Project - Term Deposit Scheme by Banks

A PROJECT REPORT

On

COMPARITIVE STUDY OF

TERM DEPOSIT SCHEMES

BY BANKS

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF DEGREE OF

BACHELORS IN BUSINESS ADMINISTRATION.

(Session: 2009-2012)

UNDER THE GUIDANCE OF: SUBMITTED BY:

Ms. SUPRIYA MAHESHWARI MOHSIN AHMED BATLA

(FACULTY, MAIMS) Roll no. 02614701709

Maharaja Agrasen Institute of Management Studies Affiliated to Guru Gobind Singh Indraprastha University, Delhi

PSP Area, Plot No. 1, Sector 22, Rohini, Delhi 110086

Table of Contents

Student Declaration i

Certificate from Guide ii

Acknowledgement iii

Chapter Scheme iv

List of Tables v

List of Charts v

List of Graphs vi

Executive Summary vii

STUDENT DECLARATION

This is to certify that I have completed the Summer Project titled “Comparative

Study of Term Deposit Scheme by banks” under the guidance of Ms. Supriya

Maheshwari, faculty of maims in partial fulfillment of the requirement for the

award of Degree of Bachelor of Business Administration at Maharaja Agrasen

Institute of Management Studies, Delhi. This is an original piece of work & I

have not submitted it earlier elsewhere.

Name: Mohsin Ahmed Batla

University Enrollment No.: 02614701709

i

CERTIFICATE FROM THE INSTITUTE GUIDE

This is to certify that the summer project titled “Comparative Study of Term

Deposit Scheme by banks” is an academic work done by Mohsin Ahmed Batla

submitted in the partial fulfillment of the requirement for the award of the

degree of Bachelor of Business Administration at Maharaja Agrasen Institute of

Management Studies, Delhi, under my guidance & direction.

To the best of my knowledge and belief the data & information presented by

him/her in the project has not been submitted earlier.

Signature

Name of the Faculty: Ms. Supriya Maheshwari

Designation: Faculty of MAIMS

ii

ACKNOWLEDGEMENT

Success is an effort bounded activity that involves co-operation of all.

I hereby take the opportunity to express my profound sense of gratitude and

reverence to all those who have helped and encouraged me towards successful

completion of the Project Report. It has been a great experience working in the

field of finance

I would like to thank my Project Guide Ms. Supriya Maheshwari for his

immense guidance, valuable help and the opportunity provided to me to

complete the project under his guidance.

I would like to thank all faculty members of Maharaja Agarsen Institute of

Management Studies for guiding and supporting me in the completion of project

from time to time.

Mohsin Ahmed BatlaEnrollment no. - 02614701709

iii

Executive Summary

The Indian economic is growing. There are various factors

contributing for the development of economy. One of the industries

which have revolutionized the economy is banking. Banks channelize

individual savings into capital formation, leading to faster growth of

an economy. Most prominent and important source of money to bank

is through Term Deposits or Fixed Deposits.

Term Deposits is an investment alternative for an individual which

provide him a fixed return over a fixed period of time. Banks offers

distinct rate of return for different period of time targeting different

segments of market.

I have undertaken my study in the area of term deposits to study and

compare rate of interest provided by different banks to the costumers.

The Project is titled “comparative study of Term Deposit Schemes by

Banks”.

iv

List of Tables

Table 3.1: Interest rate on term deposit by SBI

Table 3.2: Interest rate on fixed deposit by ICICI for amount below rupee 15 lakhs

Table 3.3: Interest rate on fixed deposit by ICICI for amount above rupee 15 lakhs upto rupee 1 crore

Table 3.4: Interest rate on fixed deposit by Standard Chartered Bank

Table 3.5: Interest rate on fixed deposit by PNB

Table 3.6: Interest rate on fixed deposit by Canara Bank

Table 4.1: comparative interest Rates

Table 4.2: comparative interest Rates (senior Citizen)

List of Charts

Chart 1.1: Structure of the organized banking sector in India.

v

List of Graphs

Graph 3.1: Interest Rate on Term Deposit by SBI

Graph 3.2: Interest rate on fixed deposit by ICICI for amount below rupee 15 lakhs

Graph 3.3: Interest rate on fixed deposit by ICICI for amount above rupee 15 lakhs upto rupee 1 crore

Graph 3.4: Interest rate on fixed deposit by Standard Chartered Bank

Graph 3.5: Interest rate on fixed deposit by PNB


vi

Table of Content

Chapter 1 - Introduction to Indian Banking Industry

- History- Rapid Growth After Liberalization policy of

1991- Reserve Bank of India- Sectors of Indian Banking- About Term Deposits

Chapter 2 - Methodology- Purpose of Study- Research Methodology

Chapter 3 - Bank Profile and Data- State bank of India- ICICI Bank- Standard Chartered Bank- Punjab National Bank- Canara Bank

Chapter 4 - Findings & Analysis- Comparative analysis of Term Deposits or

Fixed Deposits of General Public- Comparative analysis of Term Deposits or

Fixed Deposits of Senior Citizens

vii

Chapter 5 - Conclusion- Conclusion

Chapter 6 - Suggestion or Recommendations

- Suggestions

Chapter 7 - Limitations of the Study- Limitations

Bibliography

viii

CHAPTER 1

Introduction to Indian Banking

Industry

History

Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India which started in 1786, and the Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Puducherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center.

