Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
A STUDY OF THE INVESTMENT PATTERN OF BANK
EMPLOYEES
K.V.Ramanathan, Dr.K.S.Meenakshisundaram
Ph.D Research Scholar, SCSVMV University, Kancheepuram, India
Professor & Director, CAA, Great Lakes Institute of Management, Chennai, India
ABSTRACT
Financial Investments are the commitments which are
made with any financial and non-financial
instruments hoping for a better and profitable return
in the future for a specific objective. The financial
and non-financial products act as an avenue for
investment and provide the security to the respondents
based on the risk-return profile of the products. Out of
the available choices for investment, one must select
the most appropriate and the best one. The person
investing should be aware of all the investment
choices and how these can be chosen for the purpose
of attaining the objective. In the present research an
attempt to analyse the significance of selected
demographic factors such as age, gender, marital
status, educational qualification, occupation and
income level of the respondents working in a bank
towards their investment preference on products such
as Real Estate, Gold / Jewellery, Bank deposit,
Government Bonds, Share market, Commodity
market, Mutual Fund, Life Insurance policies and
Post office savings. Further, also to find out the
significance of demographic factors of the
respondents and elements of investment decision like
period of investment and information source. The data
were collected through a structured questionnaire and
analysed using percentage, chi-square test and Karl
Pearson’s correlation coefficient. The results of
research indicate that majority of the respondents are
saving money for their safety and the results of the
study would be of a guide for personal finance and
investment.
KEYWORDS: Investment, demographic factors,
Investment avenues, Preferred Investment, Risk &
Return, Income, Bank employees.
INTRODUCTION
Investment refers to deployment of surplus funds or
savings with an aim of some positive rate of return in
future and in general it is from the savings with hope
of getting better profitable benefits in future. The
spectrum for investment is vast today, which
comprises of financial and non- financial products.
Financial products comprises of bank deposits, share
market, commodity market, insurance, post office
156
schemes and other bonds. Non-financial products
comprises of real estate and gold / Jewellery. Some of
the investment instruments are highly risky while few
others are almost risk free. Similarly some of the
instruments are marketable and liquid while others are
non-marketable. The selection of investment would
depend on the specific need, rate of return and risk
preference of the respondents and the degree of risk
and return varies for different investment avenues.
The aim of Investment is to multiply the money at
various rates depending upon the term of the
investment.A thorough understanding of core
concepts and the available options will help the
investor to plan for maximum returns without risk.
This study helps in analyzing the saving pattern and
investment preferences of the bank employees
towards various products based on demographic
factors.
REVIEW OF LITERATURE
R Sreepriya& P Gurusamy (2013) studied the
investment pattern of salaries people in the district of
Coimbatore with a sample of 150 respondents and
concluded that majority of the respondents are
educated up to college level and they are aware of the
investment avenues. It was also concluded that most
of the respondents prefers long term investment and
bank deposits was the most preferred investment.
They have not faced any problem on their
investments. The study also emphasized that the there
was a significant relationship between education
qualification and fulfillment level of the respondents.
B.N.Panda&J.K.Panda (2013) carried out a
comparative study on the relevance of demographic
factors in investment decisions with respondents from
education sector. A convenient sample of 175
respondents from Bhubaneshwar was selected. The
study revealed that demographic variable such as age,
gender; education and occupation have no significant
relations with the period of investments made by the
investor. It also disclosed that there is significant
relationship exist between the demographic factors
such as gender, education, occupation, annual income
and savings with the sources of awareness with the
analysis of investment avenues. Investor’s choice was
more or less equally distributed between physical
 Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
assets and financial assets. It also conveyed that no
significant relation exist with the demographic
variables of age and family size.
