NISM Series XVIII – Financial Education Certification Examination
Test Objectives
Unit 1: Introduction
1.1. Recognize the need for Financial Literacy
1.2. Understand the role of financial education to achieve financial well being
1.3. Understand the Importance of Financial Planning
Unit 2: Key Concepts in Personal Finance
2.1. Know the Key concepts of Personal Finance such as Savings, Investment, Borrowing, Income and Expenses, Surplus/Deficit, Assets and Liabilities, Inflation, Time Value of Money, Active and Passive Income, Instant and Delayed Gratification, etc.
2.2. Understand the power of compounding and calculation using Rule of 72
2.3. Discuss the concept of Rupee Cost Averaging
Unit 3: Financial Planning and Budgeting
3.1. Define Financial Planning.
3.2. Describe the Financial Planning Process.
3.3. List the various steps involved in Financial Planning Process and discuss these steps in detail.
3.4. Describe SMART financial goals with examples
3.5. Understand the three pillars of investments
3.6. Understand the concepts of risk and return
3.7 Define budgeting, understand its key aspects and its importance in financial planning
Unit 4: Savings Related Products
4.1. Know various types of bank accounts such as Savings account, Current account, fixed deposits, recurring deposits
4.2. List the various modes of transfer through banking channel such as NEFT, RTGS, IMPS, UPI.
4.3. Discuss the account opening process including the importance of KYC norms
4.4. Discuss the do’s and don’ts while using digital payments
4.5. Differentiate between credit card and debit card
4.6. Explain the role of Reserve Bank of India
Unit 5: Investment in Securities Market
5.1. Understand various investment avenues offered by Securities Markets
5.2. Differences between Primary Market and Secondary Market
5.3. Understand operational aspects of securities markets such as placement of orders, contract note, pay-in and pay-out, trading and settlement cycle.
5.4. Discuss various risks involved in investing in securities markets
5.5. Discuss the benefits of investing through Mutual Funds
5.6. Know the Mutual Fund categorization and understand product labelling and riskometer of mutual funds
5.7. Understand Systematic Investment Plan (SIP) and its advantages
5.8. Discuss the role played by Commodity Derivatives markets in hedging of commodity price risk
5.9. Understand the products traded in Commodity Derivatives Exchanges and benefits offered by them to various stakeholders
Unit 6: Insurance related Products
6.1. Explain the role of Insurance as risk management tool
6.2. Understand the broad classification of various Insurance avenues and know the key features of each of these categories
6.3. Discuss the regulatory role of IRDAI
Unit 7: Pension, Retirement and Estate Planning
7.1. Describe the importance of Pension and its role in providing financial security in old age
7.2. Know NPS and its key features
7.3. Discuss the features of Ties-I and Tier-II accounts of NPS
7.4. Understand the investment options under NPS
7.5. List the key features of retirement planning
7.6. Define Estate Planning and understand the importance of nomination, will & PoA
Unit 8: Borrowing Related Products
8.1. Define Borrowing, Collateral and Equated Monthly Installments (EMI)
8.2. List of Documents required for obtaining Loans
8.3. List various loan products offered by Financial Institutions and know the key features of these loans
8.4. State the 5Cs of Credit
8.5. Discuss the role of credit information organizations and understand the Credit Score
Unit 9: Government schemes for various savings and investment options
9.1. Discuss the salient features of various Government Schemes
9.2. Understand the Insurance schemes of Government of India and their important features
9.3. Understand the Pension schemes of Government of India and their important features
9.4. Understand the Borrowing schemes of Government of India and their important features
Unit 10: Tax Savings Options
10.1. Describe the concept of Income Tax
10.2. List the various deductions allowed under Income Tax Act and their key features
Unit 11: Caution against Ponzi Schemes and unregistered Investment Advisers
11.1. Define Ponzi scheme and know how to spot a Ponzi scheme (broad signs)
11.2. Discuss various financial frauds such as Investment frauds, Lottery frauds, Mass marketing frauds, Credit card frauds.
11.3. Understand the do’s and don’ts while dealing with Investment Advisers and need for caution against Unregistered Investment Advisers
Unit 12: Grievance Redressal Mechanism
12.1. Familiarize with SEBI SCORES and know how it works
12.2. Understand the Grievance Redressal mechanism in Securities Markets
12.3. Understand the Grievance Redressal mechanism in Banking industry
12.4. Understand the Grievance Redressal mechanism in Insurance industry
12.5. Understand the Grievance Redressal mechanism in Pension industry
12.6. Know various Grievance Redressal Agencies and the category of complaints they try to resolve
