INTRODUCTIONIndia is a developing country where, there has been a consistent increase in the national saving rate after the independence period, though with considerable fluctuations from year to year. In international standpoint of view, India has had a high saving rate compared to other developing countries, except those in East Asia. To study on rural savings in India need to look into four aspects namely the determinants of savings, the composition of savings, the methods of measuring savings, and the pattern of saving. Saving is an important variable for every country to be studied for the economic growth and development of any country. Saving is an important macroeconomic variable to be studied under the purview of the economic arena on an individual as well as household basis. According to classical economists like Adam Smith, David Ricardo and J.S.Mill, saving is an important determinant of economic growth. Saving components can be based on an individual or on household basis which proves to be the well being. As for an individual saving becomes the cushion for the futures intercourse of the unforeseen and upcoming as well as the uncertain circumstances of life. Saving is the part of the income earned by the individuals. For the higher economic growth for the country, marginal propensity to save should be higher but it helps to the multiplier process. The determinants and patterns of saving differ from rural to urban region. In rural areas, the marginal propensity to consume is more rather than the marginal propensity to save which seems to be vice-versa in urban areas where the marginal propensity to save is more than that of the marginal propensity to consume. According to Lewis (1954), the central problem in the theory of economic development is to understand the process by which a community which was previously saving and investing four or five percent of its national income changes into an economy where voluntary saving is running at about twelve to fifteen percent or more of the national income. According to Rao (1980) saving constitutes the basis for capital formation, and capital formation constitutes a major determinant of economic growth. In the developed countries, the income is generated at a higher rate which encourages people to have more savings which opines to more 2 investment leading to more capital formation. But in a country like India, the income standard is almost uncertain and leads to more consumption rather than saving. On average East Asia saves more than 30 percent of gross national disposable income while Sub-Saharan Africa saves less than 15 percent. Regional differences have been rising: over the past three decades saving rates have doubled in East Asia and stagnated in Sub-Saharan Africa and in Latin America and the Caribbean. By a hike in aggregate saving, the social value of saving can exceed its private value in many developing countries, mainly in the poorer countries with India to be one of them. In India, as in many developing countries, most households are poor and do not save. Here, there is a requirement of mobilization of rural saving for financial growth. Aggregate saving in any economy depends on a number of determinants. In the Indian economy, the household sector contributes a lion's share of the total saving which needs to be stepped up.CONCEPT OF SAVINGS Savings means the act of refraining from spending ones income on consumption. The part of the income, which is unspent, is called savings. From the economists perspective people allocate disposable income between consumption and savings and at various levels of income, there will be corresponding level of consumption and savings. According to classical definition, saving is income minus consumption and is residual in character. Savings can also be defined as stock, wherein savings stands for change in wealth over a period of time. In this sense it is regarded as the sacrifice in the present consumption for the future. Thus, saving is an activity that involves both pain of foregoing consumption and pleasure at a particular moment in time for an anticipated future.CONCEPT OF INVESTMENTPersonal disposable income of the household is divided between consumption and savings. Savings may be idle or active. Savings becomes active, when it is canalized into return bearing avenues. The act of canalizing savings into return bearing avenues is investment. In this sense, investment refers to the increase in real capital, which leads to the generation of income. It is the addition to the existing stock of capital assets and leads to capital formation. Investment is a wider concept, and household investment reflects the microform of it. Household investment mainly, refers to canalising household savings into return giving options. Here, decisions are very much based on risks involved and risk- bearing capacity of the investors. Every investment is exposed to one or another type of risk. There are five major risks in investment, which may be present in varying degrees, in different sorts of investment: non- payment risk, business risk, inflation risk, political risk, and social risk. Therefore, an investor, while investing money would try to satisfy the three objectives- safety, profitability, and liquidity.Apart from risk and return other factors that influence investment decision are: marketability, initial investment, tax benefit, loan facility, institution, past experience, age and needs, social conditions, and liquidity. House hold investment may be in the form financial investment and physical or real investment. Financial investment comprises deposits in banks, shares, debentures, securities in companies, contributions to provident fund/public provident fund, contributions to chit funds, and insurance. While physical investments include land, buildings, vehicles and stock of raw materials.VARIABLES INFLUENCING SAVING BEHAVIOURSaving behaviour is influenced by several factors, important among them are: income, wealth, education, employment status, stages in life cycle, dependency ratio, fiscal policy, pension, insurance and banking infrastructure. INCOME: It is considered as the most important explanatory variable of the household savings. The influence of various concepts of income such as absolute income, permanent income, relative income, transitory income (life cycle income), on saving behaviour have been explained variously. WEALTH: When a household experiences an increase in wealth, it is expected to consume both the added interest income and some portion of the increase in principal (Wilcox, 1991). If attractive rates of return encourage savings, then those with greater wealth have stronger incentives to defer consumption. Additional research is needed to determine the relationship between wealth and saving, particularly at low levels of wealth. EDUCATION: Several studies indicate that saving rates increase with education, even after considering a variety of control variables. Less-educated individuals were more likely to save providing for emergencies as their primary savings goal, while those with more education cited the desire to provide for childrens education and to help them set up households. Although it is likely that education affects willingness to save, more research is needed to confirm this hypothesis and to identify the mechanisms through which this process occurs. AGE DISTRIBUTION: Age and stage of the population will also affect the fraction of aggregate income spent. Both ends of the age distribution, the old and the young tend to spend a higher proportion of their incomes than those in the middle do. The savings-income ratio is small for younger groups, high for middle age groups, and again low among old age groups.EMPLOYMENT STATUS: It is likely to have important indirect effects on saving rates. Full-time, year-round employees are more likely to have access to institutionalized saving mechanisms (e.g., employer-sponsored pension plans); financial information and education; saving subsidies (e.g., employer contributions to pension plans); and payroll deduction. Employment status may help explain saving in low-income households. FISCAL POLICIES: They also would influence savings behaviour. Governments generally provide tax shelters for private savings. Willingness to save is influenced by taxation. In order to avoid or reduce the tax burden, people may prefer to save their money in various forms of financial assets. However, it is not clear, whether the tax incentives really rise the aggregate savings. INFLATION: It has been argued that inflation has negative impact on savings particularly in a country like India, with low consumption levels where consumers are likely to resist cuts into real consumption. Empirical evidence on the impact of savings has been mixed. RATE OF INTEREST: It exerts influence on the way in which any given level of aggregate disposable income is allocated between consumption and savings .People save money and try to get good profit in future. This is because they prefer a larger real consumption at a later date than a smaller immediate consumption. SIZE OF THE FAMILY: Propensity to save and propensity to