VarshaVirani (ISSN 2277-1166, Volume No.2 Issue
No.4) undertook a study on saving and investment
pattern of school teacher in Rajkot city, Gujarat with a
sample of 100 school teachers and concluded that
most of the teachers prefer Bank Fixed deposit and
government securities as their investment option.
High interest rates as well as safety have been
considered as the main criteria for investment. It also
revealed that high rate of return and tax benefit has
influenced the investment decision of the respondents.
There was a lack of awareness about equity and
mutual fund as avenues of investment. It also revealed
that most of the teachers are saving their money for
children’s education, marriage and to fulfill the other
goals of life.
PuneetBhushanSood&YajuluMeduryanalysed the
investment preferences of salaried individuals towards
financial products with a sample of 200 respondents
from Delhi, Gurgaon and Noida. The analysis
revealed that respondents earning between Rs.10 and
Rs.15 lakhs prefer in avenues where more returns are
offered and also more risky, whereas respondents
whose earnings are less than Rs.2 Lacs prefer sage
investment instruments. They also concluded that
male respondents preferred life insurance and mutual
funds whereas female respondents preferred market
investments and recurring deposits. Government
employees prefer safe investment whereas Private
employees prefer to take more risky investments
which produce more returns. It was also proved that
investment preferences are not affected by age,
gender, income, marital status and employment status
of the respondents.
SumanChakraborty&Sabat Kumar Digalhas
carried out a study on saving and investment
behaviour of individual households in Orissa with a
sample of 200 respondents who has invested in
mutual fund schemes and whose yearly income is less
than Rs.10 lacs was considered. The study revealed
that there is a relationship between the saving
objectives with the income level, age and occupation
of the small and medium household respondents.
Fixed deposits and investment in real estates was the
popular savings of the male respondents while female
respondents prefer real estate and bullion. It also
revealed that government sponsored small saving
schemes has got a better acceptance among both the
male and female respondents. Salaried and self-
employed would save for their retirement as
157
compared to entrepreneur, who prefers to keep more
liquid funds for future contingencies.
Brahma Bhatt, P.S.RaghuKumari& Sharmira
Malekar (2012) has conducted a study on the investor
behaviour on investment avenues in Mumbai with a
sample of 100 respondents. The study revealed that
people invest in stock market as compared to any
other avenues, even though they face huge losses. It
was also evident from the study that investor prefers
savings and safety but at the same time they want
higher interest at low risk in shorter span. They study
also concluded that most of the respondents possess
higher educational qualification and opt for two or
more sources of information to make investment
decision. It also stated that most of the respondents
discuss with their family and friend before making
investment and the respondents decisions are based on
their own initiative. Female respondents are attracted
towards gold than any other avenues.
UjwalaBairagi&CharuRastogi (2013) has carried
out an empirical study on the saving pattern and
investment preferences of individual household in the
city of Pune with a sample of 526 respondents. The
study concluded that majority of the respondents had
a high degree of awareness towards bank deposits and
real estates as an investment avenues. Gender has no
effect or influence on the level of awareness. Salaried
employees had better awareness of the investment
avenues than any other occupational categories.
Safety of the investment and income were the main
objectives of the respondents followed by liquidity
and marketability, capital appreciation and tax
benefits. It was also concluded that most of the
respondents are able to save substantially from their
annual income and are in a position to make
investment.
OBJECTIVES OF THE STUDY
From the above literature review, it may be seen that
the studies in respect of Investment pattern with
reference to bank employees were not made earlier.
Hence an attempt has been made in this to study and
analyze the investment pattern of the banking
professionals with the following objectives:
1. To study the profile of the respondents.
2. To study the sources of motivation for investment
3. To find out the relationship between the Income
and Investment.
4. To analyse the investment pattern of bank
employees.
 Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307

