PROJECT REPORT

On

“A COMPARATIVE ANALYSIS OF HDFC BANK FIXED DEPOSIT”

Submitted in the partial fulfillment of the requirement of the degree of Master of Business Administration (Business Economics)

(Session: 2007-09)

Under the Supervision of: Submitted By:

Dr. Sanjay Nandal SURENDER SINGHFaculty Roll No-4907Deptt. Of Business Economics MBA (BE) 4th Sem

Submitted To:

Department Of Business Economics

Maharshi Dayanand University, Rohtak

1

DECLARATION:

I, Surender Singh Roll No. 4907 M.B.A (B.E) 4th Semester of Department of Business

Economics hereby declare that the project Report entitled “A Comparative Analysis Of

HDFC fixed Deposit ” is an original work and the same has not been submitted to any

other institute for the award of any other degree.

The seminar presentation was made on ________. The suggestions as approved by the

faculty were dully incorporated

Signature Of Supervisor Signature of the Candidate

Countersigned

Head of Department

2

ACKNOWLEDGEMENT:

I want to clarify that this is not just a formal acknowledgement but also a sincere note of

thanks and regard from my side. I feel a deep sense of gratitude and affection for those who

were associated with the project and without whose cooperation and guidance this research

could not have been conducted properly.

I would especially like to thank Dr. SANJAY NANDAL faculty of our (Department of

Business Economics-M.D.U Rohtak) For taking keen interest in the completion of my

report.

Last but not least I dedicate this effort of mine to those persons who are light of my life: My

Father, Mother, Friends who have been behind every successful endeavor in my life.

(Surender singh)

3

PREFACE

I am the sort of person who backs himself for whatever he goes. That is why whenever

someone used to mention about experienced people getting all the preference in jobs, I

used to get assertive. I always persisted that I can compete with very best in the industry

and it does not make sense to benefit someone on the basis of experience alone. But my

slumber was broken in the very first day in the market. All my theoretical knowledge and

percentage counted for nothing. By the time I finished my training I had firm belief in the

old saying "Experience is the best teacher" .These eight weeks have taught me what all

my education failed to. Now I feel more confidence about myself and have hardened to

core. This training taught me what to expect from others. How the things move in

corporate world, what the market has for you in store and much more, which can't be

expressed in words? It is a great experience and one should try to take advantage of the

opportunity given to him/her.

I thank everyone who has contributed to make this experience complete and stimulating.

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TABLE OF CONTENTS

Page No.

Declaration I

Acknowledgement II

Preface III

Executive Summary IV

Chapter 1

(a) Introduction to project

11-16

(b) Company profile

Background 18

Business Objective 19

Board of Directors 20

Profit and Loss Account 21

Balance Sheet 23

Awards Won 24

(c) HDFC Fixed Deposi ts

HDFC F ixed Depos i t s 28

Bene f i t s 29

5

Features o f F ixed Depos i t s 33

Scheme o f F ixed Depos i t s 38

In tere s t on F ixed Depos i t s 47

Compar i son o f HDFC F ixed Depos i t s Wi th

Other Banks 50

Chapter 2

(a) Research Methodology

56

(b) Research Method used 60

Chapter 3

(a) Findings 69

(b) Reccomendations 71

Annexure 74

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EXECUTIVE SUMMARY

Marke t r e sea r ch i s t he func t i on t ha t l i nks t he consumer , cu s tomer ,

and pub l i c t o t he ma rke t e r t h rough i n fo rma t ion - in fo rma t ion u sed t o

i den t i fy and de f i ne marke t i ng oppo r tun i t i e s and p rob l ems ; gene ra t e

r e f i ne , and eva lua t e ma rke t i ng ac t i ons ; mon i to r ma rke t i ng

pe r fo rmance ; and improve unde r s t and ing o f ma rke t i ng a s a p roce s s .

Speak ing i n l aymen’ s l anguage marke t i ng r e sea r ch i s t he sy s t ema t i c

and ob j ec t i ve i den t i f i c a t i on , co l l e c t i on , ana ly s i s , d i s s emina t i on and

u se o f i n fo rma t ion fo r t he pu rpose o f a s s i s t i ng managemen t i n

dec i s i on mak ing r e l a t ed t o t he i den t i f i c a t i on and so lu t i on o f

p rob l ems ( and oppo r tun i t i e s ) i n ma rke t i ng .

As marke t i ng Resea rch i s sy s t ema t i c , t hus , sy s t ema t i c p l ann ing i s

r equ i r ed a t a l l s t age s o f t he ma rke t i ng r e sea r ch p roce s s . Marke t i ng

Resea rch a t t emp t s t op p rov ide accu ra t e i n fo rma t ion t ha t r e f l e c t s a

t r ue s t a t e o f a f f a i r s . The re fo re t he mo t to o f eve ry r e sea r che r shou ld

be , ” F ind i t and t e l l i t l i ke i t i s . ”

Bas i ca l l y ma rke t i ng r e sea r ch i s o f two t ypes : -

1 . P rob l em iden t i f i c a t i on Resea rch

2 . P rob l em So lv ing Resea rch

7

PROBLEM IDENTIFICATION RESEARCH : -

I t i s t he p roce s s unde r wh ich comple t e su rvey i s be ing done abou t

t he sub j ec t i n wh ich eve ry impor t an t concep t i s be ing cove red and

p rob l ema t i c a r ea i s de t ec t ed . Su rvey can be r ega rd ing ava i l ab l e

r e sou rce s , app rop r i a t i on o f ava i l ab l e funds , compe t i t o r ’ s po l i cy , e t c .

Unde r t h i s p roce s s we can unde r go fo l l owing r e sea r ches : -

1 . Marke t Po t en t i a l Resea rch

2 . Marke t Sha re Resea rch

3 . Image Resea rch

4 . Marke t cha rac t e r i s t i c s Resea rch

5 . Sa l e s Ana lys i s Resea rch

6 . Fo reca s t i ng Resea rch

7 . Bus ine s s T rends Resea rch

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PROBLEM SOLVING RESEARCH : -

I n t h i s p roce s s a f t e r f i nd ing t he p rob l em we t ry t o f i nd ou t t he

so lu t i on and g iv ing t he r e commenda t i ons t o

the conce rned pa r t y . Af t e r t h i s p roce s s i t becomes ea sy fo r t he

i n s t i t u t i on t o g r ab t he oppo r tun i t i e s . Fo r p rob l em so lv ing we can go

fo r f o l l owing r e sea r ches : -

1 . Segmen ta t i on r e sea r ch

2 . P roduc t r e sea r ch

3 . P r i c i ng r e sea r ch

4 . P romot ion r e sea r ch

5 . D i s t r i bu t i on r e sea r ch

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NATURE OF JOB ASSIGNED

The j ob a s s igned was t o conduc t i n t e rv i ews w i th cus tomer s o f

va r i ous f i xed depos i t s t o su r f ace and de f i ne t he i r key

p r e f e r ences and p r i o r i t i e s wh i l e s e l ec t i ng depos i t o f any bank .

To s tudy t he a t t i t ude o f depos i t o r s by knowing t he i r

expec t a t i ons and v i ewpo in t abou t f i xed depos i t s .

Prepa re s t a t i s t i c a l f i nd ings and ana ly s i s and r epo r t s r e l a t ed t o

t he cus tomer ’ s cho i ce fo r f i xed depos i t s .

To p repa re and de f i ne su rvey ques t i onna i r e t o f i nd t he l eve l

and pa t t e rn o f cons ide ra t i ons o f cus tomer s wh i l e choos ing any

bank fo r d epos i t i ng t he money .

To conduc t d i s cus s ions and i n t e rv i ews t o co l l e c t max imum

poss ib l e i n fo rma t ion .

To co r r e l a t e t he da t a co l l e c t ed u s ing Kenda l l ’ s Coe f f i c i en t o f

conco rdance and mode (measu re o f c en t r a l t endency ) .

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INTRODUCTION OF THE TOPIC :-

Top ic o f t he p ro j ec t i s on Marke t r e sea r ch fo r “Comparat ive

ana lys i s o f HDFC depos i t s” The ana ly s i s o f t he p ro j ec t was ba sed

on t he In fo rma t ion f e t ched f rom va r ious depos i t o r s coming t o t he

banks . Fo r t he s t udy o f f i xed depos i t s t he p r ima ry da t a was co l l e c t ed

ba sed on a su rvey r e sea r ch , u s ing a s t r uc tu r ed ques t i onna i r e w i th

bo th open ended and c lo sed ended ques t i ons .

The s amp le s i z e was a round 20 S tuden t s f rom d i f f e r en t cu s tomer s o f

banks t he mode o f t he su rvey was o f pe r sona l i n t e rv i ew o f t he

depos i t o r s o f t he banks f i l l t he ques t i onna i r e . Seconda ry da t a was

a l so t aken f rom the va r i ous annua l r epo r t s , b rochu re s o f d i f f e r en t

banks and t he In t e rne t .

A f t e r co l l e c t i ng t he da t a p rope r ana ly s i s ha s been done by u s ing

s t a t i s t i c a l t oo l s such a s Kenda l l ’ s me thod and mode (measu re o f

c en t r a l t endency ) .

On ana ly s i s f i nd ings a r e be ing p r e sen t ed i n such a fo rm so t ha t i t

c an g ive p rope r r e su l t s e a s i l y unde r s t andab l e by l ayman .

The p ro j ec t conc ludes w i th r e su l t s and f i nd ings o f t he ana ly s i s ,

wh i ch we hope , w i l l p rov ide enough i n fo rma t ion abou t t he f a c to r s

i n f l uenc ing depos i t s coming t o any bank .

11

Regular f ixed deposits in India: Great way to earn

more interest than savings account:-           

Fixed depos i t s c an he lp you s ecu re you r ha rd ea rned money fo r l ong

du ra t i ons wh i l e g iv ing you h ighe r r i sk - f r ee r e t u rn s on you r money

t han r egu l a r s av ings accoun t . Wi th t he s t ock marke t pe r fo rming

phenomena l l y , t he popu l a r i t y o f f i xed depos i t s have dec l i ned bu t ,

t hey a r e r ega in ing g round a t a g r adua l pace .

As t he name imp l i e s a f i xed depos i t i s a f i nanc i a l i n s t rumen t

mean t f o r peop l e who wan t t o depos i t t he i r money w i th banks fo r a

f i xed du ra t i on r ang ing f rom 15 days t o 5 yea r s and above , and ea rn a

h ighe r r a t e o f i n t e r e s t on t he i r money t han conven t i ona l s av ings

accoun t . Af t e r t he ma tu r i t y o f f i xed depos i t t he i nves to r ge t s a

r e t u rn wh ich i s equa l t o t he p r i nc ipa l p lu s t he i n t e r e s t e a rned on t h i s

p r i nc ipa l ove r t he en t i r e du ra t i on o f f i xed depos i t .

F ixed depos i t s have been ve ry popu l a r among i nves to r s and keep ing

t h i s f a c t i n m ind banks i n Ind i a have a w ide va r i e t y o f f i xed depos i t

s chemes t o su i t a lmos t eve ry need .

