International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395-0056
Volume: 11 Issue: 10 | Oct 2024
p-ISSN: 2395-0072
www.irjet.net
"From Stability to Growth: A Comparative Study of Bank Deposits and SIP Investments" - Ashmin Batra --------------------------------------------------------------***---------------------------------------------------------
Abstract: This research paper provides a comparative analysis of traditional bank Fixed Deposit Receipts (FDRs) and modern mutual funds, with a specific focus on the investment choices made by individuals in India. Using empirical data, we examine the percentage share of banks holding Fixed Deposits (FDs) and present this data using pie charts to visualize the distribution across major banks. Additionally, a bar graph illustrates the percentage decrease in returns from bank FDs in recent years compared to the relatively more volatile but potentially higher returns of mutual funds. The study delves into key metrics such as percentage savings and investment patterns among individuals, highlighting how the risk-return profiles of FDs and mutual funds influence investor preferences. The research also presents a mathematical model to calculate the growth of investments in both FDs and mutual funds over time. The models used show deposits with State Bank of India (SBI), including the equation for SBI bank deposits and SBI mutual fund investments, both measured in units of 10 lakhs of rupees. Our findings provide insight into the pros and cons of FDs and mutual funds and provide investors and financial institutions with an in-depth insight into the best asset allocation strategies based on patience and expected results.. KEY WORDS: Artificial Intelligence, market size, prompt, computing
1. Introduction: Investing is the act of allocating money to various financial assets with the expectation that they will produce a return or profit over time. It plays an important role in building wealth, achieving financial goals and planning for the future. Unlike saving, which focuses on keeping money, investing aims to grow your capital, although it often involves accepting risk. What is investment? Investing allows you to grow your wealth over time. By investing in assets such as stocks, bonds or real estate, you may get a higher return than keeping your money in a savings account. Inflation reduces the value of money over time, so investing is another way to grow your wealth faster than inflation. Additionally, investing can help you achieve longterm financial goals such as retirement, buying a home, or funding your education. Types of investment: 1. 2. 3.
4. 5.
Shares: Shares represent ownership of a company. When you buy a share, you own a part of the company. Shares are known for their high returns, but they also carry a lot of risk. Share prices are volatile, meaning their value can rise or fall over a short period of time. Bonds: Bonds are loans that you make to companies or authorities in exchange for paying interest and repaying the principal at maturity. They are considered less risky than shares, but the rewards are lower. Bonds are often used to secure a different fund. Mutual Funds: Mutual funds pool money from many investors to invest in a diversified portfolio of stocks, bonds and other assets. Professionally managed individual funds are an easy way for investors to get diversification without having to sell money. They have different risks and returns depending on the fund's asset allocation. Real Estate: Investing in real estate involves buying property for a rental income or reselling it in the future as a profit. Real estate appreciates over time and can provide real income through letting, although it requires a lot of upfront capital and ongoing management. ETFs (Exchange Traded Funds): ETFs are like mutual funds, but trade like stocks. They allow investors to buy a different portfolio of assets in a single transaction. ETFs are known for their low cost and flexibility. Important considerations: Before investing, it is important to consider your risk profile, timing and financial goals. Diversification – spreading your investments across different types of assets – can reduce risk. In addition, knowing the benefits of compounding, which can generate more profits over
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