scorecardresearchWomen and Investing: 60% investors still prefer traditional investment

Women and Investing: 60% investors still prefer traditional investment options; survey reveals

Updated: 23 Mar 2023, 12:18 PM IST

Gender equity is not possible without financial equality. However, the latter is not possible without financial literacy and complete financial inclusion.

Letting women take control of their finances begets the need to explain them about the same.

Letting women take control of their finances begets the need to explain them about the same.

No one can beat a woman when it comes to saving money. However, investing remains a chore for them, which explains you will find fewer women trading in the stock market or parking their money in mutual funds and other investment options as opposed to the number queuing up in banks to sign up for traditional deposit schemes. 

Epsilon Money, an integrated new-age wealth management firm, conducted a survey on women investors, across 37 cities pan India, as a precursor to the launch of their long-term financial awareness initiative “Finance Diva”. 

The survey results highlight how fixed deposits and saving accounts continue to dominate the preferences of female investors. The results are based on data showing that roughly 60 per cent of female investors want to invest their money in traditional investment options due to their perceived liquidity and safety. The idea behind carrying out the survey was to assess women’s perspectives on finance and investment.

Varsha Chopra, Regional Director, Epsilon Money said, “The findings reflect the evolving aspirations of modern Indian women. The insights tell us that 44 per cent of women investors make their own financial decisions and for them, self-security was the main motive behind investing. Also, 56 per cent seek advice before making any financial decision. But both these groups are open to financial literacy and awareness. Using the survey insights, we are launching an ongoing initiative towards their financial empowerment.”

No doubt, we all start our investments with bank deposits. This also explains the increasing number of people allocating a part of their earnings to traditional investment options as opposed to putting money in equities and market-linked instruments. 

Nanda Padmanabhan, AGM - Communications, added, “It's a multitude of factors. The market tends to look risky from the outside as returns are not guaranteed. Considering women tend to be more risk-averse, this is one deterrent. Also, women, on average, have lesser leisure time. So, this gives them lesser time to do research on investment options to their satisfaction. This becomes another deterrent as they feel less confident investing without having as much information as they wish at hand.”

Padmanabhan added, “Historically as well women don't tend to be part of the financial decision-making process within families regardless of their income capacity. While this is changing in leaps and bounds, there's a lot of data including the BankBazaar Aspiration Index which shows women are increasingly taking charge of their finances, a lot more participation is desired.”

However, Priyanka Wadhwa, Co-Owner, Kapila Krishi Udyog Limited & Co-founder, CommsCredible has a different view on women’s idea of investing and choosing where to put their money. Wadhwa says, “According to a survey by the online investment platform Groww, almost half the women surveyed invest 20 per cent of their income every month. The survey results also smashed the myth that women do not take risks and invest only in traditional avenues such as gold and fixed deposits. While 79 per cent of women said they invest in mutual funds, 60 per cent say they invest in stocks, 32 per cent say they invest in fixed deposits, and 21 per cent say they invest in gold.”

Wadhwa shared, “In fact, women on average are better investors than men. They research their investment choices, take calculated risks, and do not chase returns. Investments made by women are thus more self-reliant, empowered, and growth-centric. Historically women are good at saving money. They are frugal and save whenever they can. The impacts of inflation are far-reaching, affecting everything from the cost of living to the interest rate on people's mortgages. Women tend to take on the role of ‘shock absorbers’ during times of financial difficulty.”

She also added, “It has also been seen that women save to realize certain financial goals like the education and marriage of children, buying a home, and so on. This may sometimes act as a double-edged sword and women might think twice before investing their money in risky assets. Women are less reactive and more patient when it comes to their investment decisions and so can come across as risk averse.”

Elucidating how we can encourage more women to look and think beyond traditional deposits and investment schemes, Madhu Smita Singh, Director, Epsilon Money shared, “India is referred to as a saving economy due to its high savings rate and an overall savings culture. In every household, women play a major role in generating savings. Encouraging more women to invest can help bridge the gap between savings and investment in India, potentially leading to greater economic growth and development. By providing women with the tools and resources to make informed investment decisions, we can promote a culture of financial literacy and increase the overall participation of women in the economy.”

Traditionally, women are chosen for their multifunctional abilities. Their ability to look into household chores as much as pay attention to office work underscores the need to induce more women into the financial world and imbibe in them the reality of how every investment works and which of them they must choose to achieve their financial goals early in life. 

Financial goals of women include retirement and buying house
First Published: 23 Mar 2023, 12:18 PM IST