consume are also influenced by the size of the family. With an increase in family size, the propensity to consume increases due to increased demand for food, clothing and other necessaries of life. Every aspect of household economic behaviour is significantly correlated with the presence of children in the household. RISKS OF INVESTINGNo investment is without risk. You may feel safe even when you do what financial advisers consider the right thing invest in a broad stock market index fund with a long-term view but there is risk there as well. Unfortunately, to build wealth over time, investors need to accept a significant amount of risk. Leaving money inrisk-free investmentssuch ashigh-yield savings accountsisnt investing at all. By taking on very little risk, keeping the bulk of your wealth in a savings account practically guarantees youll lose purchasing power over the long term due to the rising costs of goods that you might buy with that money.If youre interested in growing your wealth over long periods of time and most middle class investors will need to grow wealth rather than just preserve it iffinancial independence is an appealing goal youll need to consider riskier investments than savings accounts. There is a dizzying selection of investment types ranging across the entire risk spectrum, from money market funds low-risk investments similar to savings accounts to complex financial derivatives risky financial moves often best left to professional investors.Measuring and evaluating the risk involved in any investment is a little more complex. While an investors risk tolerance can be categorized or marked on a scale, an investments risk should be plotted using several dimensions. To evaluate an investment, you should consider the different types of risk that could affect its performance in order to determine whether the investment is appropriate for you.MARKET RISKMarket risk considers a broader picture. If you are invested in stocks, particularly if you choose the less expensive (but not necessarily safer) route of investing in a broad stock-based index fund, you have to accept that the overall economic condition of the country or even the world will cause your investments value to fluctuate. Market risk is relevant also for investments in single companies, bonds, or other products.A market crash or decline could crush this investments performance, even if the quality of your investment remains the same. Investments also follow trends. DEFAULT RISKDefault risk is related to the quality of the underlying investment, and it is more apparent when investing in a single company, through stocks or bonds. If you invest in a companys bond or a municipalitys, you generally expect a guaranteed return. The promised return is usually higher than what a savings account would provide, but you face the risk of default.Pensions, thought to be stable investments for retirements, are also exposed to default risk. Today, your company may be promising all retirees access to free health care, but if your company later restructures, that promised benefit might disappear. The government offers a type of insurance for companies that offer pensions, but sometimes that insurance isnt enough to ensure all pensioners receive exactly what had been promised.INFLATION RISKFinancial planners like to assume that inflation runs about 3 or 4 percent a year over long periods of time. This allows planners and investors to calculate expected real returns for an investment. There is a chance, however, that during any particular time, the measure of inflation or for a more accurate description in this case, the increase of the cost of goods is significantly more than 3 percent. If the country were to enter a period of hyperinflation, investments in your savings account until banks offer more appropriate interest rates would result in devastating losses when compared to consumer prices. MORTALITY RISKConsider mortality risk when you have or are considering investments in pensions, insurance contracts, annuities, or any investment with a long-term horizon. Annuities are the best examples. If your annuity payments or distributions to you continue only as long as youre alive, you run the risk of dying before you receive enough of your benefit to make the premium payments and fees worthwhile. If your investment strategy focuses solely on the long-term, there is a chance that you will never live to enjoy the benefits.SAVING OPTIONSNot all savings accounts are the same. Different banks offer different interest rates. And individual banks typically offer a number of savings accounts options to choose from.Before opening a savings account its a good idea to figure out how youll be using it. Ask yourself: How long youll be keeping your money in the account. How often youll want to withdraw money. How much money youll keep in the account.All of these factors can have an impact on how much interest you can earn. A simple rule to keep in mind is that time is money. The longer youre willing to leave your money alone in an account the higher interest youre likely to earn. Similarly, banks tend to offer higher interest if youre willing to keep a minimum balance. These can range from $100 to thousands of dollars.TYPES While there are many different savings options available, they all fall into four main categories. Basic bank savings accounts offer the lowest interest rates, usually less than 1%. They have few restrictions on access to your money, and they tend not to require minimum balances. Money market accounts are like high-yield accounts, but theyre tied to federal market indicators, such as the prime interest rate. Online savings accounts are a lot like basic bank accounts, but they offer higher interest rates because they operate online and dont have the overhead that standard banks have. Credit Unions. These are like banks, but theyre owned by their customers. They tend to offer higher interest on savings. CDsIf you dont mind leaving your money alone for a longer period of time from several months to several years consider taking out a certificate of deposit, or CD. These often offer the highest interest of any savings option a bank allows. Unlike regular bank accounts, you cant withdraw your money whenever you want not without paying a steep penalty. But they come with no risk and no fees.There are several kinds of CDs: STOCK-INDEXED CDS are based on the stock market. CALLABLE CDS have higher rates and are long-term, as long as 10-15 years. However, the bank may "call" the account if interest rates drop. GLOBAL CDS are tied to currency rates.Keep an eye out for promotional CDs. Banks sometimes offer these as a way to lure new customers with high interest rates.TYPES OF INVESTMENTSThe most common terms that are related to different types of investments: BOND: A debt instrument, a bond is essentially a loan that you are giving to the government or an institution in exchange for a pre-set interest rate paid regularly for a specified term. The bond pays interest (a coupon payment) while it's active and expires on a specific date, at which point the total face value of the bond is paid to the investor. If you buy the bond when it is first issued, the face or par value you receive when the bond matures will be the amount of money you paid for it when you made the purchase. In this case, the return you receive from the bond is the coupon, or interest payment. If you purchase or sell a bond between the time it is issued and the time it matures, you may experience losses or gains on the price of the bond itself. STOCK: A type of investment that gives you partial ownership of a publicly traded company . MUTUAL FUND: An investment vehicle that allows you to invest your money in a professionally-managed portfolio of assets that, depending on the specific fund, could contain a variety of stocks, bonds, market-related indexes, and other investment opportunities. MONEY MARKET ACCOUNT: A type of savings account that offers a competitive rate of interest (real rate) in exchange for larger-than-normal deposits. EXCHANGE-TRADED FUND (ETF): ETFs are funds sometimes referred to as baskets or portfolios of securities that trade like stocks on an exchange. When you purchase an ETF, you are purchasing shares of the overall fund rather than actual shares of the individual underlying investments. INVESTMENT STRATEGIESOnce you have a better understanding of the investment choices available, you may come across specialized terms that explain how money can be invested: ALLOCATION OF INVESTMENTS: Also known as asset allocation, this term refers to the types of investments/asset categories you own and the percentage of each you have in your investment portfolio. DIVERSIFICATION: This is a risk management technique that mixes a wide variety of investments to potentially minimize your investment risk. DOLLAR COST AVERAGING: An investment strategy used whereby an investor purchases fixed investment amounts at predetermined times, regardless of the price of the investment. This strategy minimizes risk because it reduces the difference between the initial investment and the current market value over a long enough timeline.

