Fixed deposits are the most preferred investment choice for investors to park their excess funds, and on an average Indians save Rs 42, 573 in FDs, according to data compiled by BankBazaar.
In total, India currently has Rs 103 trillion saved across 24.23 million deposits.
“The above data also shows that Indians love Fixed Deposits (FDs) and this trend continues even today despite ups and downs of interest rates in the past. It is seen that Indian senior citizens and risk averse investors opt for FD,” added Shetty.
An overwhelming 69 per cent of all households in India have saved in banking instruments while barely 4 per cent of the country’s households save in post office, revealed a survey conducted by the People Research on India’s Consumer Economy (PRICE) an independent, not-for-profit think tank.
The reason for FDs being preferred choices are safety from market volatility, simplicity, and rising interest rates, finds a study by Kuvera, an online wealth management platform.
“Fixed deposits offer a guaranteed rate of interest, which is usually higher than regular savings accounts. This provides stability and ensures that the money invested will earn a fixed return over a specified period. FDs can be opened easily with minimal documentation at any bank or financial institution. They are considered hassle-free investment options, making them accessible to a wide range of individuals,” said Adhil Shetty, CEO of BankBazaar.
A survey by investing platform Kuvera earlier this year revealed that almost half of the 1.6 million investors who responded 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. 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.
First Published: Jul 07 2023 | 1:03 PM IST