Why fixed deposits are preferred choices among Indian investors? Survey explains

Fixed Deposits (FDs) continue to be popular with Indian investors. According to a study by Kuvera, an online wealth management platform, the reasons behind FD being the preferred choice are safety from market volatility, simplicity, and rising interest rates. Usually, FD is the traditional investment mechanism offered by banks and other financial institutions. FD is risk-free and offers guaranteed returns.

Kuvera survey shows that almost half of 1.6 million investors said they chose FD when they need money within 3 years with safety. This would be 44% of the total number of recorded survey respondents. Another 23% chose FD to send emergency funds to beat inflationary.

Gaurav Rastogi, co-founder of Kuvera said: “FD is quite popular among Indians and we set out to find out why it is so. It is not surprising given the simplicity of FD and its simplicity. The safety it ensures has attracted investors to FD. It’s an effective way of protecting emergency funds from market volatility and a large portion of our investors agree.”

Additionally, the Kuvera survey found that more than a fifth of respondents turned to FDs for emergency funds while beating inflation. About 12% of investors prefer FD because of its simplicity and familiarity and 1 in 10 people invest in FD to be safe from market fluctuations.

Rastogi added, “with the RBI raising repo rates to beat inflation, now is a good time to invest in FDs and we are sure to see a peak in FD investments. They are safe and providing investments are guaranteed on fixed terms. This sense of security and assurance attracts many of our investors to FD, especially for those with a low risk appetite.”

Furthermore, the online platform cited a 2017 survey by Sebi to understand investor behavior and found that more than 95% of households prefer to deposit money in fixed deposits, just 10 % likes mutual funds and stocks. In fact, according to data from the Reserve Bank of India (RBI), total bank deposits hit an 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 that offers commission free direct plans, FDs, Indian stocks and US Stocks investing in India. Its team consists of former money managers and experts who help investors choose from a wide range of investment options such as mutual funds, fixed deposits and Indian and US stocks. To date Kuvera has facilitated 4.5 billion transactions on its online platform.

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