A COMPARATIVE STUDY OF INVESTMENT AVENUES: MUTUAL FUNDS VS FIXED DEPOSITS AMONG INDIAN MILLENNIALS AND GEN Z

Abstract

This research explores the comparative investment preferences of Indian Millennials and Generation Z (aged approximately 20–40) between two major avenues: Mutual Funds and Fixed Deposits (FDs). With growing financial awareness, higher disposable incomes, and greater exposure to digital platforms, young Indian investors are actively seeking diverse options for wealth creation. Despite broader exposure, many still lack a complete understanding of the trade-offs involving risk, returns, liquidity, and tax implications between these investment products. The study aims to analyze the key factors influencing investment behavior among these generations — particularly their tolerance for risk, expectations of returns, preference for liquidity, and need for capital safety. It also evaluates perceptions and actual performance comparisons between Mutual Funds and Fixed Deposits. Primary data is collected through a structured questionnaire targeted at 100–150 urban Indian Millennials and Gen Z individuals, supplemented with secondary data from RBI reports, AMFI publications, and leading investment platforms like Groww and Zerodha. Quantitative analysis through Excel and SPSS will uncover patterns, correlations, and differences between demographic subgroups. The research answers critical questions about investment preferences, factors driving decision-making, the role of financial awareness, and the influence of income and education levels. Hypothesis testing will determine if significant differences exist in preferences for Mutual Funds over Fixed Deposits. The outcomes will benefit financial advisors, fintech platforms, and policymakers in designing more targeted investment products and financial literacy programs tailored to the evolving needs of young Indian investors. While the research is limited by sample size and possible respondent bias, it provides valuable insights into the changing investment landscape shaped by Millennials and Gen Z.