SIP most preferred investment route among Millennials: Survey

These were the findings of a survey conducted by CAShe, an AI-powered financial wellness platform. According to ‘The Financially Independent Millennials’ Report 2022, more than 43% of the respondents said that they have started making financial decisions independently during 21-25 years. The survey was conducted among over 20,000 customers on the Cash platform as well as its newly acquired wealth management platform, Sqrrl.

With millennials increasingly concerned about money matters after the pandemic, the study indicated that the vast majority (41%) of respondents set aside 10-20% of their annual income as savings. The data showed an increasing trend of millennials adopting responsible financial behavior at a younger age. However, to the contrary it has also been said that a large proportion of millennials (about 30%) set aside less than 10% of their annual income as savings which raises concerns regarding the group committed to regular savings .

The report also highlights that Millennials are rapidly evolving into ‘forward thinkers’. While Boomers are either in or close to retirement, Millennials have plenty of time to plan and save. But there is a growing awareness among millennials to start saving early for their post-retirement lives. More than 34% of the respondents said that they were highly aware of the matter and have already started saving. About 48 per cent of the respondents said they are yet to plan for retirement, but a large proportion (23 per cent) are aiming to start retirement planning early.

Millennials are increasingly turning to digital options and prefer to make their own investments. Digital gold topped the charts in terms of preference for new-age alternative asset classes, with over 33% of respondents voting. This reflects the millennial inclination towards gold as a profitable instrument offering a stable asset class and long-term gains. Digital Gold offers the digital native cohort the best of both worlds – the owner of physical gold with the benefits of new-age technology – that eliminates the hassle of physical oversight and responsibility. It was followed by cryptocurrency (29%), fractional ownership (17%), P2P lending (12%), and US equity investing (9%).

With the growing awareness of tax saving modes and avenues, Millennials are joining the group of savvy investors who look at both future returns and current tax savings. According to the survey, more than 56 per cent invested in tax-saving plans, while the rest were considered unknown.

According to the report, medical emergencies, accounting for 36 percent, were the top reason for millennials seeking loans in 2022. This was followed by unplanned expenditure and education accounting at 19% and 14%, respectively.

The report also pointed out that banks continue to dominate as the most preferred go-to lending avenue among millennials. The survey highlighted that 41% of millennials availed loans from banks while 35% of borrowers opted for digital lending platforms. Owing to relaxed eligibility criteria, bias-free processes and attractive interest rates, lending platforms are fast gaining popularity among Millennials.

V Raman Kumar, Founder President, Cashe said, “Millennials – the first generation known as digital natives, have made technology an integral part of their daily lives and hence wealth management is no exception in the country. As the U.S.’s largest workforce, Millennials are driving a paradigm shift in the wealth-management industry…CASHe is widely associated with the Indian millennial conglomerate and has been an integral part of their aspirational journey. With the acquisition of Sqrrl. Together, we aim to leverage our deep understanding and expertise with the cohort to offer customized financial planning and investment strategies tailored to this unique group and empower them to embark on a responsible wealth management journey.”

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