The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.

2

Rapid Growth after Liberalization policy of 1991

In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more.

Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them.

3

Reserve Bank of IndiaThe Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates, implements and monitors the monetary policy as well as it has to ensure an adequate flow of credit to productive sectors. Objectives are maintaining price stability and ensuring adequate flow of credit to productive sectors. The national economy depends on the public sector and the central bank promotes an expensive monetary policy to push the private sector since the financial market reforms of the 1990s.

Functions:

Manager of exchange controlThe central bank manages to reach the goals of the Foreign Exchange Management Act, 1999. Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.

Issuer of currencyThe bank issues and exchanges or destroys currency and coins not fit for circulation. The Objectives are giving the public adequate supply of currency of good quality and to provide loans to commercial banks to maintain or improve the GDP. The basic objectives of RBI are to issue bank notes, to maintain the currency and credit system of the country to utilize it in its best advantage, and to maintain the reserves. RBI maintains the economic structure of the country so that it can achieve the objective of price stability as well as economic development, because both objectives are diverse in themselves.

Developmental roleThe central bank has to perform a wide range of promotional functions to support national objectives and industries. The RBI faces a lot of inter-sectoral and local inflation-related problems. Some of these problems are results of the dominant part of the public sector.

Related functionsThe RBI is also a banker to the Government and performs merchant banking function for the central and the state governments. It also acts as their banker. The National Housing Bank (NHB) was established in 1988 to promote private real estate acquisition. The institution maintains banking accounts of all scheduled banks, too.

There is now an international consensus about the need to focus the tasks of a central bank upon central banking. RBI is far out of touch with such a principle, owing to the sprawling mandate described above. The recent financial turmoil world-over, has however, vindicated the Reserve Bank's role in maintaining financial stability in India.

4

Sectors of Indian Banking

Chart 1.1: Structure of the organized banking sector in India.Number of banks is in brackets.

The commercial banking structure in India consists of:

Scheduled Commercial Banks in India Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act.

There were 300 scheduled banks in India having a total network of 64,918 branches. The scheduled commercial banks

In India comprise of State bank of India and its associates (8), nationalised banks (19), foreign banks (40), private sector banks (30), co-operative banks and regional rural banks.

5

Names of Banks operating in their respective sectors

Public Sector

State Bank of India State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurashtra State Bank of Travancore Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Overseas Bank Indian Bank Oriental Bank of Commerce Punjab National Bank Punjab and Sind Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya Bank

6

Private Sector

ING Vysya Bank Ltd Axis Bank Ltd Indusind Bank Ltd ICICI Bank Ltd South Indian Bank HDFC Bank Ltd Centurion Bank Ltd Bank of Punjab Ltd IDBI Bank Ltd Jammu & Kashmir Bank Ltd.

Foreign Banks in India:

American Express Bank Ltd. ANZ Gridlays Bank Plc. Bank of America NT & SA Bank of Tokyo Ltd. Banquc Nationale de Paris Barclays Bank Plc Citi Bank N.C. Deutsche Bank A.G. Hongkong and Shanghai Banking Corporation Standard Chartered Bank. The Chase Manhattan Bank Ltd. Dresdner Bank AG.

7

http://finance.indiamart.com/investment_in_india/scheduled_commercial_banks.html

http://finance.indiamart.com/investment_in_india/scheduled_commercial_banks.html

About Term Deposits

A Fixed Deposit also known as a Term Deposit is an account which allows us to deposit money for a fixed time period. When the deposit period elapses, the depositors get interest on the amount deposited. The fixed deposit interest rates can be as high as 9.5% or more. Just deposit your savings at a bank of your choice and watch your money grow over time. Browse through the wide range of Fixed Deposit options and select the one that suits your needs the most.

The most unusual characteristic of a fixed deposit is that the funds cannot be withdrawn for a specified period of time. In most cases, fixed deposits carry duration of five years. During that time, the money remains in the account and cannot be withdrawn for any reason. Individuals, corporate entities, and even non-profit organizations that wish to set aside funds and limit their access to the funds for a period of time often find that fixed deposits are a simple way to accomplish this goal. As an added benefit, the monies in the account will earn a fixed rate of interest regardless of any fluctuations in interest rates that apply to other types of accounts.

However, both these benefits can also turn into disadvantages under certain circumstances. Because the money cannot be withdrawn until the duration is complete, the funds cannot be used even in emergency situations. Changes in the going interest rate may also rise to a point above and beyond the interest rate applied to existing deposits. This means account holders are actually earning less interest with fixed deposits than with other types of loans and accounts.

While the interest rate on fixed deposits cannot be changed, there is sometimes a way to work around the issue of obtaining use of funds in an emergency situation. At times, the lending institution where the fixed deposit is placed may be willing to extend a separate loan to the account holder, using the fixed account as collateral. While not ideal, this can at least make it possible to deal with the current financial crunch.

8

CHAPTER 2

Methodology

9

Purpose of Study

To Study Term Deposit Schemes offered by Different Banks.