DIFFERENCE BETWEEN SAVINGS AND INVESTMENTSaving is a stage on the way to investing. You cannot be an investor without being a saver but you can be a saver without being an investor. When we talk about savings and saving money we could be talking about a piggy bank on the mantelpiece or a high interest deposit account. Savings are effectively cash or cash instruments, such as deposit account, term bonds etc. Investing is what you do with the savings you have created if you are looking to generate a return on your money that is greater than what is already available to you through your savings instruments.As a saver, you will be taking very few and very small risks with your money. As an investor you are taking a much greater risk. Not only is the return on offer to you likely not to be fixed or guaranteed, the capital sum you invest may be at risk as well.Saving is the process of putting money aside nowrather than spending itso you have it when you need it later. When you deposit money in savings accounts, checking accounts, and Certificates of Deposit (CDs) in a bank or credit union, your deposits are likely to be insured by the Federal Deposit Insurance Corporation (FDIC). Your money is likely to be safe and you can access it any time.Investing is what you do with that money to make it grow so you can reach your longer term life and financial goals. When you invest, you think longer term about your life plans--including a secure retirement-- and what money you will need to have for those plans. Investing may offer more choices for what you do with your money than saving but you also have a greater chance of losing your money when you invest than when you save. When you invest in such products as stocks, bonds, mutual funds and real estate, these investments are not insured by FDIC. But you also have a chance to earn more money from these investments. Savings that you will need very soon, within the next 6-12 months, and your emergency fund money, belong in accounts where they will earn some interest and benefit from compounding, they will be available at a moments notice when you need them. they have almost no risk of losing value. These savings vehicles include: savings or checking accounts at banks or credit unions money market mutual funds managed by investment companies and sold through banks and brokerage firms. These funds pool your money with other peoples and invest it in short-term fixed income securities that are usually quite safe and liquid or easily converted to cash. Money funds usually try to maintain a stable $1 per share value and pay investors a yield, which is usually close to short-term interest rates, that typically gets reinvested in additional shares. Many offer check-writing privileges. Certificates of Deposit (CDs) issued by banks. Note that CDs have a specific maturity date, usually a number of months or a small number of years, and most have penalties if you want to take your money out before maturity.For money that you want to grow toward a longer term goal, you would probably want to consider investing the savings in investments such as stocks, bonds, mutual funds, real estate investment trusts (REITs), exchange-traded funds (ETFs), managed accounts, annuities, etc. - all of which have more risk than a savings vehicle (meaning there is the chance that you could lose money as well as earn money) but in exchange for taking that risk you gain the potential for higher returns.Investing is a more active process than saving. In addition to opening, reading and asking questions about notices and statements you receive regarding your investments, on a regular basis you will need to review your investments and you may need to make changes in order for your invested money to keep working for you. Savers often just deposit money in a savings account and the money earns steady small amounts of money (called interest) until it is withdrawn.

