A recent survey shows that saving for their children’s education is a key goal for Indians. The India’s Life Goals Preparedness Survey by Bajaj Allianz Life Insurance also shows that financial literacy in India is low and most Indians avoid risks.
Here are some findings.
Most Indians avoid risks and score low on financial literacy
INVESTORS ARE SEEKING STABLE RETURNS MINUS THE VOLATILITY
How familiar are Indians with financial markets?
23% have no experience of financial markets
49% know a little about the markets and trends
21% are familiar with the markets and update themselves
8% are very familiar with the markets and follow it regularly
70% of millennials have little or no knowledge of the markets. Every second person living in the West zone is familiar with the markets, while only 18% of those living in the East zone understand financial markets.
How much risk are they willing to take while investing?
57% think it’s safer to invest in a range of products
38% think investing in a single product is a safe option
6% don’t know or can’t say
Majority of respondents agree that investing across a range of products is safer.
How long will they wait to exit poor investments?
38% will wait up to a year
33% will wait six months
18% will hang on to poor performers for up to three years
10% will wait up to five years
More than seven of 10 Indians will not wait for more than a year to cash in on non-performing investments.
How much returns do they expect from investments?
36% want a rate of return in line with bank interest rates
25% want returns that will account for inflation and give an additional 2-4% per annum
18% want returns that will cover inflation and give 4-6% more per annum
22% seek returns that will beat inflation and give more than 6% over it annually
One in three respondents more concerned about not losing capital rather than inflation. The preference for low risk investment is highest in East India.
When considering returns, what factors are most important?
33% think preservation of capital is more important than high returns
42% seek stable returns minus any volatility
17% are willing to accept some fluctuations in order to earn higher returns
8% want high returns and are okay with dealing with volatility in the process
Every second Indian living in the East zone prefer stable returns with minimum fluctuations. One third of respondents rather preserve their capital than earn good returns.
Source: Bajaj Allianz Life India’s Life Goals Preparedness Survey, in association with Kantar IMRB. The survey had 1,681 respondents across 13 cities.