V3I6P79

Financial Literacy and Investment Decisions Among Young Investors in India: A Secondary Data Analysis

E V C M Sastry^1*

Abstract

Financial literacy has emerged as a crucial determinant of investment behaviour in the rapidly evolving financial landscape of India. The increasing accessibility of financial products, digital investment platforms, and government initiatives promoting financial inclusion have significantly influenced the participation of young investors in financial markets. This study examines the relationship between financial literacy and investment decisions among young investors in India using secondary data obtained from reports published by the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), National Centre for Financial Education (NCFE), Association of Mutual Funds in India (AMFI), and relevant academic literature.

The study explores how financial knowledge affects investment choices, risk tolerance, portfolio diversification, and long-term wealth creation among young individuals. The findings reveal that higher levels of financial literacy positively influence informed investment decisions, encourage participation in diversified financial instruments, and reduce susceptibility to financial fraud and impulsive investment behaviours. The study further identifies challenges such as inadequate financial education, behavioural biases, and limited awareness regarding advanced financial products.

The paper concludes that strengthening financial literacy through educational institutions, government initiatives, and digital learning platforms can significantly enhance investment competence among young investors. The findings contribute to the growing body of literature on financial behaviours and offer practical implications for policymakers, educators, and financial service providers.

Keywords:

Financial Literacy, Investment Decisions, Young Investors, Financial Awareness, Investment Behaviour, India