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Financial Literacy Short Notes

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109 views

Financial Literacy Short Notes

Uploaded by

paulsharmistha094
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Short Notes: Financial Literacy (COMM103M)

Chapter 1: Introduction to Financial Literacy

- Financial Literacy: Knowing how to manage your money well, including earning, saving, spending,

and investing.

- Need for Financial Literacy: Helps in better money management, avoiding debt, and achieving

financial security.

- Role of Financial Education: Teaches smart financial habits and helps improve your overall

financial well-being.

Chapter 2: Basics of Personal Finance

- Savings: Money kept aside for future needs.

- Investment: Using money to earn more money (e.g., stocks, bonds).

- Borrowing: Taking money as a loan to repay later with interest.

- Income and Expenses: Income is money earned; expenses are money spent.

- Surplus/Deficit: Surplus = Income > Expenses; Deficit = Expenses > Income.

- Assets and Liabilities: Assets are things you own; liabilities are debts you owe.

- Inflation: Rise in prices over time, reducing money's value.

- Time Value of Money: Money today is worth more than the same amount in the future.

- Active Income: Earned by working (e.g., salary).

- Passive Income: Earned without active work (e.g., rent).

Chapter 3: Financial Planning

- Financial Planning: Organizing finances to achieve life goals.

- Steps involved in Financial Planning:

- 1. Assess financial situation.


- 2. Set goals (use SMART: Specific, Measurable, Achievable, Relevant, Time-bound).

- 3. Create a plan.

- 4. Implement the plan.

- 5. Monitor and adjust.

- Three Pillars of Investment: Liquidity (easily accessible), Safety (low risk), Returns (profit).

- Risk and Return: Higher risk can lead to higher returns; lower risk means safer but lower returns.

Chapter 4: Banking Services and Products

- Types of Banks: Commercial, Cooperative, Public, Private, Rural, and Development banks.

- Bank Accounts:

- - Savings Account: For regular saving.

- - Term Deposit: Fixed deposit for a specific time.

- - Current Account: For businesses with frequent transactions.

- - Recurring Deposit: Save monthly for a fixed term.

- - PPF: Long-term savings for tax-free returns.

Chapter 5: Formalities and KYC Norms

- To Open a Bank Account:

- - Fill the form.

- - Submit documents (PAN, address proof).

- - Complete KYC (Know Your Customer).

Chapter 6: Loans and Borrowing

- Types of Loans:

- - Short-Term: Repaid within a year (e.g., personal loans).

- - Medium-Term: Repaid in 1-5 years (e.g., car loans).

- - Long-Term: Repaid in more than 5 years (e.g., home loans).


Chapter 7: Digital Payments

- Cashless Banking: Transactions without cash, using technology.

- e-Banking: Online banking via mobile apps or websites.

- ATM: Withdraw or deposit cash.

- Debit Card: Directly uses your bank money.

- Credit Card: Borrowed money to repay later.

- App-Based Payments: UPI apps like Google Pay, Paytm.

Chapter 8: Banking Complaints and Ombudsman

- Banking Complaints: Issues like failed transactions or wrong charges.

- Banking Ombudsman: A system to resolve complaints free of cost.

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