income category. e) Another conclusion that can be drawn from my survey is that Savings account, STDR, SBI Life are the three most common products which are used by all categories of customers of the bank. f) SBI Mutual Fund is the least used product in SBI, as SBI Mutual Fund is based on the share market transactions and is surrounded by risk and uncertainty. But very few people know that SBI Mutual Fund can yield higher returns for long

term period. Due to lack of such knowledge among the customers, they are least bothered to invest in SBI Mutual Fund and thus neglect it fully. g) SBI Life is the common investment pattern among the self-employeds, although some employeds have also invested in SBI Life. Inspite of SBI Life being used in plenty but it is surrounded by complaints of customers. Almost all users of SBI Life are complaining about getting lesser returns compared to what they have invested. h) The retired group invests only in TDR and no other products. They do so, in order to get a regular source of income in the form of interests. Also, these retired category is least interested to know about other existing old products and the new products being launched in, by SBI. i) The entire employed group which I have covered in my survey, are all Railway Employees of Chittaranjan Locomotive Works (CLW) situated in Chittaranjan. As all of them are tax-conscious , although they invest in Fixed Deposit, Recurring Deposit, Savings Account in SBI, but for tax benefits, they invest in Provident Funds(PF) and Voluntary Provident Funds(VPF), provided by CLW to their employees and also in Public Provident Fund(PPF) Accounts provided by banks. Many invest in LIC also. These people do not invest in the Tax Savings Scheme of SBI.

ANALYSIS:-

In this section we shall show the results of my survey with the help of graph: EMPLOYEDS:-

SELF-EMPLOYEDS:-

RETIRED:-

Conclusions:-

Throughout my project report on A study on savings propositions amongst the employees /professionals and Self Employeds and their preferred investment options ,within the limited time frame available I have tried to gain a brief knowledge regarding the deposit products offered by SBI and also tried to cover each and every aspect of the savings propositions among different individuals. My study was mainly focused on to find out how the savings propositions and investment pattern of every individual, varies according to their monthly income, age ,dependent family members and their future aspirations and needs etc. This study was undertaken at the SBI Branch based at Chittaranjan and so the survey was restricted to the bank customers of Chittaranjan only. I could not reach all of the customers in my allotted time period, and so ,I could include only 125 respondents in my survey. The area of my survey i.e. Chittaranjan, is a semi-urban area, where the only factory located is Chittaranjan Locomotive works(CLW). Among these 125 respondents, majority of them were government employees of CLW. The rest were the Self- employeds and the retired group of people. The important points to be noticed are: People save maximum portion of their income in Bank FDs, Post Offices. Their savings is consolidated to Fixed Deposits only. They go for no other options. Secondly, due to the Sharda case also, people have become more aware of the risks involved with the promise of high returns. This is why, most of the people prefers to save in banks due to safety. Presently, the economic growth rate has slowed down to 5%. So peoples expectations are not getting fulfilled and so very few of them are investing in share markets. Government is trying to accelerate this growth rate, so that general public make use of their deposits, in investment. Due to fluctuations and consequent uncertainty in gold prices, people have reduced their investment in gold (i.e.by buying gold coins from banks and by purchasing gold items) and started investing in banks Fixed Deposits.

Thus we can conclude saying that the savings propositions and the investment options of each and every individual, not only depends on their monthly income, age, number of dependent family members and their respective monthly/daily expenditures but it is also affected by other external factors such as inflationary trends,financial market upheavals, fluctuations in gold prices, fear of the risks involved,lack of awareness or knowledge gap and so on. So, there are several other factors,which influences a person to choose his investment option.

Recommendations:

After completing my survey on the project report , A study on savings propositions amongst the employees / professionals and Self Employeds and their preferred investment options, I came to some of the conclusions(as mentioned above) and correspondingly my recommendations towards the bank are as follows:a) There should be more alternative technology platform for product delivery and software deployed by the bank (CBS) should be more users friendly to enhance productivity and save time. b) Technology-savy products should be introduced, such as people should be able to do STDR , TDR, RD through mobile banking. In present situation, mobile banking allows only mobile recharge, checking of balance etc. c) Products launched should be customer-savy i.e. the products launched should be such that they are easily understandable by the customers by their own. Customers need not approach other bank staffs to get to know about the products. d) Products should be beneficial to the customers so that more customers are attracted towards SBI. e) There is lack of staff in the SBI Branch based at Chittaranjan, so more staff should be taken for purposes such as advertising the other associated products of SBI such as SBI Life, SBI Mutual Fund etc. This might increase the sales of SBI Mutual fund. f) Changes should be made in the schemes of SBI Life products as the returns till date from them have been leave a lot to be desired.

