Fixed Deposit or Mutual Funds? What is the No. 1 investment choice for Indians? Survey reveals

Not Fixed Deposit, most Indians now consider mutual funds as their No.1 choice for investing and saving, according to a survey.

“This year, Mutual Funds have emerged as the #1 financial investment instrument in the country. This preference for investing in mutual funds over putting away excess money in savings accounts or fixed deposits, has been observed for the first time, since the initiation of this survey,” says an all-India survey of over 620 adults by Scripbox.

According to the survey, investing is now being considered a more rewarding action than saving, not just financially, but also in terms of overall self-worth.

There is an overwhelming consensus on the benefits of taking control of one’s finances. Investing more has acted as a catalyst in building confidence about the future and brought about an improvement in general well-being, respondents said in the survey.

When asked about their advice to their younger self, most respondents said it would be to start investing early.

“Saving and investing, while often used interchangeably, are very different. While saving is
an important first step, the power of wealth is best felt when it is compounded by investing. Simply put, money saved but not invested would be unable to beat inflation let alone help meet long-term goals,” says Atul Shinghal, Founder and CEO of Scripbox.

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“Every year on World Savings Day, we have stressed the importance of investing, so that people can make their money work as hard as they do. It is incredibly encouraging to see a positive shift in the attitude towards investing over the last few years, both as a result of growing awareness and maturity, as well as the impact of unprecedented macro events,” he adds.

Key findings

  • 57% of respondents consider themselves to be savers and an encouraging 43% believe that they have transitioned to being more active investors.
  • 60% of the respondents believe that the shift in the investing mindset has been significantly driven by the prevailing macroeconomic trends, like inflation, the potential recession on the horizon, as well as the uncertainty brought on by the pandemic.
  • Nearly 27% of the survey respondents claim that they have reduced their spending in the last year. 50% are saving between 10 and 30 per cent of their income.
  • In terms of investments, 23% of respondents have started actively investing in the last year and 20%
    of existing investors have made further increments.
  • 30% of respondents chose to build an emergency fund amongst their top 2 financial goals this year, similar to 2021. This is followed by retirement planning and children’s education, at 27% each.
  • While children’s education as a goal held more prominence last year compared to retirement planning, the latter has received more attention as per this year’s survey.

The survey also highlights the difference in the way men and women choose financial goals. Saving for children’s education has emerged as one of the top two priorities for 36% of women, continuing the trend from 2021. Though men continue to invest more than women, the survey findings show that the amount invested by women has doubled in the last 4 years.

Also Read: Digital India-themed scheme turns Rs 10,000 SIP into Rs 39 lakh in 10 years!

Interestingly, men are starting to focus more on retirement planning (42%) over children’s education (28%) this year compared to an equal focus last year.

(Mutual fund investments are subject to market risks. Please consult you financial advisor before making any investment decision)

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