Interest rates on regular f ixed deposits

At cu r r en t p r eva i l i ng r a t e s a r egu l a r f i xed depos i t c an ea rn you an

i n t e r e s t up t o 8 .75% and s en io r c i t i z ens who op t f o r such a f i xed

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depos i t s cheme a r e e l i g ib l e fo r an add i t i ona l 0 . 5 pe r cen t i nc r ea se ,

wh ich makes t he e f f ec t i ve i n t e r e s t r a t e 9 .25% fo r c e r t a i n f i xed

depos i t i n t e rva l s .

F ixed depos i t s t hough a r e i nves t ed fo r a c e r t a i n t ime pe r i od bu t t hey

can be a sou rce o f money and funds can be w i thd rawn pa r t l y , f r om

f i xed depos i t s i n t imes o f need . Depend ing on t he bank ' s po l i c i e s ,

t h i s w i thd rawa l may o r may no t a t t r a c t pena l t y .

Features of a regular f ixed deposit

The i n t e r e s t r a t e s on r egu l a r f i xed depos i t s a r e t ime ba sed and f i xed

depos i t f o r l onge r du ra t i on a t t r a c t be t t e r i n t e r e s t r a t e s . Fo r example

f rom HDFC Bank , a f i xed depos i t amoun t be low 15 l akhs o f 15 - 29

days w i l l e a rn 5 .50% in t e r e s t r a t e f o r gene ra l pub l i c and 6 .00% fo r

s en io r c i t i z ens . Fo r t he s ame amoun t , a f i xed depos i t o f 100 - 101

days w i l l e a rn you an i n t e r e s t r a t e o f a round 6 .75% and 7 .25% i f you

a r e a s en io r c i t i z en . S imi l a r l y , f o r an amoun t be low 15 l akhs a f i xed

depos i t be tween t he pe r i od 2 yea r s 15 days - 2 yea r s 16 days w i l l

g ive a 8 .75% in t e r e s t r a t e r e t u rn and t h i s w i l l be 9 .25% fo r s en io r

c i t i z ens .

The power of compounding on your side

The ea rn ing po t en t i a l o f f i xed depos i t i s g r ea t l y i nc r ea sed by t he

power o f compound ing . I f t he f i xed depos i t a l l ows t he po t en t i a l t o

e a rn compound i n t e r e s t by r e inves t i ng t he p r i nc ipa l amoun t a l ong

w i th t he i n t e r e s t e a rned du r ing t he pe r i od , i t c an d r ama t i c a l l y

i nc r ea se t he amoun t you w i l l ge t a t t he ma tu r i t y o f f i xed depos i t . To

13

ge t t he max imum re tu rns one shou ld compa re f i xed depos i t s chemes

f rom va r ious banks be fo re s e t t l i ng fo r one .

I f you have su rp lu s funds , i n s t e ad o f keep ing t hem in you r s av ings

accoun t and t he r eby ea rn ing a pa l t r y i n t e r e s t r a t e , you can add t hem

to you r f i xed depos i t . Th i s way t he funds w i l l e a rn a much h ighe r

r a t e o f i n t e r e s t .

How to open a fixed deposit?

The p roce s s o f open ing a f i xed depos i t i s ve ry s imp le and t h i s i s

a cce s s ib l e t o a lmos t a l l s e c t i on o f I nd i an popu l a t i on . Fo r example :

r e s i den t i nd iv idua l s , H indu und iv ided f ami l i e s , so l e p rop r i e to r sh ip

f i rms , pa r t ne r sh ip f i rms , l im i t ed compan i e s , t r u s t a ccoun t s e t c . a l l

c an open f i xed depos i t s . Banks i n Ind i a have a ce r t a i n m in imum

in i t i a l depos i t l im i t l i ke Rs . 10 ,000 t o open a f i xed depos i t and t he

va lue o f f i xed depos i t c an be i nc r ea sed i n mu l t i p l e s o f a m in imum

amoun t ( fo r example Rs . 5000 ) . These l im i t s c an va ry and a l so

depend upon ru r a l , u rban o r s emi -u rban na tu r e o f popu l a t i on . The

l im i t s a r e ve ry l ow fo r r u r a l a r ea s so t ha t even t hose w i th a l ow

incomes can open a f i xed depos i t .

Calculat ion of interest rates and tax deduct ions on

regular f ixed deposi t

How the i n t e r e s t r a t e i s c a l cu l a t ed on you r f i xed depos i t va r i e s f rom

bank t o bank . Fo r a f i xed depos i t o f s i x mon ths o r above t he banks

may ca l cu l a t e t he

i n t e r e s t on a qua r t e r l y ba s i s . I n c a se t he t enu re o f f i xed depos i t i s

l e s s t han s i x mon ths t he i n t e r e s t i s c a l cu l a t ed a t ma tu r i t y a s s imp le

14

i n t e r e s t . The compound ing f ac to r o r i n t e r e s t f o r r e - i nves tmen t i s

c a l cu l a t ed on a qua r t e r l y ba s i s .

Eve ry f i xed depos i t i s sub j ec t t o t he Ind i an i ncome t ax r egu l a t i ons

p r eva l en t f r om t ime t o t ime . Keep ing t he se r egu l a t i ons i n m ind

banks deduc t t ax a t sou rce f rom you r f i xed depos i t s and i s sue you a

TDS ce r t i f i c a t e fo r t he s ame .

Regu l a r f i xed depos i t s b r i ng i nc r ea sed r e tu rns on you r s av ings a s

compa red t o r egu l a r f i xed depos i t s . These a r e g r ea t i n s t rumen t s fo r

i nves t i ng money . The f ac t t ha t t hey can be u sed a s gua ran t ee fo r

l oans and f i nanc i a l t r ansac t i ons make t hem even more va luab l e .

Documentation

Applicants must satisfy the following documentation requirements:

Identity proof Proof of communication address Self cheque (if the applicant is not visiting the branch for account opening)

Fixed Deposit Eligibility Resident Indian.

OBJECTIVE

The ba s i c ob j ec t i ve o f my compara t i ve ana ly s i s was t o ana lyze

t he gene ra l v i ew o f pub l i c on HDFC f i xed depos i t s . The ma in a im o f

t he p ro j ec t i s t o s t udy t he cu r r en t pos i t i on o f HDFC depos i t s i n t he

ma rke t by t ak ing pub l i c v i ew wi th t he he lp o f ques t i onna i r e and t hen

a f t e rwa rds s t udy t he f e edback go t f rom the s ame .

The p ro j ec t a l so focuse s on t he peop l e i nc l i na t i on t owards a

pa r t i cu l a r c r i t e r i on a f t e r i n t e r e s t r a t e s , wh i ch t hey cons ide r wh i l e

15

choos ing any bank fo r t he i r f i xed depos i t s . My r e sea r ch a l so

b rowsed many d i f f e r en t r e a sons wh ich peop l e t ake i n to a ccoun t

when t hey depos i t t he i r money i n banks .

The r e sea r ch ’ s one o f t he a ims was t o f i nd ou t t he cu r r en t

pos i t i on o f HDFC depos i t s a s compa re t o o the r compe t i t i ve banks ,

f i nd ing ou t d i f f e r en t a r ea s o f improvemen t whe re HDFC i s l agg ing

beh ind i n t he r a ce o f depos i t s w i th o the r banks .

Company

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profile

COMPANY PROFILE

BACKGROUND

HDFC Bank was i nco rpo ra t ed i n Augus t 1994 , and , cu r r en t l y ha s an

na t i onwide ne twork o f 1412 Branches and 3275 ATM's i n

528 Ind i an t owns and c i t i e s . and with the primary objective of meeting

a social need – that of promoting home ownership by providing long-

term finance to households for their housing needs.

17

The Housing Development Finance Corporation Limited (HDFC) was amongst the first

to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a

bank in the private sector, as part of the RBI's liberalisation of the Indian Banking

Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank

Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations

as a Scheduled Commercial Bank in January 1995.

HDFC was p romoted w i th an INITIAL SHARE CAPITAL o f Rs .

100 .

BUSINESS OBJECTIVE

The ma in ob j ec t i ve s o f HDFC a re a s f o l l ows : -

To enhance r e s iden t i a l hous ing s t ock i n t he coun t ry t h rough

t he p rov i s i on o f hous ing f i nance i n a sy s t ema t i c and

p ro fe s s iona l manne r ,

To p romote home owne r sh ip , by enab l i ng a common man t o

buy a house by p rov id ing h im loans and advances .

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Anothe r ob j ec t i ve i s t o i nc r ea se t he f l ow o f r e sou rce s t o t he

hous ing s ec to r by i n t eg ra t i ng t he hous ing f i nance s ec to r w i th

t he ove ra l l domes t i c f i nanc i a l ma rke t s .

ORGANISATIONAL GOALS

HDFC’s ma in goa l s a r e a s f o l l ows : -

Deve lop c lo se r e l a t i onsh ip s w i th i nd iv idua l househo lds ,

Main t a in i t s pos i t i on a s t he p r emie r hous ing f i nance

i n s t i t u t i on i n t he coun t ry ,

T r ans fo rm idea s i n to v i ab l e and c r ea t i ve so lu t i ons ,

P rov ide cons i s t en t l y h igh r e tu rns t o sha reho lde r s , and

To g row th rough d ive r s i f i c a t i on by l eve rag ing o f f t he

ex i s t i ng c l i en t ba se .

BOARD OF DIRECTORS

HDFC i s a p ro fe s s iona l l y managed o rgan i za t i on w i th a boa rd o f

d i r e c to r s cons i s t i ng o f eminen t pe r sons who r ep re sen t va r i ous f i e l d s

i nc lud ing f i nance , t axa t i on , cons t ruc t i on and u rban po l i cy &

deve lopmen t . The boa rd p r ima r i l y focuse s on s t r a t egy fo rmu la t i on ,

po l i cy and con t ro l , de s igned t o de l i ve r i nc r ea s ing va lue t o

sha reho lde r s .

