What Kind of Saving Instruments Do Women Prefer?

We come across numerous savings and investment instruments in the market. Every individual has his/her own preference and choice when it comes to savings and investment. This choice mostly depends on the level of risk one is ready for and the profit percentage one is looking at. 

Men are known to prefer those that can earn high profit irrespective of the associated risk. They actively discuss and take part in analysing the market and placing their funds in those instruments that profit them the best. What do women prefer when it comes to savings?

The Era of Risk-ready Women

Traditionally, women were known to be very cautious when dealing with money. They preferred low-risk saving instruments such as fixed deposits, PPF, or even let the money stay in the savings account. They did not want to place their money in instruments with high-risk profiles even if they offered high profits. Mostly, they chose the tools that offered easy accessibility and liquidity features.

On the other hand, women are getting more financially aware and the traditional thought process has been slowly fading. They are trying to catch up with the latest trends and investing in mutual funds. Women are preparing themselves to bear some risk to understand how that risk can benefit them. They are ready to design their own financial goals and to invest accordingly.

Also Read: Benefits of mutual funds savings against chit funds

Typical Financial Goals of Women

Usually, women have the following financial goals:

• Emergency Funds: Women tend to stay prepared for emergencies such as loss of a job, health disorders, and financial crisis. Women know that these emergencies cannot be predicted and quickly set aside money for such situations.
• Retirement Corpus: In recent times, more and more women prefer leading an independent life irrespective of their age. They would like to contribute to their family even after retirement; they do not wish to plead anyone to help with their expenses. Therefore, building a retirement corpus is one of the most common financial goals of women.
• Children’s Education: Alongside the increasing costs, educational expenses have also risen over time. Higher education in India has seen a sharp rise in the current decade; enrolling for higher education in a university abroad is no different. Women tend to predict the possible choice their children could make in the future, and begin saving up for a convenient career of their children.
• Vacation: In addition to prioritising their family, women have also started prioritising themselves. They have come to know that peace of mind is necessary for them to take care of everything on their shoulder. Hence, they have been putting funds for their vacation. It is common to hear about women taking solo trips to rejuvenate themselves.

Investment Ideas

Apart from the traditional savings and investments ideas, modern women prefer investing their hard-earned money in mutual funds. This is a way of earning higher returns as compared to any other traditional means. Funds that are easily accessible in addition to fetching better returns are listed below:

• Equity Funds (except for ELSS)
• Debt Funds
• Hybrid Funds

With the growing popularity of mutual funds, and the ability to make their own financial planning and decisions, many women have shifted their gaze from FDs to mutual funds. The shift in the choice is to earn higher returns with time with the compounding calculations. What is your preferred way of savings and wealth management?

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in