To analyse and find the optimum Scheme for a particular Customer

10

Research Methodology

11

CHAPTER 3Bank Profiles and Data

State bank of India

12

Type : Public (BSE: 500112, LSE: SBID)

Industry : Banking, Financial services

Founded : 1 July 1955

Headquarters : Mumbai, Maharashtra, India

Key people : Mr. O. P. Bhatt (Chairman)

Products :

Investment Banking

Consumer Banking

Commercial Banking

Retail Banking

Private Banking

Asset Management

Pensions

Mortgages

Credit Cards

Revenue : ▲ 85,962.07 crore (US$19.34 billion) (2010)

Profit : ▲ 9,166.05 crore (US$2.06 billion) (2010)

Total assets : ▲ $323.04 billion (2010)

Total equity : ▲ $18.519 billion (2010)

Owner (s): Government of India

Employees : 200,299 (2010)

Website : www. Statebankofindia.com

Introduction

13

http://en.wikipedia.org/wiki/Indian_rupee


State Bank of India (Hindi: भा�रती�य स्टेटे बैं�क) (SBI) is the largest state-owned banking and financial services company in India, by almost every parameter - revenues, profits, assets, market capitalization, etc. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to form Imperial Bank of India, which in turn became State Bank of India. The Government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the Government took over the stake held by the Reserve Bank of India.

SBI provides a range of banking products through its vast network of branches in India and overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. With an asset base of $352 billion and $285 billion in deposits, it is a regional banking behemoth. It has a market share among Indian commercial banks of about 20% in deposits and advances, and SBI accounts for almost one-fifth of the nation's loans.

SBI has tried to reduce over-staffing by computerizing operations and "golden handshake" schemes that led to a flight of its best and brightest managers. These managers took the retirement allowances and then went on to become senior managers in new private sector banks.

The State bank of India is the 29th most reputed company in the world according to Forbes.

Term Deposit

14

Highlights Safety - We understand the value of your hard earned money and continue to deliver on our promise of safety and security over 200 years.

Liquidity Loan /overdraft facility: You can avail a loan/overdraft against your deposit. SBI provides you loan / overdraft up to 90% of your deposit amount at nominal cost. So you continue to earn interest in your deposit and still can meet your urgent financial requirements. Premature WithdrawalInterest to be charged on premature withdrawal of term deposits at 1.00% below the rate applicable for the period deposit has remained with the Bank.

Transferability- Transfer of Term Deposits between our wide networks of branches without any charge.

Compounding / Flexible / Timely Payment of Interest - Under our Special Term Deposit Scheme, interest accrues in your account and gets compounded quarterly. Besides, we assure 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 Bank/Current account.

Term Deposits are available at all SBI Branches Easy and convenient access of 24X7 information at SBI Internet Banking. Nomination Facility - Available.

Automatic Renewals - There is no need for you to keep track of the maturity of your deposits. Your deposits with us 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. Flexibility to convert your Special Term Deposit to Term Deposit and vice versa

You can convert your special Term Deposit to a Term Deposit to receive monthly/quarterly interest payments to match your financial requirements. Quarterly interest at calendar quarter is also available.

You can also convert your Term Deposit to a Special Term Deposit, which provides compounded rate of interest to multiply your money faster.

Interest rates for Domestic Term DepositsBelow Rupees One Crore

15

Effective from the 01.10.2010 would be as under:

Table 3.1: Interest rate on term deposit by SBI

Graphical Representation of Interest Rates

16

Tenors General Senior

Citizen

15 days to 45 days 4.00 4.00

46 days to 90 days 4.00 4.00

91 days to 180 days 5.50 5.50

181 days to less than 1 year 6.00 6.00

1 year to 554 days 7.00 7.50

555 days 7.50 8.00

556 days to less than 2 years 7.25 7.75

2 years to 999 days 7.50 8.00

1000 days 7.75 8.25

1001days to less than 3 years 7.25 7.75

3 year to less than 5 years 7.25 7.75

5 years to less than 8 years 7.50 8.00

8 years and up to 10 years 7.75 8.25

15 days t

o 45 days

46 days t

o 90 days

91 days t

o 180 days

181 days t

o less

than 1 ye

ar

1 year

to 554 days

555 days

556 days t

o less

than 2 ye

ars

2 years

to 999 day

s

1000 days

1001days t

o less

than 3 ye

ars

3 year

to less

than 5 ye

ars

5 years

to le

ss than

8 years

8 years

and up to

10 years

0

1

2

3

4

5

6

7

8

9

GeneralSenior Citizen


ICICI Bank

17

Type : Public (BSE: 532174, NYSE: IBN)


Founded : 1955

Headquarters: Mumbai, Maharashtra, India

Key people :

K.V. Kamath (Chairman)

Chanda Kochhar (MD & CEO)

N. S. Kannan (CFO)

Products :

Investment Banking

Commercial Banking

Retail Banking

Private Banking

Asset Management

Mortgages

Credit Cards

Revenue: ▲ 59,599.77 crore (US$12.93 billion) (2009)

Operating income: ▲ 6,578.64 crore (US$1.43 billion) (2010)

Profit: ▲ 4,843.41 crore (US$1.05 billion) (2010)

Total assets: ▲ US$ 100.10 billion (2010)

Employees: 35,000+ (2009)

Website : www.ICICIBank.com

Introduction

18




ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is a major banking and financial services organization in India. It is the third largest bank in India and the largest private sector bank in India by market capitalization. The bank also has a network of 2,016 branches (as on 31 March 2010) and about 5,219 ATMs in India and presence in 18 countries, as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialization subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank's shares are listed on the stock exchanges at BSE, NSE, Kolkata and Vadodara (formerly Baroda) ; its ADRs trade on the New York Stock Exchange (NYSE).

