Class VIII ppt

1. Financial Education
Class VIII
A Section 8 (Not for Profit) Company

2. Introduction to
Insurance

3. What is Insurance?
 Insurance is a contract between the insurer
(insurance company) and the insured
(policyholder).
 The person or object covered under insurance
is called the insured.
 The insurance company that receives the
premium as part of consideration from
insured to cover/compensate the financial
loss is called insurer.
 Insurance are of two types : Life and Non-
life.
 Life insurance is financial cover for
contingency linked with human life like
death, disability, accident etc.

4. What is Insurance? (cont.)
 The person(s) nominated by the policyholder
to receive the policy benefits in the event of
his death is called a Nominee.
 The duration of the insurance policy is called
the policy term.
 The amount an insurer is obliged to pay in
case of occurrence of a loss/damage to the
insured due to the specified event is called
the Sum Assured.

5. Types of Insurance
1. Life Insurance : A contract between an
insured and an insurer, where the insurer
promises to pay the nominee of the insured
a sum in exchange for a premium, upon
death of the insured person.
2. Health Insurance : It covers the cost of an
individual’s medical and surgical expenses.
3. Travel Insurance : It is intended to cover
medical expenses, financial default and
other losses incurred while traveling.

6. Types of Insurance (cont.)
4. Home Insurance : It safeguards the
household assets and covers you for
damage to your home due to uncertainties
and unforeseen contingencies and other
damages.
5. Motor Insurance : It provides protection for
our vehicle against financial loss and
liability that could result as a part of
accident or theft.

7. Types of Banks

8. Scheduled and Non-Scheduled Banks
 A scheduled bank is that which has been
included in the Second Schedule of the
Reserve Bank of India.
 It fulfills the following conditions:
-The bank must maintain minimum capital as
stipulated by RBI. It assures the RBI about
it’s operations not being detrimental to the
interest of the depositors.
-It is a corporation or a co-operative society
and not a partnership or a single owner firm.
Banks that are not included in the Second
Schedule of the Reserve Bank of India Act are
non-scheduled banks .

9. Types of BanksTypes of Banks

10. Classification on the Basis of Ownership
 Public Sector Banks: Owned and controlled by
the government. In India, nationalized banks
and the regional rural banks come under this
category.
 Private Sector Banks: Owned by private
individuals or corporations and not by the
government or co-operative societies.
 Co-operative Banks: Operated along co-
operative lines.

11. Classification on the Basis of Domicile
 Domestic Banks : Registered and incorporated
within the country.
 Foreign Banks : Foreign in origin and have their
head offices in the country of origin.

12. Cheque
 A cheque is a document that orders a
payment of money from a bank account.

13. MICR Code and IFSC
 Magnetic Ink Character Recognition, or MICR
is a character recognition technology used
primarily by the banking industry to facilitate
the processing of cheques.
 The characters are usually printed on the
bottom strip of cheque leaf.
 The Indian Financial System Code, IFSC is an
11 character code for identifying the bank
and branch in which an account is held.
 IFSC is used for both the NEFT and RTGS
funds transfer systems.

14. MICR Code and IFSC
 Magnetic Ink Character Recognition, or MICR
is a character recognition technology used
primarily by the banking industry to facilitate
the processing of cheques.
 The characters are usually printed on the
bottom strip of cheque leaf.
 The Indian Financial System Code, IFSC is an
11 character code for identifying the bank
and branch in which an account is held.
 IFSC is used for both the NEFT and RTGS
funds transfer systems.

15. Tax
Direct Taxes
Income Tax: Government levy (tax) imposed
on individuals or entities (taxpayers) that
varies with the income or profits (taxable
income) of the taxpayer.
Property Tax: Property tax or ‘house tax’ is a
tax on buildings, along with land, and imposed
on its owners. The tax is levied by the local
government where the property is located.

16. Tax
Indirect Taxes
Goods and Services Tax
The goods and Services tax has revolutionized
the Indian taxation system. The GST Act was
passed in the Lok Sabha on 29th
March, 2017
and came into effect from 1st
July, 2017
GST is one indirect tax for the whole nation,
which will make India one unified common
market. GST is a single tax on supply of goods
and services right from the manufacturer to the
consumer.

