Last updated: February 08, 2023, 2:34 PM IST
To beat inflation, another 23% chose to store their emergency cash in FDs.
Nearly half of the 1.6 million investors said they would prefer fixed deposits (FDs) if they wanted safe money within three years.
Fixed deposits (FDs) are becoming increasingly popular among Indian investors. According to a study by online asset management platform Kuvera, 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 offered by banks and other financial institutions. FDs offer insured profits with no risk.
According to Kuvera’s poll, nearly half of the 1.6 million investors said they would prefer fixed deposits (FDs) if they wanted safe money within three years. This represents 44% of the total survey respondents. To beat inflation, another 23% chose to store their emergency cash in FDs.
“FDs are quite popular among Indians, and we wanted to explore why that was the case,” said Gaurav Rastogi, co-founder of Kuvera. Unsurprisingly, investors are drawn to FDs for their simplicity and the protection they offer. A significant portion of our investors agree that it’s a good way to protect emergency savings from market volatility, Rastogi added.
In addition, more than one in five respondents to Kuvera’s survey said they used FDs to park emergency savings while beating inflation. One in ten investors invested in an FDI for protection against market volatility, while about 12% of investors preferred an FDI for its familiarity and simplicity.
Since FDs are safe and offer guaranteed investments on fixed terms, Rastogi continued: “Now is a good time to invest in FDs and we will undoubtedly see a spike in FD investments. This sense of safety and security is what attracts many of our investors to FDs, especially for those with a low risk appetite.”
More specifically, the online platform used a 2017 SEBI survey to assess investor behavior, which found that more than 95% of households preferred to put their money in fixed deposits, while only 10% preferred mutual funds and shares. The total 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).
Read all the latest business news here