The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly owned subsidiaries, branches and representatives offices in 19 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.

Fixed Deposit

Wide range of tenures.

19

Choice of investment plans. Partial withdrawal permitted. Safe custody of fixed deposit receipts. Auto renewal possible. Loan facility available.

Features

You can invest in our Fixed Deposit for as long as you wish between 7 days to 10 years.

All fixed deposits come with a set choice of investment plans. Fixed Rate Deposit accounts also provide Fixed Loans. Re-investment Fixed Deposit rates do not change but work likes a Recurring Debit Account transaction. In other words, Re-investment Plans are compounded over traditional deposits and hence are more lucrative over different time periods.

Benefits

Fixed Deposits at ICICI Bank comes with nomination facility. We also offer online access to your Fixed Deposits through our Internet Banking channel. Internet Banking at ICICI Bank allows you to connect your Credit Card, Loan and your Fixed Deposit with your savings account.

In re-investment deposits, the interest is compounded quarterly and reinvested with the principal.

Interest rates for Fixed DepositsEffective from the 01.10.2010 would be as under:

20

Interest rates on Fixed Deposit For amount below Rupee 15 lakhs

Table 3.2: Interest rate on fixed deposit by ICICI for amount Below rupee 15 lakhs


21


Citizen

7 days to 60 days 3.75 4.25

61 days to 90 days 3.75 4.75

91 days to 184 days 5.75 6.25

185 days to 269 days 6.25 6.75


1 year to 389 days 6.75 7.25

390 days 7.25 7.75

391 days to 589 days 6.75 7.25

590 days 7.50 8.00


2 years to 789 days 7.50 8.00

790 days 7.75 8.25

791 days to 989 days 7.50 8.00

990 days 8.00 8.50



Tax Saver FD 80C (5 year) –

Upto Rs. 1 lacks

8.00 8.50

7 days t

o 60 days

61 days t

o 90 days

91 days t

o 184 days

185 days t

o 269 days

270 days t

o less

than 1 ye

ar

1 year

to 389 days

390 days

391 days t

o 589 days

590 days

591 days t

o less

than 2 ye

ar

2 years

to 789 day

s

790 days

791 days t

o 989 days

990 days

991 days t

o less

than 3 ye

ars

3 years

to le

ss than

10 years

Tax S

aver

FD 80C (5

year)

– Upto Rs. 1

lac

0

1

2

3

4

5

6

7

8

9


Graph 3.2: Interest rate on fixed deposit by ICICI for amount Below rupee 15 lakhs

Interest rates on Fixed Deposit For amount above Rupee 15 lakhs upto rupee 1 crore

22

Table 3.3: Interest rate on fixed deposit by ICICI for amount Above rupee 15 lakhs upto rupee 1 crore


23


Citizen

7 days to 60 days 3.75 4.25

61 days to 90 days 4.25 4.75

91 days to 120 days 5.25 5.75

121 days to 184 days 5.50 6.00

185 days to 269 days 6.25 6.75


1 year to 389 days 6.75 7.25

390 days 7.25 7.75

391 days to 589 days 6.75 7.25

590 days 7.50 8.00


2 years to 789 days 7.50 8.00

790 days 7.75 8.25

791 days to 989 days 7.50 8.00

990 days 8.00 8.50



7 days t

o 60 days

61 days t

o 90 days

91 days t

o 120 days

121 days t

o 184 days

185 days t

o 269 days

270 days t

o less

than 1 ye

ar

1 year

to 389 days

390 days

391 days t

o 589 days

590 days

591 days t

o less

than 2 ye

ars

2 years

to 789 day

s

790 days

791 days t

o 989 days

990 days

991 days t

o less

than 3 ye

ars

3 years

to le

ss than

10 years

0

1

2

3

4

5

6

7

8

9


Graph 3.3: Interest rate on fixed deposit by ICICI for amount Above rupee 15 lakhs upto rupee 1 crore

Standard Chartered Bank

24

Type : PublicLSE: STANSEHK: 2888OTCBB: SCBFFNSE: STAN

Industry : Banking, Financial services Area served : Worldwide Key people :

John W. Peace (Chairman of the Board)Peter A. Sands (CEO) Jaspal Singh Bindra (Director and CEO, Asia)

Products :Finance and insuranceConsumer BankingCorporate BankingInvestment BankingInvestment ManagementPrivate BankingPrivate EquityMortgage loansCredit Cards

Revenue : ▲ $15.184 billion (2009)

Operating income: ▲ $5.151 billion (2009) Net income : ▲ $3.477 billion (2009) Total assets : ▲ $436.653 billion (2009) Total equity : ▲ $27.930 billion (2009) Employees : 80,000 (2010) Website : www.StandardChartered.com, www.StandardChartered.co.in

Introduction

25

The Chartered Bank opened its first overseas branch in India, at Kolkata, on 12 April 1858. Eight years later the Kolkata agent described the Bank's credit locally as splendid and its business as flourishing, particularly the substantial turnover in rice bills with the leading Arab firms. When The Chartered Bank first established itself in India, Kolkata was the most important commercial city, and was the centre of the jute and indigo trades. With the growth of the cotton trade and the opening of the Suez Canal in 1869, Bombay took over from Kolkata as India's main trade centre. Today the Bank's branches and sub-branches in India are directed and administered from Mumbai (Bombay) with Kolkata remaining an important trading and banking centre.