BIBLIOGRAPHY
Websites:-

http://www.google.com http://www.sbi.co.in http://www.sbimf.com http://www.sbilife.co.in http://www.en.wikipedia.org

ANNEXURE 1: The Savings propositions and the preferred investment options of the Employeds are shown below in the following table:Sl.No. Age(in Income years) (monthly) STDR TDR RD SB/ CA 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 59 49 55 44 32 27 46 50 55 54 51 49 54 45 49 50 34 36 51 59 50000 40000 40000 55000 60000 35000 48000 50000 30000 45000 60000 55000 30000 35000 40000 40000 36000 15000 42000 45000 2 1 1 3 2 2 2 2 1 2 2 2 2 1 2 1 1 1 2 2 20000 10000 10000 20000 22000 15000 20000 14000 15000 10000 40000 35000 15000 10000 10000 10000 10000 4000 27000 20000 STDR STDR STDR STDR STDR Nil Nil Nil STDR STDR STDR STDR STDR Nil Nil Nil Nil STDR STDR STDR Nil Nil Nil TDR Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil TDR TDR TDR Nil Nil RD RD RD RD RD RD RD Nil Nil RD RD Nil Nil Nil Nil RD RD RD Nil Nil SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SBI SBI Life/ MF/ Dependent Savings Savings options

PPF SBI Life SBI Life SBI Life,

SBI MF Nil SBI Life Nil SBI Life Nil Nil Nil Nil Nil Nil SBI Life Nil Nil Nil Nil SBI Life SBI Life

21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48.

44 46 51 50 52 49 43 47 50 50 42 51 50 45 46 43 58 48 50 50 57 58 55 21 53 52 52 49

25000 30000 28000 30000 40000 20000 25000 30000 35000 29000 19000 30000 7000 45000 32000 30000 60000 40000 40000 44000 56000 80000 30000 27000 38000 25000 50000 30000

3 5 2 2 3 7 3 2 2 2 3 5 2 4 3 2 2 3 4 2 2 3 3 3 3 2 2 3

10000 6000 12000 16000 25000 Nil 5000 11000 14000 14000 13000 4000 2000 15000 9000 13000 29000 20000 12000 12000 30000 45000 10000 3000 13000 9000 20000 12500

STDR STDR STDR STDR Nil Nil Nil Nil Nil Nil Nil Nil STDR STDR STDR STDR STDR Nil Nil STDR STDR STDR Nil STDR STDR STDR STDR STDR

Nil Nil Nil TDR Nil Nil Nil Nil TDR Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil TDR Nil Nil Nil Nil Nil Nil Nil

RD RD Nil RD Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil RD Nil Nil Nil RD RD RD RD Nil Nil Nil Nil

SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB

Nil Nil Nil Nil Nil Nil Nil SBI Life Nil Nil PPF Nil Nil SBI Life SBI Life SBI Life SBI Life Nil SBI Life SBI Life Nil SBI Life SBI Life PPF PPF Nil Nil Nil

49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66.

35 45 55 50 48 49 51 58 53 38 47 52 58 42 59 32 47 52

38000 40000 15000 35000 17000 22000 35000 35000 20000 30000 24000 19000 100000 100000 110000 100000 130000 105000

2 3 2 3 3 2 4 3 2 3 2 2

11000 20000 5000 20000 7000 9000 12000 8000 8500 15000 12000 6000

STDR Nil STDR STDR STDR Nil Nil STDR STDR STDR STDR STDR

Nil Nil Nil Nil Nil Nil TDR Nil Nil Nil Nil Nil

RD RD Nil Nil Nil Nil Nil Nil RD Nil RD Nil Nil Nil RD RD RD RD

SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB

SBI Life SBI Life SBI Life Nil Nil Nil Nil Nil Nil Nil Nil SBI Life SBI Life,

HIGH INCOME GROUP PEOPLE 3 30000 Nil Nil 1 4 2 3 4 20000 25000 22000 35000 23000 Nil STDR Nil Nil Nil Nil Nil TDR TDR Nil

SBI MF SBI Life, SBI MF SBI Life, SBI MF SBI Life, SBI MF SBI Life, SBI MF SBI Life, SBI MF

67. 68. 69. 70.

