Why fixed deposits are preferred choices among Indian investors? Survey explains
1 min read . Updated: 07 Feb 2023, 05:51 PM IST
Premium- Kuvera's survey reveals that almost half of the 1.6 million investors said they chose FDs when they needed money within 3 years with safety. This would be 44% of the total respondents to the survey noted. Another 23% chose FDs to park emergency funds to beat inflation.
Fixed deposits (FDs) continue to gain popularity among Indian investors. The reason behind FDs being preferred choices are safety from market volatility, simplicity, and rising interest rates, finds a study by Kuvera, an online wealth management platform. Typically, FDs are the traditional investment mechanisms that are offered by banks and other financial institutions. FDs are risk-free and give guaranteed returns.
Kuvera's survey reveals that almost half of the 1.6 million investors said they chose FDs when they needed money within 3 years with safety. This would be 44% of the total respondents to the survey noted. Another 23% chose FDs to park emergency funds to beat inflation.
Gaurav Rastogi, co-founder of Kuvera said, "FDs are quite popular among Indians and we set out to understand why it was so. Unsurprisingly, the simplicity of FDs and the safety it assures attract investors to FDs. It’s an effective method of protecting emergency funds from market volatility and a large segment of our investors agree."
Also, Kuvera’s survey found that over one in five respondents turned to FD to park emergency funds while beating inflation. Around 12% of investors preferred an FD for its simplicity and familiarity and one in 10 invested in an FD for safety from market volatility.
Rastogi added, "with the RBI increasing repo rates to beat inflation, now is a good time to invest in FDs and we will surely see a peak in FD investments. They are safe and offer guaranteed investments at fixed terms. This sense of safety and assurance attracts many of our investors to FDs, especially for those who have a low-risk appetite."
Further, the online platform cited a 2017 survey by Sebi to understand investor behaviour and found that more than 95% of households preferred to park their funds in fixed deposits, with only 10% preferring mutual funds and stocks. In fact, according to data from the Reserve Bank of India (RBI), the total bank deposits reached all-time high of $2,242.775 billion in March 2022.
Founded by Rastogi and Neelabh Sanyal in 2016, Kuvera is an online investment platform offering commission-free direct plans, FDs, Indian stocks, and US Equities investing in India. Its team consisting of ex-money managers and experts helps investors choose from a range of investment options such as mutual funds, fixed deposits, and Indian and US stocks. So far Kuvera has facilitated 4.5 crore transactions on its online platform.