COMPOSITIONDomestic saving (Investment) of India is divided into two parts - Public Saving (Investment) and Private Saving (Investment). Private Saving (Investment) is further divided into two parts, those are Household Saving (Investment) and Corporate Saving (Investment).While Indias saving and investment rates have steadily increased over time, their composition has undergone a considerable change (Chart 2). The most noticeable trend is the growing divergence between the public and private saving. Public saving declined from its peak level of 4.9 per cent of GDP in 1976-77 to 2.2 per cent in 2001-02, from where it increased to 4.5 per cent in 2007-08. During the same period, saving rates of both the household and private corporate sectors have steadily increased, offsetting the decline in the public sector. The share of household saving in the total saving has increased from nearly 60 per cent in the early 1990s to a maximum of 94 per cent in 2001-02, after which it steadily declined to nearly 65 per cent in 2007-08. The private corporate sector, whose saving rate was stagnant till the late 1980s, has recently emerged as the sector with the fastest rising saving rate (1.8 per cent of GDP in 1987-88 to 8.8 per cent of GDP in 2007-08). The share of private corporate saving in total saving has increased from below 10 per cent in 1980s to more than 23 per cent in recent years.

Similar compositional changes have occurred in investment as well. Until late 1980s public investment rate was dominating and reached its peak of 12 per cent in 1986-87. Following the liberalisation in early 1990s, the role of public sector has gradually reduced in number of sectors, and its place has been taken over by the private sector. Hence, the private corporate investment has steadily increased offsetting the decline in the public sector investment. The share of public sector investment in total investment was stagnant at around 50 per cent till 1980s, and has declined to 23 per cent in 2007-08. On the other hand, the share of private corporate investment, which was little more than 20 per cent in 1980s, has steadily increased to 40 per cent in 2007-08. Household sector investment rate also increased from low base of 3.2 per cent in 1963-64 to 14.2 per cent in 2004-05 and it moderated thereafter. However, its share in total investment broadly remained the same.

