Investment Habits Among The Households: An Empirical Analysis

Structural changes have followed the transformation of India in 1991 from a highly regulated & inward oriented to an outward looking economy in which the state domination in most spheres of activity is giving way to private enterprise. The service sector in general & financial sector in particular has to play an important role in this change. In the various studies on the financial markets, it is observed that the share of rural & semi-urban areas in both money & capital market are too low. All of them suggested that for the balanced development of financial market, taping of rural & semi-urban savings is necessary. In this paper, an effort is made to study the investment habit and preferred investment avenues of the households. This study examines the investment attitude, their preferences & knowledge about capital market institutions & instruments. The study reveals that in most cases investors across all categories found them to be safer with taking up the insurance policies. It is also observed that most of the respondents show their keen interest towards the insurance products so as to get tax benefits, life protection and average profitable investment avenues. This is perhaps the most striking features of general investors and the most important factor that influences the investment decisions. Further, it is observed that the level of income also influences the investment decisions. Higher income group shows relatively high preference towards investment in share market, conversely lower and average income group shows keen preference towards insurance and banks as the most preferred investment avenues.