Do you know that retail participation in the Indian stock market grows every month? As per the SBI’s 2021 report, 44.7 lakhs new accounts of individual investors were opened in two months. Also, during the financial year 2021, about 142 lakh investors opened their accounts to trade in the stock market. If we talk about the individual investor shares in the stock market, it goes over 45%.
Hence, you can see an individual stake in the stock market is rising and increasing financial literacy among individuals. But still, many people are not much aware of this industry and keep asking several questions. This article will discuss the latest number of individual investors in the stock market. We will also look at key reasons why the number is rising every day.
How Many People Invest in The Stock Market in India
According to the latest stats from the National Stock Exchange of India, there are over 1.2 crore active retail investors in the stock market. We have a population of about 138 crores, and from them, about 1.2 crore people are actively investing and trading in the Indian stock market.
You can think very few people in India are financially literate. Therefore, there is less number of active investors in the stock market. But now, the stats are rapidly growing and showing a positive symbol. And to describe the same, we have mentioned some key reasons people invest in the Indian stock market. You can read it and understand the crucial changes with the latest reports.
Reasons Why People Are Investing in Indian Stock Market
1. Declining in Saving Bank Account Interest
Declining in saving bank account interest is one of the primary reasons people are looking for alternatives. Earlier, banks gave about 4% interest on saving bank accounts, but now they have decreased it to 2.5% and even lower. However, some banks also offer 3% interest to their customers. But still, it’s less compared to previous interest rates on saving accounts.
2. FD Interest Rates Are Also Not Satisfactory
You will notice the interest rate in FD accounts has also decreased. Earlier, banks used to provide 7.5% interest, and they even used to have a five years double scheme. But now, these benefits are not available to bank account holders. As banks have decreased the rate of interest on fixed deposits.
And now most banks give 4% to 5% interest on fixed deposits. Even PF, Sukanya Samriddhi Yojana Schemes, has forced people to put their money in the banks. These schemes provide a 6.8% to 7.5% interest rate to their account holders. And when people invest in such schemes, they also look for other good options, such as investing in the stock market, especially in IPOs.
3. Global Liquidity Has Risen
Global liquidity is another reason that has positively impacted investment in the Indian stock market. As per FII inflows of FY 2021, the Indian stock market received $36 billion from investors. Also, this motivated other small investors to come ahead and make an investment decision in the stock market.
4. COVID-19 Has Moved People to The Stock Market
During the pandemic, most people lost their jobs and suffered to meet everyday needs. Most people used to stay home and keep finding stable sources to generate income. As a result, many people found the stock market an excellent resource to invest in and create wealth. So, pandemic time also motivated people to try stock trading and investing in various securities.
5. Easy to Invest Platforms
Earlier, most investment processes used to happen offline, and therefore it was time-consuming and costly for investors. But now, we have various discount broker platforms like Groww, Upstox, and Zerodha. You can open your account and start doing stock trading and investing in the share market.
Many experts say these platforms have also spread financial literacy and motivated people to come and invest in the stock market. Also, creating a stock trading and Demat account has become easy as it requires only a PAN card and other essential documents. Along with this, now most trading processes take place online and use cutting-edge technologies to make it fast.
6. Excellent Source of Income
If investors follow the proper strategy and make correct stock trading decisions. They can make attractive revenue and increase their wealth. Also, various free and paid resources are available that help investors make intelligent trading decisions to make money from stock trading. Nowadays, stock trading is an excellent alternative to generate revenue. Now it’s not only the thing of rich people, but middle-class families are also showing interest in this.
Why Does India Have Less Number of Individual Investors Compared to USA?
In the USA, most people are already investing in the stock market. According to reports, about 14% of USA people have a direct stake in small to large listed companies. Also, about 44% of US residents have an indirect share in the stock market. Most of them either invest in retirement funds or other similar securities to secure their life. It shows their people are aware of financial literacy and stay ready to take the risk.
On the other hand, most people hesitate before investing in the share market in India. There can be several reasons, such as lack of knowledge, stock market scams, and lack of proper funds. However, in recent years, the number of Indian investors in the Indian stock market has been increasing quickly. And currently, there are over 1.2 crore people already in this industry and doing stock trading.
So, today you learned about how many people invest in the Indian stock market. We also discussed why the number of individual investors increased in the Indian stock market. I hope your doubts are clear now and have found this article helpful. If you still have any doubt about the same thing, you can comment below. Our team will surely give you a practical and relevant response to your query.
Moreover, you can also check out the other articles that are posted. Because by reading these articles you will surely get significant knowledge about the Indian stock market. And as a result, you will have more knowledge and the ability to find the best investment opportunities.