Major Expert Points for Banking Investment | Role of Investment Bank, Schemes, Policies

Major Expert Points For Banking Investment

Major Expert Points For Banking InvestmentInvestment bank acts a bridge between companies and the investors. Although the bank provides complete guidance before investing, one should be familiar with Major Expert Points for Banking Investment before making any investment in bank.   

The main role of investment banks is to help the large businesses in procuring finance from any means including stock offerings, bond issues or derivative products. Investment in stock or bonds may covers risk so one should read the terms and conditions carefully before applying for any investment schemes or policies.

There are numerous of benefits offered by banks to the investors in different banking schemes and policies, by we should also consider the fact that Banking Investment may subject to market risk and hence it is really important to check out the Major Expert Points For Banking Investment.

Major Expert Points For Banking Investment

  • Fixed deposit schemes helps us to save tax and ensure great returns with high interest rates and there will be a lock in period of 5 years  and you can invest minimum of INR 100 to maximum of INR 100,000. There are two types of deposits offered under this schemes the first one will provide quarterly compounded/reinvestment of interest. The second one will provide quarterly payout of interest to the depositor.
  • Recurring deposit help people to deposit fixed amount who have regular income. Depositor can also avail loans against collateral of Recurring amount. The rate of interest will be similar as in Fixed deposit schemes. TDS is not applicable to RDs. However, income tax must be paid on interest earned on Recurring Deposits.
  • Saving accounts allows customers to set aside liquid assets while earning a return. Withdrawals from a saving account are costlier and time consuming. It has limited number of free transfers and transactions.
  • Current account deposits does not offer interest and mainly used by business people for doing any number of transactions.
  • Portfolio investment scheme is offered by all the federal banks throughout India. An NRI Customer can purchase and sell shares through stock exchanges.
  • Monthly income scheme account offered by post offices in India. It is well suited for retired employees and senior citizens. Rate of interest will be 8.40% and maturity period will be five years. There will be no bonus on maturity. You can open two types of accounts first one is single and the other one is Joint with a min of RS 1500.
  • Public provident fund account ideally suited for both salaried and self employed customers. NRI’s are not eligible for such schemes. Investment of upto RS 1,00,000 per annum qualifies for  rebate. There will be yearly rate of interest of 8.7%.

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Role of Investment Bank

The sale of stocks and bonds is the most common way for a company to raise capital from public. But to execute this, the companies require special expertise, from pricing these financial instruments to maximize revenue to meet the requirements.

The investment bank acts like an advisor for companies and explains how to cover their financial needs. Investment Bank also helps the investors know about the risk involved in investment and also assist them in raising funds.

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How do investment banks make money from offering these services to their clients?

Investment banks get their income from:

  • Fees: charged for advice, charged for keeping availability of money for clients, providing finance, arranging finance for clients from other parties, by offering trading services, investment services and research.
  • Interest: Indicates income from loans rendered.
  • Dividends: It represents income from investments made in shares.
  • Investments: It indicates profits from investments made.
  • Trading: It implies the profit made from buying and selling securities.

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