Investment By Women – Thoughts On International Women’s Day
The power of women and potential of investment by women in India are under utilised. Among 130 countries, India ranks 120 in female labour force participation rate. Contribution of women towards GDP is just 17%, less than half of the global average. India can increase the GDP growth by minimum 1.5 percent if at least 50 percent of women join the workforce. As per estimates, in 2012 only 27 percent of Indian adult women had a job. India is growing fast and the progress could be higher if greater number of women is employed. World over it is proved that women’s economic empowerment has a direct bearing on reduction of poverty. Savings and investment by women have helped many families to tide over temporary financial difficulties. International Women’s Day (IWD) on March 8 is an ideal occasion to analyze the investment pattern of women.
Investment by women – Preferences are savings bank accounts and bank deposits
In India, the percentage of working women is less. However, traditionally they have been believed as better savers and investors compared to men. They save from the amount entrusted to them by husbands for meeting day to day expenses and often women are keepers of contingent funds in a family. Normal tendency of Indian women is to keep the amount in cash. However, expansion of branch network and schemes like Jan Dhan accounts have encouraged more women to open accounts with banks and migrate to formal system of banking. Now, many banks offer accounts designed specifically for women. HDFC Bank, ICICI bank and RBL bank have tailor made accounts for women. Mahilamitra account is a special SB account scheme launched by Federal bank for women. These accounts carry attractive features like insurance coverage, free ATM cards, freedom from minimum balance stipulation, concessions in processing fee and interest applicable to loans etc.
Investment by women- Migration to other investment products
Bank accounts and bank deposits were considered as the best suited option by women who had saving and income. However, with the progress in telecommunication field and easy access to internet, investment habits of women too have undergone rapid changes. These developments enlarged her awareness and they are ready to take calculated risks. Women now invest heavily in mutual funds, debt funds, ELSS, NPS, insurance etc. Urban women invest in equities too.
Women normally start investment with specific financial goal. Requirements of children are their major concerns and they invest mainly for higher education and marriage of children. House construction also gains importance. Mutual funds have become the most sought after investment avenue for women because of the long tenure, good return and easy liquidity.
Investment by women – How it differs from investment by men?
Men are highly optimistic and confident in the performance of investment. According to studies, their over confidence often leads to over estimation of performance and higher losses. Women investors normally follow a special investment pattern. They start with a small investment, experience, gain confidence and shift to investment on regular basis. No doubt, these step by step approaches make them better savers and investors. On the other hand, less confidence and the more pessimistic outlook sometimes lead to missed opportunities.
Men exhibit more risk taking character. Women, on the other hand, are more conservatives and pay more attention to capital preservation. For them, money in hand is more worth than money in future. They follow cautious aggressiveness in investment and take calculated risk compared to momentary decision by men. Genuine women investors take investment decision after analyzing various aspects like tenure, return, long term capital gain, short term capital gain and other tax implications. Why Should An Earning Woman Invest?
