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A look at women’s evolving relationship with money

January 12, 2024

Table of Content

1.The evolving financial ecosystem in households

2.Are financial choices changing for women?

3.The popular choice of investment by women

4.ULIP, a strong choice for women?

In this policy, the investment risks in the investment portfolio is borne by the policyholder.

It’s still a pretty grim picture when it comes to women taking charge of their financial security in India. Recent surveys conclude that 51% of Indian women are on their investment journey, out of which a mere 27% make decisions on their own. But indeed, there’s a ray of hope as well. Trends reveal that, compared to the past, more and more women are now treading the financial path and their perspectives towards investment are changing gradually.

The evolving financial ecosystem in households

For ages, investment strategies and decisions in Indian households have been majorly governed by men. Even though men still dominate this area, the ratios are definitely changing. As more women are now financially independent, they are increasingly realising the need to invest, not just for tax savings but for etching a stable financial path. According to the Economic Survey 2023, moving away from the conventional preference towards savings, women in India are now looking at investment as a crucial step towards a secured financial future. So, what lies behind this evolving financial ecosystem in households? While higher income is surely a reason, it’s the digital freedom through smartphones that has contributed a major shift. The easy access to digital resources has helped women shape their knowledge and consequently, their investment decisions.

Are financial choices changing for women?

Earlier, even if women made financial decisions, these were mostly restricted to savings. Financial independence has shifted the focus towards investment and naturally financial choices by women are changing too. Indian women are now increasingly getting comfortable with market-linked investments in search of higher returns, compared to the secured, low-return ones. Recent years have witnessed a rapid rise of women investors and a jump in equity investment by women from 16% to 24% in just two years.

The popular choice of investment by women

Gone are the days of regular savings accounts, recurring deposits or NSCs which women used to secure their savings. Surveys claim that Indian women these days are actively investing in mutual funds, stocks, fixed deposits and even digital assets, moving away from traditional savings avenues and gold purchases.

ULIP, a strong choice for women?

As the willingness to take risks is showing an upward curve for Indian women in recent times, high-risk, high-gain financial instruments are increasingly becoming a preferred investment choice for them. However, to avoid losses, investing in a portfolio with a combination of risky and risk-free funds can be a wiser bet. Alongside, the growing uncertainties of life, it is crucial to secure the child’s or the family’s future too, which is now a responsibility of the financially independent women as well.

Here’s where the Unit Linked Insurance Plan (ULIP) can be considered a strong choice for women investors. In a combination of life insurance and an investment plan, a part of the premium in these policies forms the life cover, while the rest is invested in a portfolio depending on the risk appetite. In turn, the investor can choose a portfolio of only equities, only debt funds or a mix of both depending on how much risk she is willing to take.

Conclusion

The tilt shift towards investment from savings is indeed alluring. Women’s evolving relationship with money and the growing percentage of female investors is an empowering factor. But of course, before you take the plunge to invest, remember to analyse your needs, calculate your budget and get clarity on what investment opportunities would be profitable for you. Who said men handle finance better?

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Source-

https://www.livemint.com/news/india/only-27-of-women-take-their-own-financial-decisions-study-11678160654342.html

ARN - ED/12/23/6959

Francis Rodrigues

Written By:

Vishal Subharwal

Reviewed By:

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The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year

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