Last Updated: February 08, 2023, 14:34 IST
To beat inflation, another 23% chose to store their emergency cash in FDs.
Nearly half of the 1.6 million investors indicated they preferred fixed deposits (FDs) when they wanted money within three years with safety.
Fixed deposits (FDs) are becoming more and more popular among Indian investors. According to a study by Kuvera, an online wealth management platform, the reasons why FDs are preferred investments are that they are safe from market volatility, simplicity and their rising interest rates. FDs are typically the conventional investment vehicles that banks and other financial institutions offer. FDs offer assured profits with no risk.
According to Kuvera’s poll, nearly half of the 1.6 million investors indicated they preferred fixed deposits (FDs) when they wanted money within three years with safety. This represents 44% of the survey’s overall respondents. To beat inflation, another 23% chose to store their emergency cash in FDs.
“FDs are quite popular among Indians, and we set out to explore why that was the case,” said Gaurav Rastogi, co-founder of Kuvera. Unsurprisingly, investors are drawn to FDs by their simplicity and the protection they ensure. A significant portion of our investors concur that it’s a good way to shield emergency savings from market volatility, Rastogi added.
Additionally, more than one in five respondents to Kuvera’s survey said that they used FDs to park emergency savings while beating inflation. One in ten investors invested in an FD for protection against market volatility, while about 12% of investors favoured an FD for its familiarity and simplicity.
Since FDs are secure and provide guaranteed investments at fixed terms, Rastogi continued, “Now is a good time to invest in FDs and we will undoubtedly see a peak in FD investments. This sense of safety and assurance attracts many of our investors to FDs, especially for those who have a low-risk appetite.”
More specifically, the online platform used a 2017 SEBI poll to assess investor behaviour, which discovered that over 95% of households preferred to put their money in fixed deposits, with only 10% preferring mutual funds and stocks. The overall amount of bank deposits reached an all-time high of $2,242.775 billion in March 2022, according to figures from the Reserve Bank of India (RBI).
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