Indians are wise savers but poor investors: Survey

While salaried class households, which constitute only 18 percent of the total households in the country "accounted for greatest proportion of savings" and are the cream of urban India, agriculturists with land are the richest in rural areas. Wage laborers are the poorest anywhere, comprising 62 percent of the lowest-income households.

"The highest savings (in terms of per household) are in the 56-65 age group where savings are Rs.21,196 per household, or 25 percent of the annual income," the study notes.

The two main factors responsible for higher savings with growing age, according to the survey, are motivation to save and the need to meet old-age requirements.

The survey also suggests a direct link between the education and savings by pointing out that households headed by graduates had highest level of savings in both absolute terms and as a percentage of income.

The survey notes that households managed by persons in 56-65 age group, kept bulk (57 percent) of their savings in liquid assets, though they also invested the surplus funds in shares and debentures.

Interestingly, the survey reveals that the households headed by persons in the age group of 26-35 years, paid more insurance premium than their senior counterparts.

Households headed by graduates spent more on buying insurance around 10.2 percent, while merely 3.5 percent preferred investing in shares or debentures, the survey says.

"Indians prefer to save money in 'in-house savings' rather than 'in banks or investment.' They save money for emergency and any mishappening," the study notes.

The reason behind this is because unlike in the western and developed countries, which have the system of social security that prevents the poor households from starvation and ill-social society by giving social protection and economic support, "there is no social security in the country (India) for the citizens of the nation," the study explained.

The sample size included 63,016 households, equally divided between rural and urban areas.