35 55 45 59

100000 120000 110000 180000

3 5 4 5

20000 25000 36000 40000

STDR STDR STDR STDR

Nil Nil Nil TDR

Nil RD RD RD

SB SB SB SB

SBI Life SBI Life SBI Life SBI Life

Table 4: Showing savings and investment options of the employed category

ANNEXURE2:The Savings propositions and the preferred investment options of the Self-Employeds are shown below in the following table:Sl.No. Age(in Income years) (monthly) STDR TDR RD SB/ SBI Life/ Dependent Savings Savings options

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.

29 48 33 40 54 35 31 40 47 45 52 53 30 35 44 58 25 30 32 57 60 65 41 30 28

35000 25000 40000 70000 50000 8000 45000 3000 30000 60000 35000 40000 35000 50000 40000 60000 55000 30000 35000 40000 30000 70000 50000 40000 36000

3 2 2 1 3 4 2 2 2 5 2 3 2 2 3 2 1 2 2 3 2 4 5 1 3

10000 15000 20000 15000 10000 5000 13000 500 3000 15000 17000 9000 10000 15000 8000 20000 20000 10000 15000 10000 9000 20000 9000 10000 16000

STDR Nil Nil STDR Nil Nil STDR Nil STDR STDR STDR STDR STDR STDR STDR STDR

Nil Nil Nil TDR TDR Nil Nil Nil Nil Nil Nil Nil Nil TDR Nil TDR Nil

Nil RD RD Nil Nil Nil Nil Nil RD Nil Nil Nil Nil Nil Nil Nil RD Nil Nil RD Nil RD Nil RD RD

CA SB SB CA SB SB SB SB SB SB SB SB SB CA SB CA SB SB SB SB SB SB SB CA SB SB

SBI MF SBI Life Nil SBI Life SBI Life SBI Life Savings plus SBI Life SBI Life SBI Life Nil SBI Life, SBI MF SBI Life SBI Life SBI Life SBI Life SBI Life SBI Life SBI Life SBI Life SBI Life SBI Life, SBI MF SBI Life, SBI MF SBI Life SBI Life, SBI MF SBI Life

STDR STDR

Nil Nil Nil

STDR STDR STDR Nil STDR

Nil Nil Nil TDR Nil

Table 5: Showing savings and investment options of the self-employed category

ANNEXURE3:The Savings propositions and the preferred investment options of the Retired group of people are shown below in the following table:Sl.No. Age(in Pension years) (monthly) STDR TDR 1. 2. 3. 4. 5. 6. 70 59 50 60 73 62 13000 17500 12000 15000 13000 10000 5 2 2 1 2 2 4000 7000 5000 6500 5000 3000 STDR STDR STDR STDR STDR STDR Nil Nil Nil Nil Nil Nil RD Nil Nil Nil Nil Nil Nil SB/ CA SB SB SB SB SB SB SBI Life/ SBI MF Nil Nil SBI Life Nil SBI Life Nil Dependent Savings Savings options

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.

55 60 75 60 60 61 73 58 62 74 60 80 66 61 70 61 65 60 67 78 61 63 69 72

15000 18000 12000 1600 10000 13000 20000 18000 18000 12000 16000 11000 12500 15000 13000 17500 45000 25000 14000 4000 19000 8000 14500 20000

2 3 2 2 4 2 1 2 3 2 2 1 1 2 1 1 2 1 2 1 4 2 2 1

6000 6000 6000 Nil 3000 4000 9000 7000 6000 5500 5000 Nil 2000 6000 4000 7000 20000 10000 5000 Nil 3000 2000 3500 8000

STDR STDR Nil STDR STDR STDR STDR STDR Nil STDR STDR STDR STDR STDR STDR STDR STDR STDR STDR STDR STDR STDR STDR STDR

Nil TDR Nil Nil Nil TDR TDR Nil Nil Nil Nil Nil Nil Nil Nil Nil TDR Nil Nil Nil TDR Nil Nil Nil

Nil Nil RD RD Nil Nil Nil Nil Nil RD Nil Nil Nil Nil Nil Nil RD Nil Nil Nil RD Nil Nil Nil

SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB SB

Nil Nil Nil Nil Nil Nil SBI Life SBI Life Nil Nil SBI MF Nil SBI Life Nil Nil Nil Nil SBI Life Nil Nil SBI Life Nil Nil Nil

Table 6: Showing savings and investment options of the retired category