Investment trends: Gold emerges as top investment option for southern states, stocks gaining momentum, says survey

Investment in stock markets: A latest survey on investment trends and preferences in southern states of India has stated that gold remains the top investment choice of people in  — Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala. The survey titled, How South India Invests, further noted that there is an increasing enthusiasm for stock market investments in South India and is expected to go higher in the further. 

Karnataka stood out with 16% of respondents engaging in stock market investments, followed by Andhra Pradesh and Telangana at 14.47%, Kerala at 14%, and Tamil Nadu at 12%. This trend signifies a rising awareness of stocks as a means for wealth generation in the region.

"Gold remains the top investment choice, particularly in Tamil Nadu, where 34% of respondents prefer it over other investment tools. However, there is a notable rise in stock market investments, especially in Karnataka, where 16% of respondents are actively investing in stocks. This highlights a growing trend among South Indian investors who are beginning to see the stock market as a viable and lucrative investment avenue. This shift can be attributed to several factors, including increased financial literacy, the accessibility of online trading platforms, a growing awareness of potential returns, and higher disposable incomes, particularly in southern states where the average per capita income is 5.5 times the national average," the survey, conducted by Way2News, stated. 

Recently, the Reserve Bank of India also highlighted that Indian households are increasingly favouring stock markets over traditional banks for their savings. According to Motilal Oswal, there has been a significant surge in Demat accounts, with the number reaching 15 crore within a decade, compared to just 2 crore accounts in 2015 through NSDL. 

The growth in Demat accounts is evident with 3.1 million new accounts being opened monthly. This trend underscores the shift in investment preferences in India towards more dynamic financial instruments such as stocks and mutual funds. While bank deposits still constitute a substantial portion of household financial assets, their share is gradually declining.

“We are witnessing a clear shift towards diversification and dynamic investment strategies among South Indians. This trend reflects growing financial literacy and a desire for higher returns,” said Raju Vanapala, Founder and CEO of Way2News.

Fixed deposits

There has been a discernible decrease in traditional fixed deposits, recurring investments, and insurance selections across various states, signaling a move towards investment avenues that offer potentially greater returns. 

In Andhra Pradesh and Telangana, the adoption rates of fixed deposits and recurring investments are at 12.67%, whereas insurance choices stand at 8.95%. 

Similarly, in Kerala, fixed deposits and recurring investments are at 14%, with insurance preferences at 7%. Meanwhile, in Tamil Nadu, fixed deposits and recurring investments report figures of 13%, alongside insurance selections at 7%. Lastly, Karnataka exhibits fixed deposits and recurring investments at 10%, paired with insurance choices at 9%.

Real estate

Investment preferences in real estate vary significantly by state, reflecting regional differences -  Andhra Pradesh & Telangana (17.04%), Karnataka (14%), Tamil Nadu (12%), and Kerala (8%).

Other tools

Mutual funds are favoured highest in Kerala (17%), Karnataka (13%), Andhra Pradesh & Telangana (9.41%), and Tamil Nadu (7%)

Bonds remain a niche investment option with lower interest levels across all states due to fixed returns

Provident funds (PF) and pension schemes are attracting growing interest, particularly in Kerala (11%), highlighting a focus on long-term financial planning and security.