17. Why do we pay taxes?
What are taxes used for?

18.  Taxation is the source of money used by the
government for development of the country,
e.g. Developing roads, infrastructure,
education institutions and many more.
 Taxes are paid by all the responsible citizens
of the country.
 Government use different kinds of taxes and
vary the tax rates.
 Taxes may reduce taxpayers’ income.

19. Money in and Money out

20. Types/Kinds of a cheque
 Bearer Cheque: It is payable to the person
specified therein or to any one else who
presents it to the bank for payment. The
words “or bearer” appearing on the face of
the cheque is not cancelled.
 Order Cheque: It is expressed to be payable
to a particular person without containing
words prohibiting transfer or indicating that
it will not be transferable.
 Open/Uncrossed Cheque: When a cheque is
not crossed its payment can be obtained at
the counter of the bank.
 Crossed Cheque: A crossed cheque cannot be
encashed at the cash counter of a bank but
can only be credited to the payee’s account.

21. Types/Kinds of a cheque (cont.)
 Ante-Dated Cheque: It is a cheque bearing a
date earlier than the date on which it is
presented to the bank. It is valid upto 3
months from the date of issue of the cheque.
 Post-Dated Cheque: If a cheque bears a date
which is yet to come it is known as post-
dated cheque. It cannot be honoured earlier
than the mentioned date.
 Stale Cheque: A cheque when presented for
payment after 3 months from the date of the
cheque is called stale cheque.

22. Demand Draft (DD)/Payment Order
An instrument used by individuals to make
payments or transfer money.
- It is a much safer and certain method of
payment than cheques.
- It can be prepared with cash payment or by
paying through your bank account.
- The main purpose of a draft is to guarantee the
certainty of payment to the payee.
- A DD is valid for usually 3 months. Banks may
charge a commission for issuing Payment
Orders and Banker’s Cheques.
- Details required to send a DD are as follows:
Type of DD, the mode of payment to the bank,
the concerned place where money is to be paid,
name of the recipient and the amount.

23. How to open a bank
account

24. Opening of Account
 The procedure and application form used for
opening accounts are more or less same in all
banks which is as follows:
Requirements:
- Address Proof and Identity Proof
- 2 Photographs
- Minimum Balance
- In the form, the photo of the individual who
is opening the account needs to be affixed in
the space provided.
- Bank maintains a Card which has two
specimen signatures of the account holder.
- Introduction by an existing Account Holder
when not complying to KYC Norms.

25. General Features of Children’s Bank Account
 A guardian or a parent can open an account
for a minor. It can be held jointly or
independently. For an independent account
the minor has to be more than 10 years of
age.
 The parent/guardian can choose to get bank
statements on a regular basis.
 They also have the option to give instructions
to the bank to transfer certain specified sum
of money into the child’s account on a regular
basis.
 All the facilities provided in a savings account
is provided in this as well.

26. General features (cont.)
 Some banks also provide life insurance cover
to the parent/guardian.
 The guardian/parents should hold an account
with the bank where he/she wants to open
an account for the minor.
 Minimum balance has to be maintained,
failing to which penalty is imposed.
 Once the minor account holder turns into
major, the account will be treated as a
regular account.

27. Insurance
A story

28.  All the villagers assembled for a discussion
after a series of uncertainties.
 An educated individual from the village
suggested that they should protect
themselves from such uncertainties through
insurance.
 He explained that group insurance is better
than individual insurance.
 Group insurance saves the insurers from the
trouble of issuing multiple insurance policies.
 Health insurance can also be availed under
group insurance and benefits of cashless
facility can be taken.
 For this, only an ID proof is required at the
hospital after availing the facility.

29. Filling of deposit and withdrawal slips

30. Circled
number
Details Entry in the above
slip

32. Circled
number
Details

33. Operating Your Account
 Making a deposit: To deposit money into your
account there are the following options:
- If a cheque is received, the beneficiary will
deposit it with his banker who will collect the
money through clearing house system, where
banks in a city exchange cheques with one
another and settle the payment by arriving at
a net amount of payables and receivables.

34. Operating Your Account (cont.)
 Making a withdrawal:
- You can write a cheque made out to ‘Cash’
- Put the date on the cheque
- Sign it like you would deposit.
- Endorse the cheque and give it to the bank
teller, who will give you the cash.
- While using an ATM, put your ATM card into
the machine, enter the PIN and specify the
amount.

35. Thank You
Email : ncfe@nism.ac.in
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