54% of people choose mutual funds as preferred financial investment option, shows survey

54% of people choose mutual funds as preferred financial investment option, shows survey


The survey conducted by BankBazaar indicates that mutual funds and fixed deposits continue to be the preferred choices for financial investments among a majority of individuals. According to the survey results, 54% of respondents favor mutual funds, while 53% opt for fixed deposits. These traditional investment avenues remain popular due to factors such as perceived safety, steady returns, and ease of investment.

While mutual funds offer individuals the opportunity to invest in a diversified portfolio managed by professionals, fixed deposits are known for their stability and assured returns. The survey highlights the enduring appeal of these investment instruments in the financial landscape. The preference for mutual funds and fixed deposits is consistent with the broader trend of risk-averse investment behavior observed among a significant segment of the population.

The findings of the BankBazaar survey underscore the importance of understanding investor sentiments and preferences in the financial market. Investors often choose financial instruments based on their risk tolerance, financial goals, and the perceived stability of the investment option. Recognizing the ongoing popularity of mutual funds and fixed deposits can inform financial institutions and investment advisors in tailoring their services to meet the needs and expectations of investors.61% of mutual fund investors have invested in at least one passive fund: Study - BusinessToday

The BankBazaar survey reveals that the most popular financial product overall is the savings bank account, chosen by 77% of respondents. While a savings account is not traditionally considered an investment avenue, its popularity suggests that individuals value the liquidity, safety, and ease of access associated with these accounts. Savings accounts serve as a fundamental tool for managing day-to-day finances, providing a secure place to hold funds, make transactions, and earn nominal interest.

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The widespread preference for savings accounts aligns with the fundamental role they play in personal finance. These accounts are a cornerstone for individuals to receive income, save money, and meet short-term financial needs. The popularity of savings accounts underscores their significance in the financial ecosystem, serving as a foundational component of an individual’s overall financial strategy.

Understanding the prominence of savings accounts in the financial preferences of individuals is crucial for financial institutions and policymakers. It reflects the inherent need for accessible and secure financial tools that cater to the basic financial requirements of the population. The survey results highlight the enduring relevance of savings accounts in the broader landscape of financial products and services.

The BankBazaar survey provides insights into the financial preferences of individuals, indicating notable trends and shifts in investment choices, particularly against the backdrop of global geopolitical tensions and high inflation in the past two years.

The survey reveals that mutual funds and fixed deposits remain the top choices for financial investments, with 54% and 53% of respondents favoring these options, respectively. These choices indicate a continued interest in both market-linked investments (mutual funds) and traditional fixed-income instruments (fixed deposits). Mutual funds offer individuals the opportunity to participate in the stock market with professional fund management, while fixed deposits provide a secure and predictable avenue for preserving capital.

Market risk, what? People start investing more in Mutual Fund SIP: Check interesting numbers - Money News | The Financial Express

Despite these investment preferences, the most popular financial product overall is the savings bank account, chosen by 77% of respondents. The enduring popularity of savings accounts underscores their fundamental role in managing day-to-day finances, providing liquidity, safety, and ease of access.

When considering the gender split, the survey indicates that men are slightly more inclined towards savings bank accounts, with 79% choosing this option compared to 76% of women. This suggests subtle variations in financial preferences between genders, with men showing a slightly higher preference for the security and accessibility offered by savings accounts.

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Notably, there has been a decrease in the number of women investing in mutual funds in the current year, with only 50% participating, compared to 56% of men. This shift may be attributed to various factors, including changes in risk appetite, financial literacy, or evolving economic conditions.

The survey highlights the impact of geopolitical tensions and high inflation on the financial landscape, leading to reduced or stagnant savings for many individuals in India during 2023. These external factors have likely influenced investment decisions, prompting individuals to reevaluate their financial strategies and opt for options that align with their risk tolerance and financial goals in the current economic environment.

The BankBazaar survey delves into regional variations and shifting trends in savings and investment patterns, shedding light on key developments in the financial landscape of India.

The survey indicates a substantial drop in savings in the North region, amounting to a significant 44%. This decline underscores the economic challenges faced by individuals in this region, potentially influenced by local factors or broader economic conditions.In charts: For the first time, mutual funds pip FDs as the most popular form of investment - Times of India

In contrast, the West region recorded the highest percentage of stagnating savings at 25%. Stagnation in savings suggests that individuals in this region may be grappling with factors such as stagnant income, rising costs, or challenges in identifying lucrative investment opportunities.

Cryptocurrency, which once held appeal as an alternative investment, has witnessed a decline in popularity. Revised laws imposing a 30% tax on cryptocurrency gains have likely contributed to this shift, prompting individuals to revisit more conventional investment options such as fixed deposits, stocks, and mutual funds. The regulatory environment plays a crucial role in shaping investment preferences, and the survey reflects how changes in cryptocurrency taxation impact investor choices.

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A concerning trend highlighted by the survey is the decline in retirement planning, with only 38% of individuals saving for retirement. This marks a 7% decrease from the previous year and underscores the need for increased awareness and emphasis on retirement preparedness. Adequate retirement planning is crucial to ensure financial security and a comfortable lifestyle in one’s later years.

The survey also draws attention to the inadequacy of insurance coverage in India. Alarmingly, 6% of respondents report having no insurance at all, while only 16% possess health insurance. This data underscores the importance of enhancing insurance awareness and accessibility to provide financial protection against unforeseen events.

Overall, the survey offers valuable insights into the dynamic financial landscape of India, highlighting regional variations, evolving investment preferences, and areas that require attention and intervention to promote financial well-being and security among the populace.

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