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Board o f d i rec tor s : -

Mr. Deepak S Pa r ikh …………………………Cha i rman

Mr. Keshub Mah ind ra ………………………… Vice Cha i rman

Ms. Renu S Ka rnad ………………………….. . Execu t i ve D i r ec to r

Mr. K . M. Mis t ry ……………………………….. Manag ing

D i r ec to r

Dr . S .A Dave

Mr.D .N Ghosh

Mr. S . Venk i t a r amanan

Mr. Ram S Ta rne j a

Mr. N . M Mun jee

Mr.D .M Sa twa l eka r

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 21, 2008

PARTICULARS AMOUNT (AS ON 31,

MARCH 2007)

AMOUNT (AS ON 31, MARCH

2008)

20

INCOMEOpera t ing expensesFees and other chargesOther income

EXPENDITURE AND CHARGESInteres t and o ther chargesStaf f expensesEstabl i shment expensesOther expensesDeprecia t ionProvis ion for cont ingencies

PROFIT BEFORE TAXLess : Provis ion for taxPROFIT AFTER TAX AVAILABLE FOR APPROPRIATION

3298,88,10,688101,72,31,818

9,83,59,219

2943,05,25,838125,87,73,832

8,98,53,5953410,44,01,725 3077,91,53,529

1959,42,84,905

64,89,50,91923,05,37,209

73,58,92,17318,68,79,98414,00,00,000

1873,66,31,762

58,15,85,30222,71,62,152

61,81,42,42523,58,32,88911,00,00,000

2153,65,45,190 2050,93,54,530

1256,78,56,535

220,20,00,000

1026,97,98,999

175,20,00,000

1036,58,56,535 851,77,98,999

21

APPROPRIATIONSSpecia l reserveGenera l reserveShel ter ass is tance reserveProposed div idend (a t Rs . 17 per share)Addi t ional tax on d iv idendEducat ion cess on d iv idend for 2004 paid in current per iod

265,00,00,000282,83,06,570

5,00,00,000

423,50,52,444

59,39,66,105

85,31,416

230,00,00,000242,18,97,314

4,00,00,000

33293,31,134

42,65,70,551

--1036,58,56,535 851,77,98,999

22

BALANCE SHEET as at March 31, 2008

PARTICULARS AMOUNT(As on 31,

march 2008)

Amount(As on 31,

march 2007)SOURCES OF FUNDSShare capi ta lReserve and surplus

LOAN FUNDS

APPLICATIONS OF FUNDSLoansInves tmentsDeferred taxCurrent asse ts and advancesLESS: Current l iabi l i t ies and provis ionFixed asse tsLESS: Deprec ia t ion

249,11,68,1703633,98,62,065

246,61,32,0603147,17,57,625

3883,10,30,23536647,39,55,994

3393,78,89,68528684,03,87,133

40530,49,86,229 32077,82,87,133

36011,49,66,9113130,03,63,692

69,38,29,546

2982,13,27,620

(1957,39,84,793)

567,86,33,512

(273,01,50,259)

27974,27,23,0172793,36,56,515

54,58,29,546

2396,44,44,070

(1758,47,11,167)

734,11,57,629

(296,48,22,792)

40530,49,86,229 32077,82,76,818

23

Today HDFC L td . i s a g r ea t b r and name and ha s ve ry good

r epu t a t i on among a l l t he na t i ona l i z ed banks . Th i s i s due t o t he f a c t

t ha t HDFC has won many p re s t i g ious awa rds .

AWARDS FOR HDFC LTD :-

CNN-IBN

'Indian of the Year (Business)'

Nasscom IT User Award 2008

'Best IT Adoption in the Banking Sector'

Business India 'Best Bank 2008'

Forbes Asia Fab 50 companies in Asia Pacific

Asian Banker Excellence in Retail Financial Services

Best Retail Bank 2008

Asiamoney Best local Cash Management Bank Award voted by Corporates

Microsoft & Indian Express Group

Security Strategist Award 2008

World Trade Center Award of honour

For outstanding contribution to international trade services.

Business Today-Monitor Group survey

One of India's "Most Innovative Companies"

24

Financial Express-Ernst & Young Award

Best Bank Award in the Private Sector category

Global HR Excellence Awards - Asia Pacific HRM Congress:

'Employer Brand of the Year 2007 -2008' Award - First Runner up, & many more

Business Today'Best Bank' Award

2007

Dun & Bradstreet – American Express Corporate Best Bank Award 2007

'Corporate Best Bank' Award

The Bombay Stock Exchange and Nasscom Foundation's Business for Social Responsibility Awards 2007

'Best Corporate Social Responsibility Practice' Award

Outlook Money & NDTV Profit

Best Bank Award in the Private sector category.

The Asian Banker Excellence in Retail Financial Services Awards

Best Retail Bank in India

Asian BankerOur Managing Director Aditya Puri wins the Leadership Achievement

25

Mr. Deepak Pa rekh , Cha i rman , HDFC L td . Confe r r ed w i th

t he p r e s t i g ious Padma Bhushan award . .

HDFC rece ive s awa rd fo r ‘ The Bes t P r e sen t ed Accoun t s ’ o f

t he i n s t i t u t e o f cha r t e r ed accoun t an t s o f I nd i a fo r 2004 -05

HDFC Ranked a s ‘ Ind i a ’ s Th i rd Bes t Managed Company’ by

F inance As i a – 2005

Mr . Deepak Pa rekh awarded t he 'Ha l l o f Fame ' awa rd by

Ou t l ook Money magaz ine .

HDFC rece ive s t he 'D ream Home ' awa rd fo r t he be s t Hous ing

F inance Company fo r 2004 f rom Ou t look Money magaz ine

Awards ga lo r e by HDFC a t t he 44 th ABCI Awards ! ! !

5 t h Bes t Company t o work fo r i n Ind i a , r anked by Bus ine s s

Today i n November 2004

26

HDFC fixed deposits

FIXED DEPOSITS : - F ixed depos i t i s t ha t depos i t p rov ided by

banks i n wh ich money can be depos i t ed a f t e r equa l i n t e rva l s o r a f t e r

any pe r i od o f t ime a s p rov ided unde r t he r e spec t i ve s cheme o f bank .

I n t e r e s t i s p rov ided by bank a s i n a cco rdance w i th t he i n t e r e s t r a t e s

o f t he s cheme . I n t e r e s t r a t e may va ry f rom t ime t o t ime a s we l l a s

a cco rd ing t o t he amoun t depos i t ed .

HDFC FIXED DEPOSITS : - HDFC has i n s t i t u t ed we l l -de f i ned

s e rv i ce s t anda rds fo r bo th depos i t o r s and depos i t agen t s . HDFC has

been ab l e t o mob i l i z e depos i t s f r om ove r 8 l a ck depos i t o r s .

Ou t s t and ing depos i t s g r ew f rom Rs . 1 , 458 c ro r e s i n March 1994 t o

Rs . 7 , 840 c ro r e s i n March 2005 . Much o f t h i s succe s s c an be

a t t r i bu t ed t o i t s s t r ong b r and image , supe r io r s e rv i ce s , s ecu r i t y and

above a l l , t he s i gn i f i c an t con t r i bu t i on made by HDFC ' s depos i t

agen t s . HDFC has ove r 50 ,000 depos i t agen t s and d i s t r i bu t e s a l l i t s

r e t a i l s av ings (depos i t ) p roduc t s p r ima r i l y t h rough t h i s channe l .

HDFC has been awarded “AAA” r a t i ng fo r i t s depos i t s f r om bo th

CRISIL and ICRA fo r t he ELEVENTH consecu t i ve yea r ,

r ep re sen t i ng h ighes t s a f e ty a s r ega rds t ime ly paymen t o f p r i nc ipa l

and i n t e r e s t .

27

Fixed deposi ts in India: Benef i ts , drawbacks and precaut ions:-

           

Any inves tmen t po r t fo l i o shou ld compr i s e t he r i gh t m ix o f s a f e ,

mode ra t e and r i sky i nves tmen t s . Whi l e mu tua l f unds and s t ocks a r e

t he f avo r i t e con t ende r s fo r mode ra t e and r i sky i nves tmen t s , f i xed

depos i t s , gove rnmen t bonds e t c . a r e cons ide red s a f e i nves tmen t s .

F ixed depos i t s have been pa r t i cu l a r l y popu l a r among a l a rge s ec t i on

o f i nves to r s i n Ind i a a s a s a f e i nves tmen t op t i on fo r a l ong pe r i od .

Wi th f i xed depos i t s o r FDs a s t hey a r e popu l a r l y known , a pe r son

can i nves t an amoun t fo r a f i xed du ra t i on . The banks p rov ide

i n t e r e s t r a t e s depend ing on t h i s l oan amoun t and t he t enu re o f

depos i t . He re a r e t he bene f i t s , d r awbacks o f f i xed depos i t s and

p r ecau t i ons one shou ld t ake wh i l e mak ing such i nves tmen t s .

28

Benef i ts

1. Safety

The f i xed depos i t s o f r epu t ed banks and f i nanc i a l i n s t i t u t i ons

r egu l a t ed by RBI (Rese rve Bank o f I nd i a ) t he bank ing r egu l a to r i n

Ind i a a r e ve ry s ecu re and cons ide red a s one o f t he s a f e s t i nves tmen t

me thods .

2. Regular Income

Fixed depos i t s e a rn f i xed i n t e r e s t r a t e s f o r t he i r en t i r e t enu re , wh ich

i s u sua l l y compounded qua r t e r l y . So , t hose who wan t an i ncome on a

r egu l a r ba s i s c an i nves t i n to f i xed depos i t s and u se t he i n t e r e s t r a t e

a s t he i r i ncome . Th i s makes a f i xed depos i t ve ry popu l a r way o f

i nves t i ng money fo r r e t i r e e s .

3. Saves taxWith t he d i r ec t i ve s o f t he i ncome t ax depa r tmen t s t a t i ng t ha t

i nves tmen t i n f i xed depos i t s up t o a max imum o f Rs .100 ,000 fo r 5

yea r s a r e e l i g ib l e fo r t ax deduc t i ons unde r s ec t i on 80 C o f i ncome

t ax ac t , f i xed depos i t s have aga in become popu l a r . F ixed depos i t s

s ave t ax and g ive h igh r e tu rns on i nves t ed money .

Drawbacks

29

1. Lower rate of returns

Whi l e t he money i nves t ed i n s t ock marke t s may g ive you a r e t u rn o f

20% the f i xed depos i t s w i l l y i e l d on ly abou t 10%. So , t he money

g rows s l owly i n t he c a se o f f i xed depos i t s .

2. Taxes

The i n t e r e s t e a rned on f i xed depos i t s i s f u l l y t axab l e and i s added t o

t he annua l i ncome o f t he i nd iv idua l . Ga in s f rom s tocks a r e

cons ide red cap i t a l ga in s wh i l e d iv idends a r e t ax f r e e .

3. Rising inflation can wipe out the interest

benefits

The ac tua l bene f i t s o r i ncome f rom f i xed depos i t c an be annu l l ed by

a r i s i ng i n f l a t i on . Suppose t he i n f l a t i on wh ich i s cu r r en t l y a t 3 %

r i s e s t o abou t 6%, you r f i xed depos i t a t 10% annua l r e t u rn w i l l

e f f ec t i ve ly y i e ld on ly (10%-6%) = 4% o f r e t u rn . Th i s r e t u rn wou ld

have been (10% -3%) = 7% i f t he r a t e o f i n f l a t i on had no t changed .

Th i s c an d r a s t i c a l l y e a t i n to you r f i xed depos i t i ncome .

Precaution

1. Company fixed deposits

Company f i xed depos i t s a r e no t cons ide red a s s a f e a s f i xed depos i t s

f r om l ead ing banks and f i nanc i a l i n s t i t u t i ons r egu l a t ed by t he RBI .

30

So , i f a company runs i n to l o s se s o r goes bank rup t t he money

i nves t ed i n to i t s f i xed depos i t c an be l o s t . To l u r e i nves to r s , such

compan i e s o f f e r a f i xed depos i t i n t e r e s t r a t e wh ich i s much h ighe r

t han t hose o f f e r ed by banks . Be fo re i nves t i ng i n any company f i xed

depos i t i t i s adv i s ed t o check t he c r eden t i a l s o f t he company .

