Schemes in which Indian Households Invest

Updated on: Jan 13th, 2022


4 min read

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Saving money is essential for all individuals, regardless of their income. A rupee saved is a rupee earned. It’s better to save money to self-fund future life events rather than being in a sorry state to seek loans. Saving money is always a good idea. Saving is easier said than done. Everybody intends to save money but, end up not doing due to various financial commitments. It’s advisable to set aside a certain sum towards saving every month and then make financial commitments.

Indians Households and Savings Indians are known to save and invest more than anybody in the world. Indians find themselves to be one of the most future-oriented individuals. They plan their future by saving and investing in suitable schemes. Indians are not risk-oriented, and they don’t invest much in the equity-linked schemes. They prefer investing in traditional investment options such as provident funds and bank deposits. Here’s where the Indian households invest the most:

Provident and Pension Funds

Indians generally prefer investing in the government-backed schemes such as Employee Provident Fund (EPF), Public Provident Fund (PPF), National Savings Certificate (NSC), and National Pension System (NPS). Investing in these schemes is considered as safe. These investments have longer lock-in periods, and this helps to inculcate financial discipline over a long time. These investment options offer attractive interest rates, and hence, they are popular.

Bank Deposits

Investing in bank deposits are considered as safe as investing in government-back schemes. There are hardly any instances of a bank defaulting on these. If there a lump sum at an Indian’s disposal, the first option that they think of is the bank fixed deposits (FDs). FDs offer a much higher interest rate than a regular savings bank account. Apart from the 5-year tax saver FDs, all other FDs offer liquidity. Indians generally park their emergency funds in FDs due to their nature of liquidity. Bank recurring deposit (RDs) is an alternative to the bank FDs. Those individuals who do not have a lump sum and wishes to invest regularly consider RD as a viable option. RDs too offer a much higher rate of interest than a normal savings bank account.

Money-Back Policies

Money back policies are widespread across the nation. Under a money-back policy, you invest a fixed sum regularly. The policy pays out a certain amount of the sum assured of the policy at fixed intervals. This helps individuals to plan their various life events as they are assured of a fixed sum. If the policyholder dies within the term of the policy, then the policy pays out the sum assured to the beneficiary/nominee. Investing in money-back policies is highly recommended for young parents.


The Indians have a lot of affinity towards the yellow metal. There is no Indian household that doesn’t possess any gold. Gold is an excellent investment option. Gold investments can be used as a hedge. Gold investments can be made in the form of jewellery, coins, bars, and bullion. Investing in gold is a traditional investment option that Indians are always attracted.

Real Estate

The Indian economy is one of the fastest growing and emerging economies in the world. The country has seen tremendous industrial growth over the last two decades, and the trend is set to continue for at least another decade. Knowing this, Indians have invested in the real estate sector. The real estate prices in the major Indian cities such as Mumbai, Delhi, and Bengaluru have skyrocketed. Apart from the investment options mentioned above, Indians invest in chit funds, insurance-oriented funds, and mutual funds. These are not so popular, but still, a considerable number of Indians invest.

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