SAVING AND INVESTMENT PATTERNS IN INDIASaving is an important macroeconomic variable to be studied under the purview of the economic arena on an individual as well as household basis. In a country like India, the income standard is almost uncertain and leads to more consumption rather than saving which has now been a central problem. If the saving is low, then the investment will also be low leading to low capital formation. The determinants and patterns of saving differ from rural to urban region. In rural areas, the marginal propensity to consume is more rather than the marginal propensity to save.PRIVATE CORPORATE SECTOR SAVING The savings made in the private owned corporations are called as the private sector corporations. The private corporate sector comprises of (i) non-government non-financial companies, (ii) commercial banks and insurance companies working in private sector, (iii) co-operative banks, credit societies and non-credit societies and (iv) non-banking financial companies in the private sector. PUBLIC SECTOR SAVINGThe public sectors savings are constituted into (i) government savings, and (ii) savings generated by the public sector undertakings in the form of internal resources. One process of 4 estimating public sector saving is to scrutinize the relationship between public savings and the consolidated returns shortage of government which is an alternative measure of government savings.

NATURE OF SAVINGS IN INDIASavings can be known as the cash or physical products set aside for future use. People in rural and other low-income communities can save when they are guided and encouraged by the Government and financial institutions. The people in rural region, savings are made through traditional credit rotation groups, or purchase of domestic animals (goats, pigs, chickens or cows). Gradually, the traditional way of saving in rural region has been abolished; the people shifted their saving pattern to save in form of physical assets, like gold, land and durable goods and financial assets like shares, stocks, and bonds. The Micro Finance Institutions (MFIs) and micro-enterprises are playing a major role in recent years in rural region by encouraging the people to save more. MFIs need to inject capital or funds which may be the owner's of money or loan. When a loan is used, it is someone else who has done the saving. Micro enterprises, like other businesses, convert savings (of the owners and of others) into investment, in the creation of wealth. Variations in the saving pattern is mostly found in different societies, as there exists, a difference in environmental, social, economic and cultural contexts. Human wants get transformed as the society grows and in turn cause substantial changes in the outlook of the people towards saving. In low-income communities, the ability to save is low and often is in cash or kind. Saving in cash is cheap and convenient. Variations in saving is visible in different communities as there exists difference in income levels, consumption pattern, awareness of the saving benefits, family size, investment opportunities, etc. Human attitude towards saving has been changed through decades as in the remarkable growth in the society.

STRUCTURE OF SAVINGS IN INDIA In India domestic savings originate from three principal sectors namely: (i) household sector, (ii) Private-corporate sector and (iii) public sector. The household sector comprises of individual, non-corporate business and private collectives like temples, educational institutions and charitable foundations. The saving can be held in the form of increases in (a) Liquid assets like currency bank deposits and gold (b) Financial assets like shares, securities and insurance policies and physical assets. The corporate sector includes joint stock companies in the private business sector, industrial credit and Investment Corporation etc., and cooperative institutions. Saving of the corporate sector is represented by the retained earnings of this sector. Government sector consists of the central and state government, the local authorities and various government and department undertakings; hence the saving of this sector relates to the budgetary surplus on current account of the central government, state government, local authorities, the current surplus of various government departments and retained projects of government undertakings.