2. Interest rate compounding period

The i n t e r e s t r a t e s o f f e r ed on f i xed depos i t va ry g r ea t l y w i th banks

and t enu re s . Whe the r t he i n t e r e s t r a t e i s compounded qua r t e r l y o r

mon th ly w i l l de t e rmine how much a pe r son ea rns f rom h i s f i xed

depos i t . A f i xed depos i t w i th i n t e r e s t r a t e compounded mon th ly w i l l

e a rn more t han one wh ich i s compounded qua r t e r l y . I t i s t he r e fo re

adv i s ed t o shop a round fo r t he r i gh t f i xed depos i t s cheme .

3. Premature ending of fixed deposits

Banks w i l l impose a pena l t y i f you b r eak you r f i xed depos i t be fo re

t he ma tu r i t y pe r i od . Make su re you ge t t he f a c t s r i gh t abou t t h i s

t h ing . How the bank ca l cu l a t e s t h i s pena l t y and wha t a l l cha rge s w i l l

i t l evy when you b r eak a f i xed depos i t shou ld be no t ed ca r e fu l l y .

HDFC STAFF : -

Human r e sou rce s a r e HDFC’s mos t va luab l e a s se t s . The e f f i c i ency

o f HDFC’s s t a f f i s ev iden t f rom the f a c t t ha t , t he number o f o f f i c e s

i nc r ea sed f rom 41 i n 1998 t o181 cu r r en t l y a s aga in s t t he number o f

emp loyees wh ich i nc r ea sed f rom 806 t o 1291 du r ing t he s ame

pe r i od . Th i s s t a f f s t r eng th o f 1291 i nc ludes p ro fe s s iona l s f rom the

f i e l d s o f f i nance , l aw , a ccoun t ancy , eng inee r i ng and marke t i ng .

31

SUBSIDIARY COMPANIES

HDFC Deve lope r s L imi t ed .

HDFC Inves tmen t L imi t ed .

HDFC Ho ld ings L imi t ed .

HDFC Trus t ee Company L imi t ed .

HDFC Rea l t y L imi t ed .

Home Loan s e rv i ce s Ind i a P r i va t e L imi t ed .

HDFC Ven tu re Cap i t a l L imi t ed .

HDFC Ven tu re T rus t ee Company L imi t ed .

HDFC Chubb Gene ra l I n su rance Company L imi t ed .

GRUH F inance L imi t ed .

HDFC Asse t Managemen t Company L imi t ed .

In t e l ne t g loba l Se rv i ce s P r i va t e L imi t ed .

Cred i t I n fo rma t ion Bureau ( Ind i a ) L imi t ed .

HDFC Bank L imi t ed .

32

LATEST INTEREST GRAPH

33

PROFITS OF HDFC

Pro f i t s o f HDFC fo r pa s t f ew yea r s a r e showing a r i s i ng t r end . I t ha s

showing ave rage g rowth r a t e o f 24 .28% in 2005 , 23 .33% in 2006 ,

20 .53% in 2007 , and 22 .39% in 2008 .

P ro f i t s f o r t he se yea r s c an be shown wi th t he he lp o f f o l l owing

s chedu l e :

PROFITS OF HDFC

2004

2005

2006

2007

2008

PROFIT AFTER TAX

474 580

690 852

1037

PROFIT BEFORE TAX

556 691

851 1027 1257

Af te r ana lyz ing above t ab l e we can s ay t ha t p ro f i t s o f HDFC L td a r e

i nc r ea s ing a t f l uc tua t i ng r a t e .

34

The above s chedu l e c an be exp l a ined w i th t he he lp o f f o l l owing

g r aph . The be low shown g raph r ep re sen t s t ha t HDFC p ro f i t s have

been r i s i ng con t i nuous ly a f t e r 2001 .

The above g r aph a l so shows t ha t HDFC p ro f i t s a r e r i s i ng eve ry yea r .

Fo r t he yea r s no t shown in t he g r aph g rowth r a t e i s a s f o l l ows : -

s t a r t i ng f rom 26 .67% in 1995 -96 , 18 .34% in 1996 -97 t o 22 .46% in

35

0

200

400

600

800

1000

1200

1400

2004 2005 2006 2007 2008

profit after taxprofit before tax

2000-01 .The re i s no cons i s t ency i n t he change i n p ro f i t s some t imes

i t i s i nc r ea s ing t o dec rea s ing i n f ew yea r s .

HDFC L td t oday i s compe t i ng t o l e ad ing Ind i an

banks due t o p rope r managemen t o f f unds and r e sou rce s ava i l ab l e .

A l loca t i on o f HDFC L td r e sou rce s c an be shown wi th t he he lp o f

p ro f i t and l o s s a ccoun t . A l so t he r e a r e d i f f e r en t sou rce s and

app l i c a t i ons o f f unds o f HDFC L td . The re c an be d i f f e r en t sou rce s

o f f unds l i ke sha re c ap i t a l , r e s e rve and su rp lu s , l oan funds . Wherea s

app l i c a t i ons o f f unds can be l oans g iven t o gene ra l pub l i c ,

i nve s tmen t s made , cu r r en t a s se t s , f i xed a s se t s , wh i ch p l ay ve ry

impor t an t r o l e i n deve lopmen t o f any o rgan i za t i on .

P rope r a l l oca t i on o f f unds l i ke expense s and i ncomes a long w i th

compos i t i on o f a s se t s and l i ab i l i t i e s c an be shown wi th t he he lp o f

f o l l owing p ro f i t and l o s s a ccoun t and ba l ance shee t : -

CURRENT DEPOSIT SCHEMES OF HDFC: -

The current deposit rate scheme provided by HDFC is as follows: -

36

PERIOD(Months)

Rate of interest (% p.a)Monthly Income Plan

Non – Cumulative Option

Annual Income plan

*Cumulative Option

Quarterly Half- Yearly

12 13-59 60-84

7.257.007.25

7.307.057.30

7.357.107.35

7.507.257.50

7.507.257.50

* In t e r e s t compounded annua l l y . Sen io r c i t i z ens – Add i t i ona l r a t e o f 0 .25 % p . a

Th i s above -men t ioned s cheme i s ava i l ab l e fo r a l l t he i nd iv idua l s

e i t he r t hey a r e cus tomer s o f HDFC L td o r no t . The re i s one more

s cheme , wh ich i s spec i a l l y de s igned fo r HDFC L td home loan

cus tomer s . The s cheme i s a s f o l l ows : -

The current deposi t rate scheme provided by HDFC to

home loan customers is as fo l lows : -

PERIOD(Months)

Rate of interest (% p.a)Monthly Income Plan

Non – Cumulative Option

Annual Income plan

*Cumulative Option

Quarterly Half- Yearly

37

12-5960-84

7.507.75

7.557.80

7.607.85

7.758.00

7.758.00

*In t e r e s t compounded annua l l y*0 .25% p . a add i t i ona l f o r s en io r c i t i z ens

VARIABLE RATE DEPOSIT: - I n t e r e s t r a t e on va r i ab l e depos i t i s

l i nked t o t he benchmark r a t e and w i l l va ry f rom t ime t o t ime w i th

benchmark r a t e . Benchmark r a t e i s t ha t r a t e wh ich i s app l i c ab l e on

HDFC f i xed r a t e depos i t p roduc t f o r t he co r r e spond ing pe r i od . Ra t e

o f i n t e r e s t on t he f i r s t day o f i n t e r e s t pe r i od w i l l be app l i c ab l e fo r

t he en t i r e i n t e r e s t pe r i od .

Depos i t once p l aced canno t be i n t e r changed be tween f i xed and

va r i ab l e r a t e t i l l t he da t e o f ma tu r i t y .

Benef i ts of an HDFC Individual Deposi t :

1 . H ighes t Sa fe ty

2 . Tax bene f i t

38

3 . A t t r a c t i ve Re tu rns

4 . Qu ick Loan Fac i l i t y

5 . Nomina t i on Fac i l i t y

6 . Demand Dra f t Fac i l i t y

7 . H igh Se rv i ce S t anda rds

8 . E l ec t ron i c C l ea r i ng s e rv i ce

These benef i ts can be explained as fo l lows: -

1 . H ighes t Sa fe ty : ' FAAA' and 'MAAA' r a t i ng a f f i rmed fo r t he

e l even th consecu t i ve yea r by CRISIL and ICRA re spec t i ve ly .

2 . Qu ick Loan Fac i l i t y : Loan aga in s t depos i t i s ava i l ab l e a f t e r 3

mon ths f rom the da t e o f depos i t up t o 75% o f t he depos i t amoun t

sub j ec t t o t he o the r t e rms and cond i t i ons f r amed by HDFC. In t e r e s t

on such l oans w i l l be 2% above t he depos i t r a t e

3 . Tax Bene f i t s : TDS: No t ax deduc t i on a t sou rce on i n t e r e s t f r om

depos i t s up to Rs . 5 , 000 / - pe r b r anch i n a F inanc i a l Yea r .

ANNUAL INCOME PLAN

PERIOD

(MONTHS)

RATE OF

INTEREST

MAXIMUM DEPOSIT

WITHOUT TDS (Rs )

39

(% PER

ANNUM)

INDIVIDUALS SENIOR CITIZENS

12-23

24-35

36-59

60-84

5 .75

6 .00

6 .50

6 .75

86 ,000

83 ,000

76 ,000

74 ,000

80 ,000

76 ,000

71 ,000

68 ,000

Max imum Depos i t Amoun t – Rs . 5 , 000

4 . At t rac t ive Re turns : HDFC depos i t s a r e Ava i l ab l e t h roughou t t he

yea r and o f f e r A t t r a c t i ve , A s su red r e tu rn s t o i nves to r s . I n t e r e s t r a t e s

o f f e r ed a r e h ighe r t han t ha t o f f e r ed by mos t o f t he commerc i a l

banks .

5 . Nominat ion Fac i l i t y : I nd iv idua l depos i t o r s , s i ng ly o r j o in t l y ,

c an nomina t e unde r t h i s f a c i l i t y . I n c a se t he depos i t i s p l a ced i n t he

name o f a m ino r on ly a pe r son l awfu l l y en t i t l ed t o a c t on beha l f o f

t he m ino r c an make t he nomina t i on . Power o f a t t o rney ho lde r o r any

pe r son ac t i ng i n r ep re sen t a t i ve c apac i t y a s ho lde r o f an o f f i c e o r

o the rwi se c anno t nomina t e . The nominee sha l l have t he r i gh t t o

r e ce ive t he amoun t due i n r e spec t o f depos i t on dea th o f a l l t he

depos i t o r s and paymen t by HDFC to t he nominee sha l l cons t i t u t e

f u l l d i s cha rge t o HDFC o f i t s l i ab i l i t y i n r e spec t o f t he depos i t .