Standard Chartered Bank is the largest Foreign Bank Sector in India.

Standard Chartered Bank is a British financial services company headquartered in London, England with operations in more than seventy countries. It operates a network of over 1,700 branches and outlets (including subsidiaries, associates and joint ventures) and employs 80,000 people.

Despite its British base, it has few customers in the United Kingdom and around 90% of its profits come from Asia, Africa, and the Middle East. Because the bank's history is entwined with the development of the British Empire, its operations lie predominantly in former British colonies, though over the past two decades it has expanded into countries that have historically had little British influence. It aims to provide a safe regulatory bridge between these developing economies.

It now focuses on consumer, corporate, and institutional banking, and on the provision of treasury services—areas in which the Group had particular strength and expertise.

Standard Chartered have recently signed a four-year sponsorship deal with the football club Liverpool F.C, which started on 1 July 2010.

Standard Chartered is listed on the London Stock Exchange, Hong Kong Stock Exchange and the Indian Stock Exchanges and is a constituent of the FTSE 100 Index. Its largest shareholder is Temasek Holdings.

Term Deposit

26

With a wide variety of options to suit different needs, including Short Term Deposit, Reinvestment Deposit, Simple Fixed Deposit and Monthly Income Plan, they can be opened by individuals, proprietors, partnership and limited companies, societies, clubs, associations and HUFs. In case you need to withdraw amounts in excess of what is available in your transaction account, we will break your deposit for the exact amount you require. The rest of the deposit continues earning the original high interest.

Tenor ranges from 15 days to 5 years (For deposits of Rs. 15 Lakhs and above, minimum tenor is 7 days)

Minimum amount of first deposit is Rs.50,000. Subsequent deposit can be made of a minimum value of Rs.10,000 and in multiples of Rs.1,000 thereafter

Options of simple interest and compound interest Auto renewal facility Overdraft facility available against deposit Preferential rates given for large value deposits of Rs.15 Lakhs and above

Interest Rate on Term Deposit for Term Depositsw.e.f. October 01, 2010

27

Table 3.4 : Interest rate on fixed deposit

by Standard Chartered Bank


28


Citizen

15-29 days 4.50 4.50

30-45 days 4.80 4.80

46-59 days 4.85 4.85

60-89 days 4.90 4.90

90-179 days 5.55 5.55

180 days <= 210 days 5.60 5.60

211 days 6.50 5.60

212 days <= 260 days 5.60 5.60

261 days 5.60 7.00

262 days < 1 year 5.60 5.60

1 year <= 398 days 5.70 5.70

399 days 7.25 7.50

400 days < 18 months 5.70 5.70

>=18 Months < 2 years 6.10 6.10

2 years < 3 years 6.25 6.25

3 years < 4 years 6.50 6.50

4 years <= 5 years 7.00 7.00%

15-29 days

30-45 days

46-59 days

60-89 days

90-179 days

180 days <

= 210 day

s

211 days

212 days <

= 260 day

s

261 days

262 days <

1 year

1 year

<= 398 day

s

399 days

400 days <

18 months

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%


Graph 3.4: Interest rate on fixed deposit by Standard Chartered Bank

Punjab National Bank

29

Type : Public (BSE: 532461)

Industry : Banking, Financial services, Insurance

Founded : Lahore (1895)

Headquarters : New Delhi, India

Products :

Investment Banking

Consumer Banking

Commercial Banking

Retail Banking

Private Banking

Asset Management

Pensions

Mortgage loans

Credit Cards

Life Insurance

Revenue : ▲ US$2.32 billion (2005)

Employees : 580,300

Website : www.PNBIndia.com

Punjab National Bank (PNB) is a state-owned financial services company located in New Delhi, India. It was registered on May 19, 1894 under the Indian Companies Act with its office in Anarkali Bazaar Lahore. Today, the Bank is the second largest government-owned commercial bank in India with about 5000 branches across 764 cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the world by the Bankers Almanac, London. The bank's total assets for financial year 2007 were about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong Kong, Dubai and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai.

Term Deposit

Features:

30

Initial Deposit of Rs.1000/-only, and thereafter in convenient multiples of any amount of Rupee one

Period of Deposit: (a) Maturity Option: For any period from 15 days to 120 months-For a single Term Deposit less than Rs. 15 lacks and for any period from 7 days to 120 months-For a single Deposit of Rs. 15 lacks & above.(b) Income Option: For any period from 6 months to 120 months.

At PAR Collection of Fixed Deposit Receipt Payable at par at all CBS branches(premature payment, loans another miscellaneous

matters before maturity of the FDR shall be attended to only by the issuing branch) Multiple options available for interest payment viz.

Monthly/Quarterly/Half-Yearly/Yearly or on maturity For an amount of Rs. 10,000/- and above overdraft with cheque book facility is

available, to enable use of deposits. The customer shall also be at liberty to make use of the facility through ATM-cum-Debit Card under 'Anywhere-Anytime Banking'. It will enable customers to have freedom to utilise their Fixed Deposits as and when needed without even coming to the Bank. The interest is chargeable only for the amount and period for which the overdraft facility has been availed; the illiterate and blind persons can also open the account without exercising the option of Overdraft Facility.