HYPOTHESIS BASED ON SAVINGS AND INVESTMENT PATTERN These main theories that currently exist on the determinants of savings behaviour can be explained as: THE LIFE-CYCLE HYPOTHESIS (LCH) is an economic theory that pertains to the spending and saving habits of people over the course of a lifetime. The concept was developed by Franco Modigliani and his student Richard Brumberg. LCH presumes that individuals base consumption on a constant percentage of their anticipated life income. An example supporting the hypothesis is that people save for retirement while they are earning a regular income (rather than spending it all when it is earned). This simple theory leads to important and non-obvious predictions about the economy as a whole, that national saving depends on the rate of growth of national income, not its level, and that the level of wealth in the economy bears a simple relation to the length of the retirement span. , the life-cycle hypothesis remains an essential part of economists thinking. With population growth, there are more young people than old, more people are saving than are dissaving, so that the total dissaving of the old will be less than the total saving of the young, and there will be net positive saving. If incomes are growing, the young will be saving on a larger scale than the old are dissaving so that economic growth, like population growth, causes positive saving, and the faster the growth, the higher the saving rate. In fact, it doesnt much matter whether it is population growth or growth in per capita incomes, what matters for saving is simply the rate of growth of total income. The relationship between saving and the age-structure of the population is also a current topic of debate. Cross-country regressions regularly find that aggregate saving rates are lower when the population share of the elderly is high and when the population share of children is high, predictions that are in accord with the life-cycle theory if saving takes place in middle-age when earnings are high, after the child-rearing ages, but prior to retirement. C = (1/T) W + (R/T)Y

RELATIVE INCOME HYPOTHESIS states that the satisfaction (or utility) an individual derives from a given consumption level depends on its relative magnitude in the society (e.g., relative to the average consumption) rather than its absolute level. It is based on a postulate that has long been acknowledged by psychologists and sociologists, namely that individuals care about status. In economics, relative income hypothesis is attributed to James Duesenberry, who investigated the implications of this idea for consumption behaviour in his 1949 book titled Income, Saving and the Theory of Consumer Behaviour. At the time when Duesenberry wrote his book the dominant theory of consumption was the one developed by the English economist John Maynard Keynes, which was based on the hypothesis that individuals consume a decreasing, and save an increasing, percentage of their income as their income increases. This was indeed the pattern observed in cross-sectional consumption data: At a given point in time the rich in the population saved a higher fraction of their income than the poor did. However, Keynesian theory was contradicted by another empirical regularity: Aggregate saving rate did not grow over time as aggregate income grew. Duessenberry argued that relative income hypothesis could account for both the cross-sectional and time series evidence. Duessenberry claimed that an individuals utility index depended on the ratio of his or her consumption to a weighted average of the consumption of the others. From this he drew two conclusions: (1) aggregate saving rate is independent of aggregate income, which is consistent with the time series evidence; and (2) the propensity to save of an individual is an increasing function of his or her percentile position in the income distribution, which is consistent with the cross sectional evidence. Relative income hypothesis has also found some corroboration from indirect macroeconomic evidence. The RIH is formulated as: Ct/Yt=a-b (Yt/Y0)

THE PERMANENT INCOME HYPOTHESIS was formulated by the Nobel Prize winning economist Milton Friedman in 1957. The hypothesis implies that changes in consumption behaviour are not predictable, because they are based on individual expectations. This has broad implications concerning economic policy. Under this theory, even if economic policies are successful in increasing income in the economy, the policies may not kick off a multiplier effect from increased consumer spending. Rather, the theory predicts there will not be an uptick in consumer spending until workers reform expectations about their future incomes. A theory of consumer spending which states that people will spend money at a level consistent with their expected long term average income. The level of expected long term income then becomes thought of as the level of permanent income that can be safely spent. A worker will save only if his or her current income is higher than the anticipated level of permanent income, in order to guard against future declines in income. PIH divides income into permanent income and transitory income: Y = YP+ YT

CONCLUSION In the conclusion of the above theories and literature, we found that the savings does not depend upon income alone rather on the consumption pattern of the individuals also. The relative and permanent income hypothesis holds that the relationship between consumption and income is proportional whereas the relationship of the life cycle hypothesis is non-proportional. By the above theories it is clear that when the income grows the population is encouraged to save and the dis-saving occurs with the old generation as due to no or less income. The relationship between saving and the age-structure of the population is also a current topic of debate.