6 . Demand Draf t Fac i l i t y : Ou t s t a t i on depos i t o r s c an s end demand

d ra f t s a f t e r deduc t i ng demand d ra f t cha rge s . Th i s f a c i l i t y i s no t

40

ava i l ab l e t o i nves to r s unde r Easy way Sav ings . Th i s f a c i l i t y i s

app l i c ab l e fo r p l ace s whe re HDFC does no t have an o f f i c e .

7 . H igh Serv i ce S tandards : Depos i t o r s a r e o f f e r ed ac ros s t he

coun t e r s e rv i ce s fo r new depos i t s , r enewa l s , r epaymen t s and l oan

aga in s t depos i t f a c i l i t y . Fu r the r , a l l enqu i r i e s t h rough ema i l , pos t ,

t e l ephone and i n pe r son a r e a t t ended t o immed ia t e ly .

8 . E l ec t ron ic C lear ing Serv i ce : Thi s f a c i l i t y i s p rov ided t o

depos i t o r s i n s e l ec t c en t e r s whe reby t he i n t e r e s t w i l l be c r ed i t ed

d i r ec t l y t o t he depos i t o r s ' b ank accoun t . The depos i t o r wou ld

r ece ive a c r ed i t en t ry "ECS HDFC" i n h i s pa s sbook /bank s t a t emen t .

I n t ima t i on o f i n t e r e s t c r ed i t ed wou ld be s en t on an annua l ba s i s .

Your bank w i l l no t l evy any cha rge fo r t h i s f a c i l i t y a s pe r p r e sen t

RBI gu ide l i ne s .

P re sen t l y t h i s f a c i l i t y i s be ing o f f e r ed by u s a t t he fo l l owing cen t e r s

-

ECS Cen t e r s : Ahmedabad , Banga lo re , Bhubaneshwar , Ko lka t a ,

Chand iga rh , Chenna i , Hyde rabad , J a ipu r , Kanpur , Mumba i , Nagpur ,

Nas ik , New De lh i , Pune and Vadoda ra .

Other main features attached to HDFC deposits: -

41

1 . Mode o f acceptance : -Depos i t s c an be made by

ca sh / cheques /demand d ra f t s . Cheques and d r a f t s a r e d r awn in t he

f avou r o f “HOUSING DEVELOPMENT FINANCE CORPORATION

L td” o r “HDFC L td” and shou ld be marked “Accoun t Payee On ly” .

2 . Renewa l s and Repayment : - Fo r r enewa l s o r r epaymen t o f

depos i t , t he du ly d i s cha rged depos i t r e ce ip t mus t be su r r ende red t o

HDFC a t l e a s t a week be fo re t he da t e o f ma tu r i t y . A c ro s sed

“Accoun t Payee” cheque f avo r ing t he f i r s t named depos i t o r w i l l

make r epaymen t o f depos i t amoun t .

3 . Agent s : - HDFC inv i t e s depos i t s t h rough t he channe l o f

au tho r i zed agen t s . HDFC has agent ne twork o f over 50 ,000 and a

depos i tor base o f around 1 mi l l i on .

4 . Premature Wi thdrawal s : - p r ema tu re w i thd rawa l s w i l l no t be

a l l owed be fo re comple t i on o f 3 mon ths f rom the da t e o f depos i t . I n

c a se o f r eques t f o r p r ema tu re w i thd rawa l a f t e r t he exp i ry o f t h r ee

mon ths , t he r a t e s g iven i n t he fo l l owing t ab l e sha l l app ly : -

TABLE FOR PREMATURE WITHDRAWALS: -

42

Months comple ted f rom the da te of deposi t

Rate of in teres t payable

3 less than 6 No in teres t

6 less than 12 3 .50% p.a

12 less than matur i ty

Fixed ra te deposi t :2% less than the ra te appl icable for the comple ted per iod.

Var iable ra te deposi t :2% less than the ra te appl icable for the comple ted per iod under var iable ra te deposi t product on the respect ive in teres t rese t da tes .

POSITION OF HDFC DEPOSITS: -

43

HDFC has a depos i t o r ba se o f 1 m i l l i on . Pub l i c depos i t s cons t i t u t e

app rox ima te ly 80% o f t he t o t a l depos i t s o f t he co rpo ra t i on . Depos i t s

o f HDFC fo r pa s t f ew yea r s a r e a s f o l l ows : -

Fixed depos i t s c an be shown wi th t he he lp o f f o l l owing d i ag ram.

The g r aph shows t ha t HDFC depos i t s a r e i nc r ea s ing up to 2003 -04

and showed a dec l i ne i n 2007 -08 .

INTEREST RATE ON FIXED DEPOSITS OF HDFC BANK

YEARS DEPOSITS

1995 -96

1996 -97

1997 -98

1998 -99

1999 -00

2000 -01

2001 -03

2002 -05

2003 -07

2004 -08

2512 .69

3502 .19

4423 .79

5252 .40

6223 .85

7249 .83

8491 .02

9121 .55

9337 .65

7840 .09

44

When you open a F ixed deposi t wi th HDFC Bank Your

interest is ca lcu lated on a quarter ly bas is for deposi ts of

6 months and above For those deposi ts wi th a tenure of

below 6 months, your interest is ca lcu lated at matur i ty

as S imple Interest . The per iod of F ixed Deposi t is

ca lcu lated in number of days.

Interest for re- investment is ca lcu lated every quarter ,

and the Pr inc ipal is increased to inc lude interest earned

dur ing the previous quarter .

Tax at source is deducted as per the Income Tax

regulat ions prevalent f rom t ime to t ime.

DOMESTIC TERM DEPOSITS

Pe r iod Amoun t

In t e r e s t Ra t e (pe r

annum)

**Sen io r C i t i z en

Ra t e s (pe r annum)

Ef fec t i ve F rom

7 - 14 daysBe low Rs .15 Lacs

3 .00% 3 .50%Augus t 6 ,

2007

45

15 - 29 daysBe low Rs .15 Lacs

5 .50% 6 .00%Augus t 6 ,

2007

30 - 45 daysBe low Rs .15 Lacs

6 .00% 6 .50%Ju ly 3 ,

2008

46 - 60 daysBe low Rs .15 Lacs

6 .00% 6 .50%Ju ly 3 ,

2008

61 - 90 daysBe low Rs .15 Lacs

6 .25% 6 .75%Ju ly 3 ,

2008

91 - 99 daysBe low Rs .15 Lacs

7 .00% 7 .50%Ju ly 3 ,

2008

100 - 101 days

Be low Rs .15 Lacs

7 .75% 8 .25%Ju ly 3 ,

2008

102 - 180 days

Be low Rs .15 Lacs

7 .00% 7 .50%Ju ly 3 ,

2008

6 mon ths 1 day - 6

mon ths 14 days

Be low Rs .15 Lacs

8 .00% 8 .50%Ju ly 3 ,

2008

6 mon ths 15 days - 6

mon ths 16 days

Be low Rs .15 Lacs

8 .25% 8 .75%Ju ly 3 ,

2008

6 mon ths 17 days - 9

mon ths 14 days

Be low Rs .15 Lacs

8 .00% 8 .50%Ju ly 3 ,

2008

9 mon ths 15 days - 9

mon ths 16 days

Be low Rs .15 Lacs

9 .00% 9 .50%Ju ly 3 ,

2008

46

9 mon ths 17 days - 1

yea r

Be low Rs .15 Lacs

8 .75% 9 .25%Ju ly 3 ,

2008

1 yea r 1 day - 1 yea r 14

days

Be low Rs .15 Lacs

9 .00% 9 .50%Augus t 8 ,

2008

1 yea r 15 days - 1 yea r 16

days

Be low Rs .15 Lacs

10 .00% 10 .50%Augus t 8 ,

2008

1 yea r 17 days - 2

yea r s

Be low Rs .15 Lacs

9 .00% 9 .50%Augus t 8 ,

2008

2 yea r s 1 day - 2

yea r s 14 days

Be low Rs .15 Lacs

9 .50% 10 .00%Augus t 8 ,

2008

2 yea r s 15 days - 2 yea r s 16

days

Be low Rs .15 Lacs

10 .00% 10 .50%Augus t 8 ,

2008

2 yea r s 17 days - 3

yea r s

Be low Rs .15 Lacs

9 .50% 10 .00%Augus t 8 ,

2008

3 yea r s 1 day - 5 yea r s

Be low Rs .15 Lacs

9 .50% 10 .00%Augus t 8 ,

2008

5 yea r s 1 day - 8 yea r s

Be low Rs .15 Lacs

9 .50% 10 .00%Augus t 8 ,

2008

In t e r e s t r a t e s a r e sub j ec t t o change f rom t ime t o t ime .

App l i c ab l e i n t e r e s t r a t e s w i l l be g iven a s on t he da t e o f r e ce ip t

o f t he funds by t he bank . When book ing FD th rough

Ne tBank ing p l ea se no t e t he a c tua l i n t e r e s t r a t e be ing app l i ed

47

on t he "Conf i rm" s c r een . Th i s s c r een appea r s be fo re you

con f i rm you r r eques t f o r open ing a new FD.

Only Sen io r C i t i z ens / Re t i r ed Pe r sonne l ( 60 yea r s and above )

who a r e Res iden t I nd i ans a r e e l i g ib l e . The spec i a l r a t e s a r e

app l i c ab l e on ly fo r INR depos i t s .

The FD r a t e app l i c ab l e fo r a mon th ly i n t e r e s t op t i on w i l l be a

d i s coun t ed r a t e ove r t he s t anda rd FD Ra t e . P l ea se con t ac t t he

nea re s t B ranch fo r f u r t he r i n fo rma t ion .

For i n t e r e s t r a t e s on F ixed Depos i t s f o r Rs . 15 Lacs and above ,

p l ea se con t ac t you r nea re s t HDFC Bank b ranch .

Ef fec t i ve 01s t Dec ' 06 , t he i n t e r e s t r a t e app l i c ab l e fo r

p r ema tu re c l o su re o f depos i t s w i l l be l ower o f :

t he o r i g ina l r a t e a t wh i ch t he depos i t ha s been booked OR

t he ba se r a t e app l i c ab l e fo r t he t enu re fo r wh ich t he depos i t

ha s been i n fo r ce w i th t he Bank .

The ba se r a t e i s t he r a t e app l i c ab l e t o depos i t s o f l e s s t han

Rs .15 l a c s .

48

The F ixed Depos i t Adv i ce w i l l be d i spa t ched t o you r r e co rded

ma i l i ng add re s s w i th in 3 -4 work ing days o f a ccoun t open ing .