5. To find out the association between income of the Variable No of %

respondents and investment pattern of the employees
respondents. Gender Male 129 81
Female 31 19
Age 21-30 19 12
31-40 76 48
RESEARCH METHODOLOGY
41-50 50 31
It is a known and established fact that, any research 51-60 15 9
has to be validated based on the systematic collection Marital Single 20 12
and analyzing the data. For this study survey method Status Married 140 88
was adopted to collect the primary information from Educational Graduate 52 33
the employees using a well-structured pre tested Qualification Post Graduate 64 40
questionnaire. The primary data was collected from Professional 44 27
130 respondents employed in a bank in Chennai. The Grade Junior
secondary data was collected from internet websites, Management 27 17
journals, newspapers, magazines, etc. The collected Middle
data were analyzed with Percentage, Cross tabulation Management 120 75
and percentage difference analysis, Chi-square Test Senior
and Karl Pearson’s Correlation coefficient. Management 13 8
Family Nuclear 99 62
Hypothesis Joint 61 38
Ho: There is no significant relationship between the
Income of the respondents and investment made by Distribution of Income, Investment, Objective,
the respondents. Source of motivation & time horizon preferred by
the respondents.
Ho: There is no significant relationship between
demographic factors of the respondents and the basis Preference towards investment in Table - 2 indicates
of Investment made by the respondents. that more than 40 % of the respondents found to earn
Rs.5-10 Lacs and 21% were found to earn between
Ho: There is no significant association between
Rs.10-15 Lakhs per annum. Further, 52% of the
income category and basis of investment of the
respondents invest up to Rs.2.5 Lacs annually and
respondents. 29% of the respondents invest between Rs.2.5 and
Rs.5 Lacs category per annum. Out of the total
Ho: There is no significant association between
respondents, 32% each of the respondents prefers to
investment category and basis of investment of the
invest in 1-2 year and 26% prefer to invest in 2-3 year
respondents.
category as time horizon and 22 % prefers long term
Demographic profile of the respondents investment of more than 6 years. 46% of the
respondents have Tax Planning as their objective and
Table-1, gives the summary of the demographic 16% and 15% of the respondents have invested with
characteristics of the respondents. an objective of Asset creation and Habit respectively.
For 31% of the respondents, friends and relatives
Analyzing the demographic variables in the Table-1, were the source of motivation and financial news and
it may be observed that 81% of the respondents are Colleagues take the second and third position with
male and the remaining female. 48% of the 26% and 18% respectively.
respondents fall in the category of 31-40 years and
31% of the respondents are in 41-50 years category. Table 2 Distribution of Income, Investment,
Around 88% of the respondents are married. Out of Objective, Source of Motivation & Time Horizon
the total respondents, 40% are post graduates and 33 Preferred By the Respondents
% of the respondents and professionally qualified.
More than 75% of the respondents are from the Variable No of %
middle management and 62% of the respondents lived employees
in nuclear family set up. Income < Rs.5L 41 26
Table 1 - Demographic profile of the respondents Rs.5-10 L 71 44

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 Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307

Variable No of % Relationship between the variable was found by using

employees Pearson correlation coefficient method. Positive
correlation exists between the variables Income and
Rs.10-15 L 33 21
Investment. There is strong relationship between the
> Rs.15 L 15 9 variables.
Investment < Rs.2.5 L 84 52
Relationship between Income and Investment
Rs.2.5-5 L 46 29
Rs.5-7.5 L 14 9 Table 3 - Association between Income and
> Rs.7.5 L 16 10 Investment
Objective Habit 24 15

Rs.2.5Lacs
Family Income 15 9

Rs.5-7.5

>Rs.7.5
Rs.2.5-
5Lacs

Total
Lacs

Lacs
<
Tax Plan 73 46
Extra
8 5
Income <Rs.5L 32 6 1 2 41
Asset Creation 25 16 5-10L 43 19 4 5 71
Future 10-15
15 9 8 16 5 4 33
Requirement
15L 1 5 4 5 15
Motivation Self 3 2
Source Friends & 31 Grand
Relatives 50 Total 84 46 14 16 160
Colleagues 28 18
Financial 26 From Table-3 above, it is evident that maximum
News 41 respondents have invested less than Rs.2.5 lacs per
Market 6 annum and least number of respondents under Rs.5 –
Reference 10 Rs.7.5 Lacs the category.
Opinion 1
On applying chi-square test for the above data, it
Leader 2 2
could be seen that calculat is 44.232
Family 16 where degree of freedom is 9 as against the tabulated
Members 26 2
of 16.919 at 95% of confidence level.
Time < 1 year 7 4 Since the calculated value is more than the tabulated
2
Horizon 1-2 years 51 32 we conclude that Ho is rejected. Hence
there is significant relationship between Income
2-3 years 41 26 and Investment.
3-6 Years 26 16
> 6 years 35 22 Association between demographic variables and
basis of investment are made by the Investors.
Pearson correlation of coefficient between Income Table-4 Observed details between demographic
and Investment variables and basis of investment
Following are the details:
Investment

Creation
Basis of

Market

X – Income of the respondents & Y – Investment of

Invest
Value

Value
Asset

Total
ROI

the respondents

X = 1455.31; X2 = 20984.50; N = 160

Age 21-30 1 6 11 1 19
Y = 543.63; Y2 = 4972.98; XY = 8345.08
31-40 7 32 29 8 76
r = NXY- (X)(Y)/ X2- (X)2] Y2-
(Y)2] 41-50 6 17 24 3 50
r = 0.69097 51-60 1 8 4 2 15

