* India’s households shift from FDs, gold to equities, SIPs, wealth growth.
* Young investors embrace demat accounts, fractional shares, ETFs, global stocks, financial apps.
* Strategic investing, diversification, financial education essential for long-term financial freedom India.
When I was younger, I remember my parents taking great pride in their fixed deposits (FD). Every time interest rates went up, it was dinner table news. Gold jewellery was another “investment” families quietly accumulated. For them this was wealth creation and to be fair, it worked. Those habits helped households stay financially secure. Buying a TV or washing machine was a family decision; savings began a year in advance and if the money fell short the purchase was postponed. Lifestyle adjusted to savings. Taking credit was never an option.
But the world today looks very different. Inflation eats into FD returns, gold does not always shine and real estate is no longer the one-way street it used to be. Meanwhile India is one of the fastest growing economies and our markets reflect that growth. Buying decisions are now impulsive, EMIs have replaced saving goals and lifestyle cannot wait. The question has shifted: Why should I save? I would rather invest smartly to grow my wealth. Yes, there is risk and that is acceptable.
In the US nearly half of household wealth is linked to equities or retirement funds. In China retail investors have become a market force over the past two decades. In India mutual fund assets under management are still around 30% of bank deposits compared with 150% in the US and 200% in the European Union.
The composition of household savings is shifting. Deposits fell from 56% of financial assets in 2013–14 to 41% in 2023–24 while equities and debentures rose from 2% to 9%. Pension and provident funds climbed from 15% to 21%. Yet net financial savings fell to 5.3% of GDP in 2023–24, the lowest in five decades as liabilities rose faster than assets.
The shift has started. 75% of new demat accounts are in the under-30 age group. Till 2020, we had about 4 crore demat accounts, built over 20 years. Today, there are over 20 crore, 60% from tier 3 or smaller cities. Systematic investment plan (SIP) inflows have surged from around ₹3,300 crore a month in 2017 to over ₹28,000 crore a month now. SIP contributions grew from ₹0.4trn in 2016-17 to ₹2.9trn in 2024-25 at 28 % compound annual growth rate. Young investors are buying fractional shares, exchange traded funds and even global stocks through apps. Financial content creators are making compounding and diversification as relatable as cricket scoreboards.
We are not there yet, but change is fast thanks to internet and smartphone penetration. Awareness is growing, though speculation is also rising. Even today, 84% of Indian household wealth is in physical assets, with just 5% in financial assets, showing how far we still need to go.
Invest, not trade. Investments have objectives, guidance and a medium-term (2–5 years) to long-term (5+ years) horizon. Patience is key.
Take informed decisions. Do not invest because a stock is trending on social media. Invest because it is backed by research on management, business model and governance.
Risk is not bad, it is inevitable. Avoiding risk means no growth. Diversify across equity, debt, gold and alternates and rebalance regularly.
Ask for help. We do not self-diagnose health issues, we go to doctors. Money deserves the same respect. A good adviser ensures your strategy matches your goals.
Regulators have built trust but financial institutions must simplify products, create investor-friendly experiences and expand financial education beyond metros. The real shift will come when smaller towns, where savings are high, invest meaningfully. Surveys show 43% of high net-worth individuals save less than 20% of post-tax income and over half allocate more than 20% to real estate, highlighting both under-preparedness and overexposure.
This decade belongs to India. The economy is strong, the demographic is young and capital markets are expanding. But households that remain “savers’’ instead of becoming strategic investors risk missing out on the growth story. If our parents gave us thrift, it is our turn to give the next generation financial freedom not just through saving but by investing with purpose.
The time to make that shift is now.
