According to a survey, Indians have a strong saving habit. However, Indians do not plan for long-term future other than emergencies, children’s education, and old age. They keep away from investing in long-term financial products other than life insurance. This is not the case just confined to poor or middle-class households but is common in rich households too.
Majority of Indians, nearly 70%, prefer to keep their savings in the form of liquid assets like bank or post office deposits and cash at home. They prefer the security of their earnings over returns and hence save their money in banks and other guaranteed return schemes.
Indians’ key priorities are emergencies and their children’s education and they prefer easily accessible liquid savings for these priorities. A good portion of people also save for their retirement in the form of fixed deposits and other low-risk government bonds.
Majority of Indians seem to realize the need for saving in the 56-65 age group because of the motivation to save and the need to meet old-age requirements. The strong savings habit of Indians is good, but their methods of savings are not good enough to yield maximum returns from their savings. It is high time Indians, especially youngsters start investing their money in mutual funds, IPOs and other bonds rather than fixed deposits.