Margin and rate of interest on Loans against deposits under the scheme shall be as per prescribed guidelines which shall be subject to modifications from time to time

Automatic payment of LOCKER rent out of Interest proceeds Conversion facility regarding mode of payment of interest allowed;(provided FDR has

been issued for a period of 12 months or more and remaining period of FD is more than 6 months) without invoking any penal provision

Penalty clause, as per Bank’s guidelines, would be applicable to all term deposits schemes including recurring deposits.

Automatic Renewal facility is provided as per option exercised by the depositor Availability of premature extension Part withdrawal in multiples of Rs.1000/- without loss of interest on remaining FDR

Domestic Term Deposit Interest Rates (% p.a.)w.e.f. 01.10.2010

31

Table 3.5: Interest rate on fixed deposit by PNB


32


Citizen

7 to 14 days 2.50 3.00

15 to 45 days 3.00 3.50

46 to 60 days 4.00 4.50

61 to 90 days 4.00 4.50

91 to 179 days 5.50 6.00

180 days to 270 Days 6.25 6.75


1 year to less than 2 years 7.25 7.75




9 years to 10years 8.00 8.50

7 to 14 day

s

15 to 45 day

s

46 to 60 day

s

61 to 90 day

s

91 to 179 day

s

180 days t

o 270 Days

271 days t

o less

than 1 ye

ar

1 year

to less

than 2 ye

ars

2 years

to le

ss than

3 years

3 years

to le

ss than

5 years

5 years

to le

ss than

9 years

9 years

to 10ye

ars

9 years

to 10ye

ars

0

1

2

3

4

5

6

7

8

9


Graph 3.5: Interest rate on fixed deposit by PNB

Canara Bank

33

Type : Public (BSE: 532483, NSE: CANBK)


Founded : Canara Bank Hindu Permanent Fund (1906)

Canara Bank Ltd (1910)

Canara Bank (1969)

Headquarters : Bangalore, India

Key people : S.Raman, (Chairman & MD)

Jagdish Pai K L , (Executive Director)

Products :

Investment Banking

Consumer Banking

Commercial Banking

Retail Banking

Private Banking

Asset Management

Pensions

Mortgages

Credit Cards

Employees : 47,389 (2004–05)

Website : www.Canarabank.com

Canara Bank (Hindi: क नर� बैं�क) is a state-owned financial services company in India. It was

established in 1906, which makes it among the older Indian banks. As on 2009 November, the

bank had a network of 3057 branches, spread across India. The bank also has offices abroad

in London, Hong Kong, Moscow, Shanghai, Doha, and Dubai. In terms of business it is one

of the largest nationalized commercial banks in India, with a total business of about Rs.2

trillion (US$ 44 Billion).

Fixed Deposit

34

Details:

FIXED DEPOSIT

ELIGIBILITYIndividual, Joint (not more than 4), a Guardian on behalf of a minor, HUF, Partnership, a Company, Association or any other Institution

INVESTMENTMinimum - Rs.1000Maximum - No ceiling

PERIOD OF DEPOSIT

Minimum 15 days (7-14 days – Only for single deposit of Rs.5 lakhs and above) Maximum 120 months

INTEREST RATEDepending upon the period of the deposit as prevailing from time to time.

PERIODICITY OF INTEREST PAYMENT

Monthly (at discounted rates), Quarterly, Half-yearly or Annual intervals as per depositor's choice

SPECIAL RATE FOR SENIOR CITIZEN

Additional 0.50% rate of interest for deposits less than Rs.1 crore.

TDS ON INTEREST

Applicable

NOMINATION FACILITY

Available

LOAN FACILITY Available upto 90% of the deposit amount

PENALTY FOR PRE-MATURE CLOSURE

No penal cut.

EXTRA FACILITY

Facility of part withdrawal of deposits in units of Rs.1000/- keeping the rest of the deposit to earn contracted rate of interest.

APPLICATION & DOCUMENTS

Application FormForm 60 or 61 (if customer does not have PAN Card)Photograph of depositor/s (2 copies)Proof of address as per KYC NormsAny other related documents as applicable to proprietor ship concern, Partnership Firm, Company, HUF etc

Domestic Term Deposit Interest Rates (% p.a.)w.e.f. 15.09.2010

35

Table 3.6: Interest rate on fixed deposit by Canara Bank

Graphical Representation of Interest Rates36

Tenors General

Public

Senior

Citizen

7 days to 14 days 2.50 3.00

15 days to 30 days 3.50 4.00

31 days to 45 days 3.50 4.00

46 days to 90 days 4.00 4.50

91 days to 179 days 5.50 6.00

180 days to 269 days 6.00 6.50


1 year & above to 554 days 7.00 7.50

555 days 7.25 7.75

556 days & above to less than 2

years7.00 7.50

2 years & above to 999 days 7.25 7.75

1000 days 7.50 8.00

1001 days & above to less than 3

years7.25 7.75

3 years & above to less than 5

years7.25 7.75

5 years & above to less than 8

years7.50 8.50

8 years & above to 10 years 7.75 8.75

7 days t

o 14 days

15 days t

o 30 days

31 days t

o 45 days

46 days t

o 90 days

91 days t

o 179 days

180 days t

o 269 days

270 days t

o less

than 1 ye

ar

1 year

& above

to 554 day

s

555 days

556 days &

above

to le

ss than

2 years

2 years

& ab

ove to

999 days

1000 days

1001 days &

above

to le

ss than

3 years

3 years

& ab

ove to

less

than 5 ye

ars

5 years

& ab

ove to

less

than 8 ye

ars

8 years

& ab

ove to

10 years

0

1

2

3

4

5

6

7

8

9

10



37

CHAPTER 4

Analysis

&

Findings

AB

CD

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

X

Y

Z

XYZ

38

Comparative analysis of

Term Deposit

or

Fixed Deposit

for

General Public

39

Table Showing Different Interest Rates by BanksFor Different Time Period

Time PeriodDays/ Year

(upper Limits)

