Popular Financial Products in India – July

In this article I shall provide a summary of those popular financial products in India that I have covered in July.

Earlier in this article Popular Financial Products in India – June, I had provided a summary of financial products that I had discussed in June.

There are different types of financial products available in India. They all belong to three main categories – equity or shares, debt or bonds and insurance.

Equity
I did not cover any product under this category in July.

Debt
I covered two products under debt in July – Recurring Deposit (RD) and Post Office Time Deposit (POTD).

Insurance and Pension
In this category, I discussed three products – Pradhan Mantri Jeevan Jyoti Bima Yojana, Life Insurance and LIC e-Term Plan.

Post Office Time Deposit (POTD)

The Post Office Time Deposit (POTD) is a term deposit product. It is almost same as a Bank Fixed Deposit.

An investor who saves money in a Post Office Time Deposit account for a certain period will get back the money and interest income at maturity.

The returns are guaranteed as Post Office Time Deposit is a government product. A major difference with a Bank Fixed Deposit is that an investor can invest either 1 year, or 2 years or 3 years or 5 years.

The primary aim of the Post Office Time Deposit is to give an assured return to its investors. POTD is a small savings deposit scheme for the common man.

Read more here at Post Office Time Deposit Account Review.

Recurring Deposit (RD)

Recurring Deposit is a special kind of deposit product offered by banks and post offices in India.

In a recurring deposit a person invests a fixed amount every month for a specified duration. At the end, he gets back his investment and interest accrued.

A recurring deposit earns interest at same rates as a fixed deposit. Money invested in a recurring deposit account earns compound interest on a quarterly basis. Interest is paid only on maturity.

If one has financial goals for the future but can afford to invest small amounts only, a recurring deposit is an ideal product.

A recurring deposit is a safe financial product and offers reasonably good returns.

Read more here at Recurring Deposit – An Introduction.

Life Insurance

Life Insurance is a financial product that offers financial protection to a person’s family if he dies.

When someone dies, his family suffers emotional loss and maybe also financial loss. One cannot compensate emotional loss. However financial loss can be replaced using life insurance.

Life Insurance is a contact between a person (the Insured) and a company (the Insurer).

  • The person pays a sum of money known as premium to the Insurer.
  • In return the insurer promises to pay the person’s family or beneficiary a certain amount of money known as “Sum assured” if the person suddenly dies.

To know more about Life Insurance read Life Insurance Brief Introduction.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a one year Term Life Insurance Scheme. It offers financial protection against sudden death due to any reason natural or accidental.

In this scheme, a person has to pay Rs 330 insurance premium. If he dies, his beneficiary will get upto Rs 2 lakhs insurance cover.

PMJJBY is for one year. The person has to renew it every year.

To know more read Pradhan Mantri Jeevan Jyoti Bima Yojana Review.

LIC e-Term Plan

LIC e-Term Plan is a term life insurance policy which provides financial protection to a person’s family in case of his sudden death. If the person survives till the end of the policy term, nothing is payable to him.

A term life insurance provides a substantial amount of protection against death at fairly low prices.

LIC e-Term Plan is a very good term insurance product from LIC which is one of the most trusted names in insurance in India. It is cheaper compared to its offline version and quite convenient and useful.

To know more about LIC e-Term plan read LIC e-Term Plan Review.

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A Few Last Words

That’s it for today. Hope you have been enjoying the posts.

I hope you found this summary of financial products in India covered in July useful.

If you have something to add please leave a comment in the post. Please feel free to contact me.

Before making any investment decision, please contact your financial adviser. I have provided this article on Popular Financial Products in India for educational purpose only.

Subhodeep Mukhopadhyay

I am a Management Consultant in the Education Sector. In my previous corporate career, I have worked in Banking, Private Equity and Software industry. I am an MBA in Finance/ Computer Engineer and enjoy doing equity research and financial analysis in my free time.

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