COMPARISON OF INTEREST RATES OF FIXED DEPOSITS OF DIFFERENT NATIONALISED BANKS

49

In t e r e s t r a t e s f o r f i xed depos i t s f o r d i f f e r en t na t i ona l i z ed banks w i th

r e spec t t o d i f f e r en t t ime pe r i od can be shown wi th t he he lp o f

f o l l owing g r aphs : -

I n t e r e s t r a t e s a r e fo r f o l l owing banks : -

( 1 ) . HDFC

(2 ) . S t a t e Bank o f I nd i a

(3 ) . Pun j ab and S indh Bank

(4 ) . Cen tu r i an Bank o f Pun j ab

(5 ) . I ndus Ind Bank

(6 ) . Bank o f Ba roda

(7 ) . IC ICI Bank

(8 ) . IDBI Bank

(9 ) . UTI Bank

(10 ) . S t anda rd cha r t e r ed

(11 ) . HSBC Bank

(12 ) . ING Vyasya

(13 ) . Un ion Bank o f I nd i a

(14 ) . S t a t e Bank o f Pa t i a l a

Table based on 16march 2009 data

INTEREST RATES ON FIXED DEPOSITS

50

In t he above t ab l e we can s ee t ha t HDFC L td p rov ide s i n t e r e s t r a t e s

f o r t he t ime pe r i od o f 1 -2 yea r s t ha t i s 8 . 00%.

In t he above t ab l e we can s ee t ha t Pub l i c s ec to r banks p rov ide

i n t e r e s t r a t e s f o r t he t ime pe r i od o f 2 -3 yea r s t ha t i s 8 . 00%

In t he above t ab l e we can s ee t ha t Pub l i c s ec to r banks p rov ide

max imum in t e r e s t r a t e s f o r t he t ime pe r i od o f 5yea r s above t ha t i s

8 . 00 %.

Below ONE Year

Foreign Banks

BANK NAME / DURATION

15-29

days

30-45

days

46-60

days

61-90

days

91-120 days

120-179 days

180-270 days

271-364 days

ABN-Amro Bank 4.00 4.50 4.50 4.50 6.50 6.50 6.50 6.50

Barclays 3.75 4.00 4.25 5.00 5.50 5.50 5.75 6.00

Citi Bank 3.50 4.50 5.00 5.50 7.00 7.00 8.00 8.00

DBS Bank 4.00 5.50 5.50 5.75 6.00 6.00 7.25 7.25

Standard Charted Bank 4.00 4.50 4.50 5.75 6.50 6.50 6.75 6.75

The Bank of Nova Scotia 4.75 5.75 5.75 5.75 6.75 6.75 6.75 6.75

The HongKong & Shanghai 3.50 4.25 5.25 5.25 5.25 5.25 5.50 8.00

Indian Banks - Public Sector

BANK NAME / DURATION15-29

days

30-45

days

46-60

days

61-90

days

91-120 days

120-179 days

180-270 days

271-364 days

Allahabad Bank 4.25 4.25 5.50 5.50 6.75 6.75 7.75 8.25

Andhra Bank 4.50 4.50 5.25 5.25 6.75 6.75 7.00 7.00

Bank of Baroda 4.75 4.75 5.25 5.25 6.75 6.75 8.00 8.00

Bank of India 4.25 4.50 6.00 6.00 6.25 6.25 7.25 7.50

Bank of Maharashtra 4.50 4.75 5.50 5.50 7.25 7.25 7.75 8.25

Canara Bank 4.00 4.00 5.50 5.50 6.25 6.25 7.00 7.25

51

Central Bank of India 4.75 4.75 7.00 7.00 7.50 7.50 7.75 7.75

Corporation Bank 4.00 5.00 5.00 5.50 6.75 6.75 7.25 8.00

Dena Bank 4.25 4.75 5.25 5.25 6.75 7.00 7.50 8.00

IDBI Bank 5.00 5.00 5.50 5.50 6.75 6.75 8.00 8.00

Indian Bank 3.75 4.00 5.00 5.00 6.00 6.00 7.25 7.50

Indian Overseas Bank 4.25 4.75 5.00 5.00 6.00 6.50 7.50 7.75

Oriental Bank of Commerce 4.25 4.75 6.00 6.00 7.00 7.75 7.75 8.00

Punjab & Sind Bank 4.00 4.00 5.50 5.50 7.50 7.50 7.50 7.50

Punjab National Bank 4.00 4.00 5.00 5.00 5.50 5.50 7.00 7.00

State Bank of Bikaner & Jaipur

4.50 4.50 5.50 5.50 6.75 6.75 7.50 7.50

State Bank of Hyderabad 4.50 4.50 5.25 5.25 6.50 6.50 7.25 7.25

State Bank of India 4.25 4.25 5.25 5.25 6.50 6.50 7.25 7.25

State Bank of Mysore 4.50 4.50 5.25 5.25 7.00 7.00 7.75 7.75

State Bank of Patiala 4.25 4.25 6.00 6.00 7.00 7.00 8.00 8.00

State Bank of Travancore 4.25 4.25 5.25 5.25 6.75 6.75 7.50 7.50

Syndicate Bank 3.75 4.25 5.00 5.25 6.00 6.50 7.25 7.50

UCO Bank 4.00 5.00 5.50 6.00 6.75 6.75 8.00 8.00

Union Bank of India 3.75 4.00 5.00 5.00 6.00 6.00 7.25 7.50

United Bank of India 4.00 4.50 5.00 5.50 6.50 6.50 7.50 7.50

Vijaya Bank 4.00 4.50 5.50 5.50 6.75 6.75 7.25 7.50

Indian Banks - Private Sector

BANK NAME / DURATION

15-29

days

30-45

days

46-60

days

61-90

days

91-120 days

120-179 days

180-270 days

271-364 days

Axis Bank 3.00 4.00 5.00 5.00 6.50 6.50 7.00 8.00

City Union Bank 5.50 5.50 6.00 6.00 7.25 7.25 8.75 8.75

Development Credit Bank 6.00 6.00 7.00 7.00 8.00 8.00 9.00 9.00

HDFC Bank 3.50 4.00 4.50 5.00 5.50 5.50 7.00 8.75

ICICI Bank 3.75 4.00 4.00 4.00 6.25 6.25 7.25 8.00

IndusInd Bank 4.25 5.00 5.00 5.25 7.00 7.00 7.25 7.75

ING Vysya Bank 5.00 5.50 5.50 7.00 8.00 8.00 8.00 8.00

Karnataka Bank 4.50 4.50 5.50 5.50 7.50 7.50 8.50 8.50

Kotak Bank 3.50 4.00 5.00 5.00 6.00 6.00 7.00 7.50

52

Tamilnadu Mercantile Bank 5.50 5.50 7.00 7.00 7.50 7.50 8.75 8.75

The Bank of Rajasthan Ltd 4.25 4.25 4.50 4.50 7.25 8.00 8.75

The Catholic Syrian Bank 4.75 5.75 5.50 5.50 7.25 7.25 8.50 8.50

The Dhanalakshmi Bank 4.75 4.75 5.50 5.50 7.00 7.00 8.00 8.00

The Federal Bank 4.50 4.50 5.50 5.50 7.00 7.00 8.00 8.00

The J & K Bank 4.00 6.00 6.00 6.00 7.50 7.50 7.50 7.75

The Karur Vysya Bank 4.50 5.00 5.00 5.00 6.00 6.00 7.50 7.50

The Lakshmi Vilas Bank 5.00 5.50 6.00 6.00 7.00 7.00 8.25 8.50

The South Indian Bank 4.50 4.50 5.50 5.50 7.00 7.00 8.00 8.00

TNSC Bank 4.00 4.50 5.00 5.00 6.00 6.00 7.50 7.50

1year-5 yearForeign Banks

BANK NAME / DURATION

1 year < 2 years

2 years < 3 years

3 years < 5 years

ABN-Amro Bank 8.00 8.00 8.00

Barclays 6.25 6.50 6.50

CitiBank 8.00 8.00 8.00

DBS Bank 9.00 7.50 8.25

Standard Charted Bank 7.00 7.00 7.25

The Bank of Nova Scotia 6.75 6.75 6.75

The HongKong & Shanghai 8.00 7.50 7.50

Indian Banks - Public Sector

BANK NAME / DURATION1 year < 2

years2 years < 3

years3 years < 5

years

Allahabad Bank 8.50 8.75 8.75

Andhra Bank 8.00 8.00 8.00

Bank of Baroda 8.50 8.75 8.50

Bank of India 8.00 8.25 8.25

Bank of Maharashtra 8.75 8.75 8.50

Canara Bank 8.25 8.25 8.25

53

Central Bank of India 8.50 8.50 8.50

Corporation Bank 8.25 8.25 8.25

Dena Bank 8.75 8.75 8.50

IDBI Bank 8.50 8.50 8.25

Indian Bank 8.00 8.00 8.00

Indian Overseas Bank 8.00 8.50 8.00

Oriental Bank of Commerce 8.25 8.50 8.50

Punjab & Sind Bank 8.50 8.00 8.00

Punjab National Bank 8.00 8.00 8.00

State Bank of Bikaner & Jaipur 9.00 9.25 8.50

State Bank of Hyderabad 8.25 8.25 8.50

State Bank of India 8.10 8.25 8.50

State Bank of Mysore 8.50 9.00 8.50

State Bank of Patiala 8.50 8.75 8.50

State Bank of Travancore 8.50 8.75 8.50

Syndicate Bank 8.00 8.00 8.00

UCO Bank 8.50 8.50 8.25

Union Bank of India 8.00 8.00 8.00

United Bank of India 8.50 8.50 8.25

Vijaya Bank 8.00 8.00 8.00

Indian Banks - Private SectorBANK NAME /

DURATION1 year < 2

years2 years < 3

years3 years < 5

years

Axis Bank 8.55 8.25 8.00

City Union Bank 10.00 10.25 9.50

Development Credit Bank 10.25 10.25 9.00

HDFC Bank 8.00 8.00 8.00

ICICI Bank 8.25 8.25 8.25

IndusInd Bank 8.00 8.25 8.25

ING Vysya Bank 9.00 8.50 8.50

54

Karnataka Bank 9.00 9.00 9.50

Kotak Bank 8.00 8.00 8.00

Tamilnad Mercantile Bank 10.00 10.00 9.75

The Bank of Rajasthan Ltd 9.50 9.00 8.75

The Catholic Syrian Bank 9.50 9.50 9.25

The Dhanalakshmi Bank 9.00 9.00 8.50

The Federal Bank 9.00 9.00 8.75

The J & K Bank 8.75 8.75 8.25

The Karur Vysya Bank 9.50 9.50 8.00

The Lakshmi Vilas Bank 9.75 10.00 9.50

The South Indian Bank 9.00 9.00 8.75

TNSC Bank 8.00 7.75 7.50

This data is based on March, 2009

55

RESEARCH

METHODOLOGY

RESEARCH METHODOLOGY

STATEMENT OF THE PROBLEM AND ITS SIGNIFICANCE

The s t udy i s on a spec i a l synops i s on f i xed depos i t s . I t cove r s

a spec t s l i ke i n t e r e s t r a t e s , s a f e ty o f f unds , s e rv i ce s p rov ided e t c .

The s t udy i s a mode t o unde r s t and t he impor t ance o f b r and name o f

t he i n s t i t u t e , f i nanc i a l a spec t s wh i l e choos ing a f i xed depos i t .

56

The p r e sen t s t udy i s bo th qua l i t a t i ve and quan t i t a t i ve i n na tu r e a s i t

s e eks t o f i nd ou t t he a e s the t i c a l a s we l l a s f i nanc i a l cons ide ra t i ons

t aken by cus tomer s wh i l e s e l ec t i ng a f i xed depos i t . Resea rch s imp ly

means a s ea r ch fo r f a c t s – answer s t o ques t i ons and so lu t i ons t o

p rob l ems . I t i s a pu rpos ive i nves t i ga t i on . I t i s an o rgan i zed enqu i ry .