SBI ICICI(Upto Rs. 15 Lakhs)

ICICI (Rs. 15

Lakhs to1 Crore)

SCB PNB Canara

7 - - - - - -14 - 3.75 3.75 - 2.5 2.529 4 3.75 3.75 4.5 3 3.545 4 3.75 3.75 4.8 3 3.560 4 3.75 3.75 4.85 4 490 4 3.75 4.25 4.9 4 4120 5.5 5.75 5.25 5.55 5.5 5.5180 5.5 5.5 5.5 5.5 5.5 5.5210 6 6.25 6.25 5.6 6.25 6270 6 6.25 6.25 6.5 6.25 61yr 6 6.5 6.5 5.6 6.5 6389 7 6.75 6.75 5.7 7.25 7390 7 7.25 7.25 5.7 7.25 7391 7 6.75 6.75 5.7 7.25 7399 7 6.75 6.75 7.25 7.25 7400 7 6.75 6.75 5.7 7.25 7540 7.5 6.75 6.75 6.1 7.25 7555 7.5 6.75 6.75 6.1 7.25 7.25556 7.25 6.75 6.75 6.1 7.25 7590 7.25 7.5 7.5 6.1 7.25 7591 7.25 6.75 6.75 6.1 7.25 72yr 7.5 7.5 7.5 6.25 7.25 7.25790 7.5 7.75 7.75 6.25 7.25 7.25791 7.5 7.5 7.5 6.25 7.25 7.25990 7.5 8 8 6.25 7.25 7.25991 7.5 7.5 7.5 6.25 7.25 7.251000 7.75 7.5 7.5 6.25 7.25 7.51001 7.25 7.5 7.5 6.25 7.25 7.253yr 7.25 8 8 6.5 7.5 7.254yr 7.25 8 8 7 7.5 7.255yr 7.5 8 8 - 7.75 7.58yr 7.75 8 8 - 7.75 7.759yr 7.75 8 8 - 8 7.7510yr 7.75 8 8 - 8 7.75

Table 4.1: comparative interest Rates

Short Term Investment (less than 1 year)40

For investment less than 14 days Only ICICI, PNB and Canara Bank are giving this option Out of three, ICICI bank is giving highest rate of interest of 3.75%

For Investment between 14 to 90 days In this Segment Standard Chartered id providing Highest Rate of interest

ranging from 4.5% to 4.9 %

For Investment between 90 days to 1 yearStandard chartered and ICICI are giving highest interest.

Highest interest in this segment is given by Standard Chartered for investment made for 270 day giving interest of 6.5%

For short-term investment, Standard Chartered Bank is recommended for investment in Fixed Deposits. It is providing the highest rate of interest in this segment.

Medium Term Investment (1 to 2 years)

41

For Investment between 1 year to 400 daysPunjab National Bank is providing the interest of 7.25% for investments

made for 1 year to 400 days.

ICICI Bank is also giving interest rate of 7.25% for investments made for 390 days

For Investment between 400 days to 2 years In this segment, ICICI , PNB and SBI are giving tough competition.

SBI and ICICI are providing highest rate of interest of 7.5% for 540 days and 590 days respectively.

ICICI and SBI are favorites in this segment for providing 7.5% of interest. However PNB can also be considered, if investment period is less than 400 days.

Long Term Investment (2 years and above)

42

For Investment between 2 year to 3 daysAgain Segment is ruled by SBI and ICICI by providing highest rate of

interest

ICICI is giving 8% of interest for investment made for 990 days.

SBI is giving 7.75% of

For Investment between 3 to 8 Year ICICI is giving highest rate of interest of 8% for investment of 3 to 8 year

Standard Chartered does not provide Fixed Deposits for 5 year and above

For Investment 8 year and aboveBoth ICICI and PNB are providing Interest of 8% in this Segment.

ICICI is mostly recommended for Long Term Investments as they are providing highest rate of interest. However PNB can also be considered, if investment period is between 8 to 10 years.