RESEARCH METHODOLOGYInvestment is a purchase of a financial product or other item of value with an expectation offavorable future returns. Investing is a serious subject that can have a major impact on investors future well-being. Virtually everyone makes investments. Investors have a lot of investment avenues to park their savings. The risk and returns available from each of these investment avenues differ from one avenue to another. Even if the individual does not select specific assets such as stock, investments are still made through participation in pension plan, and employee saving programme or through purchase of life insurance or a home .Employee behavior deals with analyzing the behavior of an employee based on his psychographic and demographic factors like age, gender, education and income groups. The respondents of this study will consist of only the banking employees working in private and public sector as they are having knowledge of financial products available at large. They have unique features of safety, security, regular income, retirement benefit than the other occupation people like business man.

When it comes to investing, the volume of facts and information available can be incredibly time consuming to wade through and for many individuals it is just too confusing. Yet we need a good understanding of the financial options available to us to be able to make good investment decisions. In India, many investment avenues are available where some are marketable and liquid while others are non-marketable and some of them are highly risky while others are almost riskless. The investor has to choose Proper Avenue depending upon his specific need, risk preference, and returns expected.

Different avenues are:SAFE/LOW RISK AVENUES: Savings Account, Bank Fixed Deposits, Public Provident fund, Government Securities, etc.MODERATE RISK AVENUES: Mutual Funds, Life Insurance, Debentures, Bonds.HIGH RISK AVENUES: Equity Share Market, Commodity Market, FOREX Market.TRADITIONAL AVENUES: Real Estate (property), Gold/Silver, Chit Funds.EMERGING AVENUES: Virtual Real Estate, Hedge Funds/Private Equity Investments, Art and Passion.

LITERATURE REVIEW

Puneet Bhushan & Yajulu Medury (2013) concluded that women are more conservative and takes less risk and significant gender differences occur in investment preferences for health insurance, fixed deposits and market investments among employees.V.R.Palanivelu & K.Chandrakumar (2013) highlights that certain factors of salaried employees like education level, awareness about the current financial system, age of investors etc. make significant impact while deciding the investment avenues.Lalit Mohan Kathuria & Kanika Singhania (2012) concluded that private sector banking employees were investing a larger portion of their savings into safe and risk-free investment avenues, like employee provident fund, public provident fund and life insurance policy and only forty per cent of the respondents had high level of awareness regarding various investment avenues.D. Harikanth & B. Pragathi (2012) indicated that there is a significant role of income and occupation in investment avenue selection by the male and female investors. Geographical horizon of the investors, risks bearing capacity, educational level, age, gender and risk tolerance capacity etc, also impacts their selection.Sanjay Kanti Das (2012) summarized that the bank deposits remain the most popular instrument of investment followed by insurance and small saving scheme to get benefit of safety and security of their life and investment. It was found that there is a need for increasing the financial literacy among the middle class households.Meenakshi Chaturvedi & Shruti Khare (2012) revealed that most investor preferred Bank Deposits as their first choice of investment, secondly small saving scheme followed by the life insurance policies.Giridhari Mohanta & Sathya Swaroop Debasish (2011) states that people were ready to invest for meeting their financial, social and psychological need. But the investor always had a mindset of safety and security, higher capital gain, secured future, tax benefit, getting periodic return or dividends, easy purchase and meeting future contingency.Syed Tabassum Sultana (2010) concluded that individual investor still prefer to invest in financial products which give risk free returns. The study confirmed that Indian investors even if they are of high income, well-educated, salaried, and independent are conservative investors who prefer to play safe in the market.Rajakumar (2008) states that customers attitude towards purchase of insurance products concludes that there is a low level of awareness about insurance products among customers in India.Arvind Kumar Singh (2006) concluded that in Bangalore investors are more aware about various investment avenues and the risk associated with that and in Bhubaneswar, investors are more conservative in nature and they prefer to invest in those avenues where risk is less like bank deposits, small savings, post office savings etc.Ranganathan (2006) noted that financial markets are affected by the financial behavior of investors and consumer behavior from the marketing world and financial economics had brought together a need to study an exciting area of behavioral finance and thus studying the behaviour of investors holds importance.Kar Pratip, Natrajan & J P Singh (2000) concluded that the households investment in shares,debentures and mutual funds was below 10% and the equity investor households portfolio was of relatively small value and undiversified. It was also found that one set of households, in spite of their lower income and lower penetration level of consumer durables, were in the securities market, while another set of household with higher income and higher penetration level of consumer durables did not have investment in securities market.Sujit Sikidar & Amrit Pal Singh (1996) revealed that the salaried and self-employed formed the major investors in mutual fund primarily due to tax concessions.