In o the r words r e sea r ch means s ea r ch fo r knowledge and r e sea r ch

me thodo logy i s a sy s t ema t i c way t o so lve t he r e sea r ch p rob l em. I t i s

a s c i ence o f s t udy how the s ea r ch i s a c tua l l y done . I t p r e sen t s t he

sou rce o f da t a co l l e c t i on , t he s amp l ing p rocedu re s and t oo l s o f

i nves t i ga t i on and l im i t a t i ons o f t he s t udy . Our r e sea r ch p ro j ec t ha s a

spec i f i ed f r amework fo r co l l e c t i ng t he da t a i n an e f f ec t i ve manne r .

Such f r amework i s c a l l ed “ r e sea r ch de s ign” .

The r e sea r ch me thodo logy , wh ich was fo l l owed by u s , cons i s t s o f

t he fo l l owing s t eps : -

(1 ) . DEFINING THE RESEARCH PROBLEM AND RESEARCH

OBJECTIVES: -

The de f i n i t i on o f t he p rob l em inc ludes t he s t udy o f f i xed depos i t s o f

va r i ous banks , d i f f e r en t po l i c i e s o f compe t i t o r banks and f i nd ing ou t

t he un ique f ea tu r e s o f va r i ous banks a long w i th t he cus tomer ’ s

p r e f e r ence t owards a spec i f i c bank ’ s f i xed depos i t .

57

(2 ) . DEVELOPING THE RESEARCH PLAN: -

The deve lopmen t o f r e sea r ch p l an ha s t he fo l l owing s t eps : -

DATA SOURCE: The sou rce o f t he da t a was p r ima ry da t a on ly .

P r ima ry Da t a de f i ned a s t he da t a , wh i ch i s co l l e c t ed fo r t he

f i r s t t ime . I t i s new in na tu r e . H i s t ype o f da t a i s co l l e c t ed

d i r ec t l y f rom the sou rce o f i n fo rma t ion . The t e chn iques , wh ich

we re i nvo lved i n co l l e c t i ng t he p r ima ry da t a , a r e pe r sona l

i n t e rv i ew , ques t i onna i r e e t c .

RESEARCH APPROACH: Su rveys a r e be s t su i t ed fo r

de sc r i p t i ve r e sea r ch . Su rveys a r e unde r t aken t o l e a rn abou t

peop l e ’ s knowledge , be l i e f s , p r e f e r ences , s a t i s f ac t i on and so

on and t o measu re t he se magn i t udes i n t he gene ra l pub l i c .

The re fo re I have done t h i s su rvey fo r t he de sc r i p t i ve r e sea r ch

p roce s s .

RESEARCH INSTRUMENT: Ques t i onna i r e was conduc t ed fo r

su rvey had bo th c lo sed -ended and open -ended . A ques t i onna i r e

cons ide red a s e t o f ques t i on was p r e sen t ed t o cus tomer s .

SAMPLING PLAN: The s amp l ing p l an ca l l s f o r t h r ee dec i s i ve

SAMPLING UNIT: Sampl ing un i t i s who i s t o be su rveyed?

The t a rge t popu l a t i on mus t be de f i ned t ha t ’ s t o be s amp led i t

i s nece s sa ry so a s o deve lop s amp l ing f r ames so t ha t eve ryone

i n t he t a rge t popu l a t i on ha s an equa l chance o f be ing s amp led .

My samp le un i t was va r i ous Branches o f d i f f e r en t banks and

t he accoun t ho lde r s i n Chand iga rh and Panchku l a .

58

SAMPLE SIZE: Sample s i z e i s how many peop l e have t o be

su rveyed?

SAMPLING METHOD: -

He re me thod u sed fo r s amp l ing i s conven i ence s amp l ing .

Genera l ly , la rge samples g ive more resul t s than the

smal ler samples . The sample refers to the number of

respondents f rom the universe . My sample s ize was to ta l 22

Bank branches of var ious areas in Chandigarh and Panchkula

CONTACT METHOD: once t he s amp l ing p l an ha s de t e rmined ,

t he ques t i on was how the sub j ec t shou ld be con t ac t ed , i . e . by

t e l ephone , ma i l o r pe r sona l i n t e rv i ews . Bu t t he s i ng l e way t o con t ac t

t he sub j ec t was pe r sona l i n t e rv i ews .

REASEARCH METHODS USED:-

The me thod u sed fo r de r i v ing some impor t an t conc lu s ions ou t o f

su rvey conduc t ed and ques t i ons be ing a sked by gene ra l pub l i c t he

fo l l owing me thods a r e be ing u sed : -

(1 ) . Kenda l l ’ s method

59

(2 ) . Mode

(1) . KENDALL’S METHOD

Kenda l l ’ s coe f f i c i en t o f conco rdance , r ep re sen t ed by t he symbo l

“W” , i s an impor t an t non -pa rame t r i c measu re o f r e l a t i onsh ip . I t i s

u sed fo r de t e rmin ing t he deg ree o f a s soc i a t i on among seve ra l ( k )

s e t s o f r ank ing o f N ob j ec t s o r i nd iv idua l s . Kenda l l ’ s coe f f i c i en t o f

conco rdance (W) i s cons ide red an app rop r i a t e measu re o f s t udy ing

t he deg ree o f a s soc i a t i on among t h r ee o r more s e t s o f r ank ings .

The ba s i s o f Kenda l l ’ s coe f f i c i en t o f conco rdance i s t o imag ine how

the g iven da t a wou ld l ook i f t he r e we re no ag reemen t among seve ra l

s e t o f r ank ings , and t hen t o imag ine how i t wou ld l ook i f t he r e we re

pe r f ec t ag reemen t among seve ra l s e t s .

Th i s me thod i s be ing u sed fo r f i nd ing t he c r i t e r i a r anked h ighes t by

t he max imum depos i t o r s wh i l e s e l ec t i ng a s g iven t o t hem by HDFC

a s compa re t o o the r banks . Under th i s method on ly those po ten t ia l

depos i tor s are cons idered who know about HDFC depos i t s .

By us ing kande l l ’ s me thod ca l cu l a t i ons a r e be ing done a s fo l l ows : -

ASSUMPTION : -

60

Be fo re showing ca l cu l a t i ons he r e i t i s be ing obse rved t ha t a l t hough

peop l e cons ide r s a f e ty o f t he i r f unds t he mos t impor t an t c r i t e r i a f o r

s e l e c t i ng any depos i t bu t s t i l l t hey wan t h igh i n t e r e s t r a t e s t he r e fo re

i n ou r ques t i on mos t o f peop l e ma rked i n t e r e s t r a t e s a s t he mos t

s e l e c t ed c r i t e r i a . The re fo re wh i l e f i nd ing t he cho i ce t o wh ich

max imum peop l e g ive impor t ance we have e l im ina t ed ou r op t i on o f

i n t e r e s t r a t e a s t o g ive unb i a sed r e su l t s .

PROCEDURE: -

The p rocedu re fo r compu t ing and i n t e rp r e t i ng Kenda l l ’ s coe f f i c i en t

o f conco rdance (W) i s a s f o l l ows .

(A) Al l t he ob j ec t s a r e r anked by a l l ( k ) d i f f e r en t r e sponden t s and

pu t i n t he fo rm o f k by N ma t r i x

(B) The sum o f r anks (R j ) f o r e ach ob j ec t a s s i gned by a l l j udges

i s de t e rmined .

(C) . R j ’ i s de t e rmined and t hen va lue o f “ s ” i s de t e rmined by t he

fo rmu la

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S = E (R j – R j ’ ) ^ 2

(D) . Kenda l l ’ s coe f f i c i en t o f conco rdance i s worked ou t by t he

fo rmu la

SW = - - - - - - - - - - - - - - - - - - - - - - - - - -

1 /12 x k^2 (N^3 – N)

Where , k = No. Of respondents N = No. Of objec ts ranked

(E). Significant value of W may be interpreted and understood as if the respondents

are applying essentially the same standards in ranking n objects under consideration.

Kendall therefore suggested that the best estimate of the ‘TRUE’ ranking is provided

by the order of sum of the ranks. The best estimate is related to the lowest value

observed amongst Rj.

METHOD : -

Le t s a f e ty o f f unds be x1 , l i qu id i t y be x2 , s e rv i ce s be x3 , add i t i ona l

bene f i t s be x4 , ma rke t r epu t a t i on be x5 .

Now on t he ba s i s o f c a l cu l a t i ons made i n t he

t ab l e we w i l l c a l cu l a t e a s f o l l ows : -

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HYPOTHESIS ASSUMED : -

Fo r r anks g iven by pub l i c l e t u s t ake a Nu l l hypo the s i s t ha t t he r e

i s no s i gn i f i c ance d i f f e r ence be tween t he s amp le s i z e o f 20

peop l e and t he i r cons ide ra t i ons o f s a f e ty o f f unds wh i l e s e l ec t i ng

a f i xed depos i t . (Ho) .

By pu t t i ng t he va lue s i n t he fo rmu la : -

1214 .8

W = - - - - - - - - - - - - - - - - - - - - - - - - - -

1 /12 x 20^2 (5^3 – 5 )

W = 0 .3037

To j udge t he s i gn i f i c ance o f t h i s W, we l ook i n to t ab l e fo r c r i t i c a l

va lue s o f S i n t he KANDELL’S Coe f f i c i en t o f Conco rdance fo r

f i nd ing va lue o f s a t 5% l eve l f o r k = 20 and N = 5 . Th i s va lue i s

468 .5 and ou r c a l cu l a t ed va lue i s 1214 .8 much h ighe r t hen t he

t abu l a r va lue t he r e fo re we r e j e c t t he nu l l hypo the s i s and i n f e r t ha t

t he peop l e a r e app ly ing e s sen t i a l l y t he s ame s t anda rd i n r ank ing t he

N ob j ec t s i . e . , t he r e i s s i gn i f i c an t ag reemen t i n r ank ing by peop l e a t

5 % l eve l .

The l owes t va lue obse rved amongs t R j i s 41 and a s be s t e s t ima t e o f

t r ue r ank ings i n t he c a se o f c r i t e r i a x1 , a l l peop l e on t he who le

p l aced t h i s c r i t e r i on on t he f i r s t mos t impor t an t c r i t e r i a .

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The re fo re we can s ay t ha t peop l e cons ide r SAFETY OF FUNDS a s

t he mos t impor t an t c r i t e r i a f o r go ing fo r any f i xed depos i t .

