Date:15/11/2007 URL: http://www.thehindu.com/2007/11/15/stories/2007111561771900.htm

Business

Majority of households prefer bank deposits

Special Correspondent

KOCHI: Despite 125 years of capital market experience, 83.9 per cent of households in India still invest only in the safe and sound bank deposits, Mahesh Kumar, senior executive of the National Stock Exchange has said.

Addressing a Business Line Club programme on the SCMS campus in Kochi, he said that only 7.2 per cent of the households were investing in the capital market.

The programme was conducted in association with Geojit Financial Services Limited. Radical transformations had occurred in India’s capital market in the meanwhile.

Two decades ago, investment in equities was more for the dividend returns that they promised and then only did the incremental value of the share came in.

Annual return of 20-30 per cent through dividend was considered lucrative enough for investing in shares with a face value of Rs.10, as against investments in bank deposits which offered far lower returns.