OBJECTIVES OF THE STUDY1. To study the investment behaviour towards investment avenues in India.2. To study the perceptions of different age groups towards investment avenues.

HYPOTHESISH01: There is no significant difference between the perceptions of different age groups towards investment avenues.

RESEARCH DESIGNDescriptive research is carried out to describe the phenomenon. This study is done to understandinvestment behaviour of different age groups towards investment avenues.

SAMPLING AND SAMPLE SIZEFor the present study the sample size was 100 collected from the respondents through convenientjudgmental sampling method.

DATA COLLECTIONThe study was done with the primary data using questionnaire as a tool to assess the investment behaviour.Since the aim of the survey is to allow every person to list his opinion about investment avenues. A closed ended questionnaire was prepared with total thirty characteristics of attributes to assess the relative importance of each statement on a five-point Likert scale. The secondary data was collected through various websites.

TOOLS APPLIEDThe present study applied Mean and SD. The tools were applied through Statistical Software SPSS 19 through which mean and variance were revealed.ANALYSIS AND INTERPRETATIONTo test the reliability of data gathered for the current study Cronbanch alpha was used which showed that data are reliable, as it came 0.829.

RELIABILITY STATISTICS

Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items.829 .840 30

Combined Mean and Variance:The combined mean noted was 3.523 and variance was .259 in the above study.

Mean Minimum Maximum Range Maximum /Minimum Variance N of Items

Item Means 3.523 2.567 4.433 1.867 1.727 .259 30

Item

Variances 1.049 .461 1.789 1.328 3.880 .111 30

INDIVIDUAL MEANS AND VARIANCES OF DIFFERENT AGE GROUPS.

TABLE 1AGE GROUP: BELOW 30

Mean Minimum MaximumRangeMinimum/ MaximumVarianceN of items

Item Means 3.6542.5004.6252.1251.8500.35830

Item Variances 0.7670.2142.2682.05410.5830.27330

TABLE 2AGE GROUP: BETWEEN 30-40

Mean Minimum MaximumRangeMinimum/ MaximumVarianceN of items

Item Means 3.5042.5634.4381.8751.7320.27830

Item Variances 1.1400.2502.2632.0139.0500.14930

TABLE 3AGE GROUP: ABOVE 40

Mean Minimum MaximumRangeMinimum/ MaximumVarianceN of items

Item Means 3.400

2.0004.3332.3332.1670.36730

Item Variances 1.2091.673.4673.30020.8000.81030

TABLE 4SUMMARIZED MEAN AND SD OF IMPACT OF AGE ON INVESTMENT AVENUE

PARAMETERS AGE(IN YEARS) MEAN STANDARD DEVIATION

YOUNGER < 30 3.65 .60

MIDDLE 30-40 3.50 .53

ELDER >40 3.40 .60

RESULTS AND DISCUSSIONAfter fact finding techniques and implementation of the mean and SD results, it was found that younger people are more interested in investment in comparison to elder and middle age people. Significant of the research paper confidence goes with youngest investors. In future, updations of the research depend on the number of respondents. These results are found with the help of primary data collection through handmade questionnaire with statistical analysis.According to the findings it was revealed that null hypothesis is rejected as there is a significant difference between the perceptions of different age groups towards investment avenues. That means that investors belonging to different age groups have different behaviour while doing investment and there selection of any investment avenue highly depends upon their age. It was found that age affect investors preferences.

CONCLUSION OF THE STUDYThe present study endeavored to give a look on behaviour of investors towards investment avenues. The different avenues can be preferred provided it is put forth before young and different age group investors in the desired form. If the younger generation starts investing at such an early stage on regular basis, they will be able to save more for their future. Facts revealed in this study highlight the perception of varied age group investors who desire to invest in different avenues which give high returns and growth prospect.Survey findings of this study have got significant managerial implications that can be used by investment companies in restructuring their existing practices and finally innovating new ways of service delivery.

SCOPE FOR FURTHER RESEARCH1. In this research, impact of age has been found out. The impact of other demographics can alsobe researched.2. Relation between various factors can also be researched.

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