(2) . MODE

Mode i s t he mos t common ly o r f r equen t l y occu r r i ng va lue i n a

s e r i e s . The mode i n a d i s t r i bu t i on i s t ha t a round wh ich t he r e i s

max imum concen t r a t i on . I n gene ra l , mode i s t he s i z e o f i t em ,

wh ich ha s max imum f r equency , bu t a t i t ems such an i t em may no t

be mode on accoun t o f t he e f f ec t o f t he f r equenc i e s o f t he

ne ighbo r ing i t ems . L ike med i an , mode i s a pos i t i ona l ave rage and

i s no t a f f ec t ed by t he va lue s o f ex t r eme i t ems . I t i s t he r e fo re ,

u se fu l i n a l l s i t ua t i ons whe re we wan t t o e l im ina t e t he e f f ec t o f

ex t r eme va r i a t i ons . Mode i s pa r t i cu l a r l y u se fu l i n t he s t udy o f

popu l a r s i z e s .

Mode r ep re sen t s t he va r i ab l e hav ing h ighes t

f r equency .

PROCEDURE

Find ing ou t t he f r equency fo r eve ry c r i t e r i on f i r s t l y by a s s ign ing t he

t a l l y ma rk t hen by coun t i ng t he t a l l y ma rk and t hen f i nd ing t he

moda l va lue by cons ide r i ng t he h ighes t f r equency .

We a r e g iv ing d i f f e r en t t ime pe r i ods d i f f e r en t va r i ab l e s .

Le t < 1 yea r be x1

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1-2 yea r s be x2

2 -5 yea r s be x3

And 5 yea r s above be x4

Now when 30 peop l e we re a sked abou t t he t ime pe r i od t hey w i l l

p r e f e r t o depos i t t he i r money t hen we obse rve fo l l owing

obse rva t i ons : -

CRETERIA FREQUENCY

X1 5

X2 16

X3 6

X4 3

Now wi th t he he lp o f f o l l owing t ab l e we can f i nd t ha t gene ra l l y

peop l e p r e f e r 1 -2 yea r s f o r depos i t i ng t he i r money .

The above u sed me thod can a l so be shown wi th t he he lp o f f o l l owing g r aph a s we l l .

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0

2

4

6

8

10

12

14

16

X1 X2 X3 X4

East

Where X1 r ep re sen t s <1 yea r f o r depos i t i ng t he money .

X2 r ep re sen t s 1 -2 yea r s .

X3 r ep re sen t s 2 -5 yea r s .

X4 r ep re sen t s more t han 5 yea r s .

FOR REFERENCE: -

JUDGES X1 X2 X3 X4 X5

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1 1 2 5 3 42 1 3 1 2 43 2 1 4 3 54 2 1 4 3 55 3 2 3 4 16 1 4 5 3 27 2 1 4 3 58 1 3 5 2 49 2 2 3 4 5

10 3 1 5 4 211 1 2 5 3 412 1 2 4 3 513 2 3 1 4 514 2 3 1 4 515 3 1 5 4 216 2 1 3 4 517 3 5 1 4 218 1 4 2 3 519 3 4 1 5 220 1 5 3 2 4

Sum o f ranks (R j )

41 50 65 67 76

(R j – R j )-18 .8 -9 .8 5 .2 7 .2

26 .2 (R j – R j )^2

353 .44

96 .04 27 .04 51 .84 686 .44

TABLE FOR KANDELL’S METHOD

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In t he above t ab l e we have a s s igned po in t s t o ou r r anks , wh ich a r e

be ing a l l o t t ed t o t he op t i ons by t he peop l e be ing ques t i oned . I n

o rde r t o c a l cu l a t e t he va lue s ou t o f co l l e c t ed da t a we have t o sum

to t a l ou r r ank po in t s t he r e fo re we have g iven r anks a s f o l l ows : -

Po in t 1 t o 5 t h r ank .

Po in t s 2 t o 4 t h r ank .

Po in t s 3 t o 3 r d r ank .

Po in t s 4 t o 2 n d r ank .

Po in t s 5 t o 1 s t r ank .

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FINDINGSAND

RECOMENDATIONS

FINDINGS AND RECOMENDATIONS

FINDINGS AND CONCLUSIONS

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(1 ) . HDFC depos i t s a r e i nc r ea s ing yea r by yea r bu t a t d im in i sh ing

r a t e . Whe re depos i t s a r e i nc r ea s ing l i ke 2512 .69 i n 1995 -96 ,

3502 .19 i n 1996 -97 t o 6223 .85 i n 1999 -2000 and 8471 .02 i n 2004 -05

w i th a dec l i ne i n 2007 -08 a t 7840 .09 a s compa re t o p r ev ious yea r

2006 -07 w i th 9337 .65 .

(2 ) . Main mo t ive beh ind depos i t i ng money i n f i xed depos i t s i s t ha t

peop l e wan t t he i r money s a f e and i n t ac t f o r some t ime . Gene ra l l y

i ncome de r i ved f rom f i xed depos i t s i s so l ow a s compa re t o o the r

i nves tmen t op t i ons t ha t peop l e don ’ t cons ide r i n t e r e s t i ncome wh i l e

go ing fo r f i xed depos i t t hey j u s t wan t t ha t t he i r money can be s a f e

fo r t h i s t hey cons ide r t hose i n s t i t u t e s wh ich can ensu re s a f e ty o f

t he i r f unds .

(3 ) . HDFC has been g iven “AAA” r a t i ng by CRISIL and ICRA

( in s t i t u t i ons wh ich r ank f i nanc i a l i n s t i t u t i ons on t he ba s i s o f

s e rv i ce s p rov ided by t hem) o f wh ich gene ra l pub l i c i s no t awa re o f .

I f gene ra l pub l i c i s awa re o f t h i s f a c t t hen HDFC can have more

depos i t s a s peop l e on ly go fo r t he i n s t i t u t e s , wh i ch can ensu re t hem

sa f e ty o f t he i r f unds .

(4 ) . Less awa renes s abou t HDFC depos i t s i n gene ra l pub l i c . HDFC i s

ma in ly r e cogn i zed a s l oan g iv ing i n s t i t u t i on and ve ry f ew peop l e a r e

awa re o f t he f a c t t ha t HDFC a l so go fo r f i xed depos i t s . When 30

peop l e we re a sked abou t HDFC depos i t s on ly 8 we re awa re o f i t and

22 peop l e we re unaware o f HDFC depos i t s . Th i s c an be exp l a ined

w i th t he he lp o f f o l l owing d i ag ram.

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Figure 1 1

yes27%

no73%

yes

no

(5 ) . Peop l e a l so t ake i n to cons ide ra t i on t he s e rv i ce s p rov ided t o

t hem by o the r HDFC depa r tmen t s . I f t hey a r e unsa t i s f i ed w i th t he

s e rv i ce s o f any HDFC depa r tmen t ’ s s e rv i ce s t hen i n sp i t e o f t he f a c t

t ha t HDFC i s g iv ing h ighes t i n t e r e s t r a t e on 1 yea r depos i t t ha t i s

7% p . a peop l e w i l l avo id t o go fo r HDFC depos i t s .

RECOMMENDATIONS

(1 ) . ADVERTISEMENT :

Peop l e a r e no t awa re o f HDFC depos i t s t he r e fo re i n o rde r t o

i nc r ea se t he awa renes s l eve l among pub l i c more adve r t i s emen t s

shou ld be t he r e . These adve r t i s emen t s c an be i n newspape r s ,

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economic j ou rna l s o r t hey can be on t e l ev i s i ons . Peop l e shou ld be

made more aware o f t he f a c t t ha t HDFC L td ha s been g iven ‘AAA’

r ank ing by CRISIL and ICRA.

(2 ) . Peop l e j u s t wan t s a f e ty o f t he i r f unds wh i l e depos i t i ng t he i r

money i n f i xed depos i t s and a s HDFC L td ha s t he c apab i l i t y o f

keep ing t he funds s a f e t he r e fo re i t shou ld h igh l i gh t t h i s c apab i l i t y

t o t he pub l i c so t ha t more funds can be ga ined . Today a l so many

peop l e be l i eve t ha t depos i t i ng money i n gove rnmen t banks i s more

s a f e r a t he r t o depos i t t he money i n any p r i va t e bank t he r e fo re i t i s

ve ry impor t an t f o r HDFC to ensu re s a f e ty o f t he i r f unds .

(3 ) . Be t t e r Se rv i ce s c an f e t ch more cus tomer s . Some t imes i t happens

t ha t peop l e cons ide r o ld r e l a t i ons and s e rv i ce s p rov ided by t he bank

be fo re go ing fo r f u tu r e dea l i ngs .

(4 ) . HDFC has won so many p re s t i g ious awa rds o f wh ich peop l e a r e

no t awa re t he r e fo re HDFC shou ld adve r t i s e more and more so t ha t

more peop l e c an become aware o f t h i s f a c t and t h i s c an he lp t o f e t ch

more depos i t s .

BIBLIOGRAPHY

ANNUAL REPORT OF HDFC Ltd

www.hdfc .com

www.myir is .com

72

www.google .com

RESEARCH METHODOLOGY METHODS & TECHNIQUES ( C.R KOTHARI)

www.hdfc .com

Comparat ive s tudy of di f ferent banks

73

ANNEXURE

QUESTIONNAIRE FOR CUSTOMER’S VIEWS ON FIXED DEPOSITS

Name: Ph no :

Q1. Are you aware o f HDFC f i xed depos i t s? Yes /No

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I f Yes : - Do you know HDFC o f fe rs h ighes t in te res t ra tes on

depos i t s fo r 1 year? Do you know HDFC is be ing ra ted ‘AAA’ by CRISIL and

ICRA fo r 11 t h consecu t i ve year?

Q2. Do you have any inves tment in HDFC depos i t s? YES/NO

Q3. What wou ld be the ma in reason fo r you to inves t in depos i t s? Pu t a t i ck mark .

To pu t your money sa fe and in tac t fo r somet ime. To spread your money in d i f fe ren t inves tment op t ions . To ensure ava i lab i l i t y o f money a t some po in t o f t ime. To ensure regu la r i t y o f income.

Q4. Can you ment ion the per iod fo r wh ich you wou ld inves t in f i xed depos i t s?

<1 year 1-2 years 2-5 years 5 years and above

Q5. I f you p re fe r to inves t in depos i t s , wha t c r i te r ia you use fo r se lec t ing one? Ass ign ra tes & s imu l taneous ly ra te HDFC depos i t s on these c r i te r ia .(Sca le 1 -5 , 5 to exce l len t and 1 to poor ) .

Se lec t ion c r i te r ia HDFC rank ing

I n te res t ra tes - - - - - - - - - - - - - - - - - - - - - - - -

Safe ty o f funds - - - - - - - - - - - - - - - - - - - - - - - -

L iqu id i t y - - - - - - - - - - - - - - - - - - - - - - - -

Serv ices - - - - - - - - - - - - - - - - - - - - - - - -

Add i t iona l bene f i t s - - - - - - - - - - - - - - - - - - - - - - - -

Marke t repu ta t ion - - - - - - - - - - - - - - - - - - - - - - - -

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Q6. Are you sa t i s f ied w i th HDFC depos i t s? YES/NOI f no t , s ta te the reason—

Q7. Your sugges t ions may he lp us serve you be t te r & o f fe r you the bes t .(P lease be spec i f i c in g iv ing sugges t ions) .

THANK YOU

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