A higher proportion of residents in Tier Three cities in India save amore than 30% of their income than their counterparts do in Tier One and Two cities, according to a report released by Fin One, which focuses on enhancing financial awareness in the country.
The report, titled “India’s Financial Outlook 2024 by Fin One” reveals key trends in the savings and investment behaviour of Indians, based on data collected by Nielsen Media. The research offers a deep dive into how different demographics, regions and genders are approaching their financial futures.
The report highlights that 42% of Tier 3 respondents save over 30% of their income, outperforming Tier 1 (35%) and Tier 2 (37%) cities in disciplined savings. This trend challenges the traditional notion of urban areas being more financially forward.
Other major findings are:
The South leads in savings: In regional savings trends, 48% of respondents from the South save 20–30% of their income, outpacing other regions in disciplined financial planning.
Younger Indians prioritise savings: Financial awareness is high among younger Indians, with 59% of 18–21-year-olds saving 20–30% of their income, compared to only 39% in the 22–25 age group. This shift underscores an early focus on building up savings.
Stocks as a preferred investment in smaller cities: Stocks are the preferred investments for 62% of Tier Three respondents, surpassing 48% in Tier Two and 31% in Tier One. Awareness of stocks is also high in Tier Three, with 91% of respondents familiar with this investment option.
Gender differences in financial preferences: The report reveals a notable gender gap in investment choices, with 48% of men preferring stocks, compared to 39% of women. Women are 2.7 times more likely to prefer insurance investments (8%) than men (3%), reflecting a greater emphasis on long-term financial security among women. 48% of women are familiar with credit scores, compared to 31% of men.
Digital education for women: Digital platforms, especially YouTube, are becoming essential for financial education, with 74% of women turning to YouTube for financial knowledge, compared to 59% of men.
Challenges in financial literacy: Financial literacy remains an area for improvement, as 2 in 5 women report difficulty understanding taxation and investments, while 1 in 2 men find investments challenging. This underlines the need for enhanced financial education.
Emergency funds in Tier One: Nearly 20% of Tier One respondents prioritise saving for emergency funds, a significantly higher rate than in Tier Two (10%) and Tier Three (10%).
Regional Investment Knowledge: Around 1 in 2 Tier One respondents are aware of bonds, compared to approximately 1 in 3 respondents in Tier Two and Tier Three focusing on the need for financial education.
Fin One, an initiative of Angel One, delivers financial educational information in regional languages and promotes responsible financial practices. Angel One is a listed retail stock broking house in India. It is a technology-led financial services company, providing broking and advisory services, margin funding and distribution of third-party financial products to clients.