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 Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307

Demographic Chi- Dof Tab Sig or

Investment

Creation
square
Basis of

Market
Profile Value not

Invest
Value

Value
Asset

Total
ROI
Value Sig
Qual Sig
Total 15 63 68 14 160 Income 23.062 9 16.919 Sig
Gender Male 15 50 51 13 129 Investment 17.159 9 16.919 Sig
Female 0 13 17 1 31
Total 15 63 68 14 160 Table- 5 shows that, chi-square test at 5 % level of
Marital Single 1 8 10 1 20 significance has been conducted using the data
Status Married 14 55 58 13 140 collected to verify the significant relationship between
demographic factors and the basis of investment of
Total 15 63 68 14 160 the respondents. The results of the analysis elucidates
Edu Grad 4 14 29 5 52 that the variable like Income and Investment are
Qual PG 4 30 24 6 64 significantly associated with the basis of investment,
whereas variables like age, gender, marital status and
Prof 7 19 15 3 44 educational qualification is not significantly
Total 15 63 68 14 160 associated with the basis of investment.
Income < Rs.5L 2 11 28 0 41
SALIENT FINDINGS
Rs.5-10L 5 30 26 10 71
Rs.10- 1. Out of the total respondents, 81% of the
5 17 9 2 33 respondents are male and 48% of the respondents
15L
were found to be in the category of 31-40 years of
> Rs.15L 3 5 5 2 15 age.
Total 15 63 68 14 160
2. Out of the respondents, 88% of the respondents
Investmen < Rs.2.5L 5 35 39 5 84
t
are married and 75% of the respondents are from
Rs.2.5-5L 3 18 19 6 46 the middle management.
Rs.5-7.5L 2 4 5 3 14
3. 45% of the respondents are in the income group
> Rs.7.5L 5 6 5 0 16 between Rs.5 – 10 Lacs and 59% of the
Total 15 63 68 14 160 respondents invest less than Rs.2.5 Lacs per
annum.

From Table – 4 it is evident that most of the investors 4. Tax planning is the main objective of the
select their investment based on the Return on respondents and for them it was found that their
Investment and Asset creation has taken the second friends and relatives are the main source of
position. motivation (31%).

Table -5 Relationship between demographic 5. Positive correlation exists between the variables
factors and basis of investment Income and Investment. There is strong
relationship between the variables.
Demographic Chi- Dof Tab Sig or
square 6. It is proved by chi-square test that there is
Profile Value not significant relationship exist between income and
Value Sig investment of the respondents.
Age 6.344 9 16.919 Not
Sig 7. It is also found by chi-square test that the
variables like Income and Investment are
Gender 6.387 3 7.815 Not
significantly associated with the basis of
Sig
investment
Marital 1.139 3 7.815 Not
Status Sig 8. Demographic variables like age, gender, marital
status and educational qualification are not
Edu 9.475 6 12.592 Not
160
 Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
significantly associated with the basis of
investment.
9. It is found that Income category and investment
category are significantly associated with the
basis of investment.
10. Based on income category, 68.3% of the
respondents with less than Rs.5 Lacs
income,investbased on the Return on Income.
11. Based on Income category, 42.3% of the
respondents with Rs.5-10 Lacs income, Asset
creation were the preferred basis for investment.
12. Based on the Investment category, respondents
with more than Rs.7.5 lacs preferredasset creation
as their basis of investment and rest all categories
prefer Return on Investment as their basis of
investment.
CONCLUSION
This research study was conducted to understand the
basis of selection of investment of bank employees
and also to know their level of awareness towards
selection basis for investments. Income and
Investment are positively correlated and there is
strong relationship between income and investment.
The study also revealed that the respondents are aware
about the selection basis of investment and would
prefer investment where return on investment is good
and also good investment which help in asset creation
for their future. The study also helps to obtain the
general views of the investor perception over various
investment products. Most of the respondents invest
in tax saving investments such as life insurance
products. It is also suggested that awareness program
should have to be conducted to educate the
respondents towards capital market investment. By
conducting these awareness programs, the climate of
investment would become very congenial and
attractive. This research will also guide the investment
firms to identify the right respondents and to offer
their investment instruments and decide their policies
accordingly.
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