43

Comparative analysis of

Term Deposit

or

Fixed Deposit

for

Senior Citizens

Table Showing Different Interest Rates by BanksFor Different Time Period

44

Time PeriodDays/ Year

(upper Limits)

SBI ICICI(Upto Rs. 15 Lakhs)

ICICI (Rs. 15

Lakhs to1 Crore)

SCB PNB Canara

45

7 - - - - - -14 - 4.25 4.25 - 3 329 4 4.25 4.25 4.5 3.5 445 4 4.25 4.25 4.8 3.5 460 4 4.25 4.25 4.85 4.5 590 4 4.75 4.75 4.9 4.5 5120 5.5 6.25 5.75 5.55 6 6180 5.5 6.25 6 5.5 6 6210 6 6.75 6.75 5.6 6.75 7270 6 6.75 6.75 7 6.75 71yr 6 7 7 5.6 7 7389 7.5 7.25 7.25 5.7 7.75 8390 7.5 7.75 7.75 5.7 7.75 8391 7.5 7.25 7.25 5.7 7.75 8399 7.5 7.25 7.25 7.5 7.75 8400 7.5 7.25 7.25 5.7 7.75 8540 8 7.25 7.25 6.1 7.75 8555 8 7.25 7.25 6.1 7.75 8556 7.75 7.25 7.25 6.1 7.75 8590 7.75 8 8 6.1 7.75 8591 7.75 7.25 7.25 6.1 7.75 82yr 8 8 8 6.25 7.75 8790 8 8.2 8.25 6.25 7.75 8791 8 8 8 6.25 7.75 8990 8 8.5 8.5 6.25 7.75 8991 8 8 8 6.25 7.75 81000 8.25 8 8 6.25 7.75 81001 7.75 8 8 6.25 7.75 83yr 7.75 8.5 8.5 6.5 8 84yr 7.75 8.5 8.5 7 8 85yr 8 8.5 8.5 - 8.25 88yr 8.25 8.5 8.5 - 8.25 99yr 8.25 8.5 8.5 - 8.5 910yr 8.25 8.5 8.5 - 8.5 9

Table 4.2 : comparative interest Rates (senior Citizen)

Short Term Investment (less than 1 year)

For investment less than 14 days Standard Chartered and SBI don’t provide fixed deposits for less than 14

days ICICI bank is giving highest rate of interest of 4.25%

46

For Investment between 14 to 90 daysHighest interest is given by Canara bank at rate of 5% for 60 to 90 days

Standard chartered also provides competitive interest rates for 15 to 59 days

For Investment between 90 days to 1 yearAgain Canara Bank is giving highest rate of interest of 7% for investment

made for 210 days to 1 year.

Standard Chartered also Provide same 7 % interest for invest made for 270 days to 1 year.

For short-term investment, Canara bank is best choice for senior Citizens. However in some cases Standard Chartered can also be considered.

Medium Term Investment (1 to 2 years)

For Investment between 1 year to 400 days

47

Canara Bank is consistently providing highest rate of interest in this segment.

Rate of interest provided by canara bank is 8%

For Investment between 400 days to 2 yearsAgain Canara bank is providing highest rate of 8%.

SBI and ICICI are also giving same rate of interest (8%) for invest made for 540 days and 590 days respectively.

Canara Bank is providing highest rate of interest of 8% throughout the segment for senior citizens. It is the best choice of the segment.

Long Term Investment (2 years and Above)

For Investment between 2 year to 3 days

48

Highest rate of interest is provided by ICICI bank for investment made for 990 days, 8.5% interest rate.

Also SBI and Canara bank is providing maximum 8% interest in most of segment.

For Investment between 3 to 8 YearHere ICICI is providing maximum interest of 8.5% throughout the

segment.

For Investment 8 year and aboveCanara Bank is providing interest rate of 9% throughout the segment

which is highest.

ICICI and Canara Bank is Recommended for their respective time period where they are providing high interest rates to senior citizens.

CHAPTER 549

Conclusion

Conclusion

50

For General Public

Standard Chartered Bank is recommended for investment in Fixed Deposits made for Less than 1 Year

SBI and ICICI Bank are providing best rate of best rate of interest for invest made for 1 to 2 years

ICICI Bank is best for invest made for 3 year and above.

For Senior Citizen

Canara Bank is most suitable bank to invest in Fixed Deposits for Senior Citizens, it is providing highest rate of interest throughout the section

ICICI bank can also be considered if invest is made for more than 3 years

CHAPTER 6

51

Suggestions

Or

Recommendations

Suggestions

Interest accrued on fixed deposits is taxed while money market

mutual funds are tax-exempt. If you are in the low tax bracket,

FD is a good investment option. But if you are one who falls

52

under the high tax bracket, investment in mutual fund short-term

debt fund or liquid or cash funds will fetch you good returns.

Instead of putting a big amount in one fixed deposit, break it into

more than one fixed deposits of small amounts so if in future

you require liquidity you can breaks a small deposit and save

interest and charges on cancellation of your fixed deposit.

Before putting your money in fixed deposits, check the financial

position of the bank. Bank offer different rate of interest choose

which suits you best.

CHAPTER 7

53

Limitations

of the Study

LIMITATIONS

54

Although the project has been worked out at its best yet there are

some limitations, which cannot be overlooked. Had these limitations

been overcome, the findings would be accurate.

Some of the limitations are:

2) Data constraint:

All the data that has been collected for this project, has been taken from secondary sources like websites, magazines, newspapers and book.

1) Time constraint:

Time was really a limiting factoring the project. It’s really difficult to

work out such a large project between two months time.

BIBLIOGAPHY

55

WEBSITES

www.canarabank.com

www.icicibank.com

www.paisawaisa.com

www.pnbindia.in

www.rupeetimes.com

www.standardchartered.co.in

www.statebankofindia.com

www.Wikipedia.com

56

Project - Term Deposit Scheme by Banks

Documents

term deposits chapter

area of term deposits

fixed return

canara bank comparative

fixed period of time

bank profile

project guide

distinct rate of return