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1. Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
156
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
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

2. Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
157
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
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.

3. Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
158
5. To find out the association between income of the
respondents and investment pattern of the
respondents.
RESEARCH METHODOLOGY
It is a known and established fact that, any research
has to be validated based on the systematic collection
and analyzing the data. For this study survey method
was adopted to collect the primary information from
the employees using a well-structured pre tested
questionnaire. The primary data was collected from
130 respondents employed in a bank in Chennai. The
secondary data was collected from internet websites,
journals, newspapers, magazines, etc. The collected
data were analyzed with Percentage, Cross tabulation
and percentage difference analysis, Chi-square Test
and Karl Pearson’s Correlation coefficient.
Hypothesis
Ho: There is no significant relationship between the
Income of the respondents and investment made by
the respondents.
Ho: There is no significant relationship between
demographic factors of the respondents and the basis
of Investment made by the respondents.
Ho: There is no significant association between
income category and basis of investment of the
respondents.
Ho: There is no significant association between
investment category and basis of investment of the
respondents.
Demographic profile of the respondents
Table-1, gives the summary of the demographic
characteristics of the respondents.
Analyzing the demographic variables in the Table-1,
it may be observed that 81% of the respondents are
male and the remaining female. 48% of the
respondents fall in the category of 31-40 years and
31% of the respondents are in 41-50 years category.
Around 88% of the respondents are married. Out of
the total respondents, 40% are post graduates and 33
% of the respondents and professionally qualified.
More than 75% of the respondents are from the
middle management and 62% of the respondents lived
in nuclear family set up.
Table 1 - Demographic profile of the respondents
Variable No of
employees
%
Gender Male 129 81
Female 31 19
Age 21-30 19 12
31-40 76 48
41-50 50 31
51-60 15 9
Marital
Status
Single 20 12
Married 140 88
Educational
Qualification
Graduate 52 33
Post Graduate 64 40
Professional 44 27
Grade Junior
Management 27 17
Middle
Management 120 75
Senior
Management 13 8
Family Nuclear 99 62
Joint 61 38
Distribution of Income, Investment, Objective,
Source of motivation & time horizon preferred by
the respondents.
Preference towards investment in Table - 2 indicates
that more than 40 % of the respondents found to earn
Rs.5-10 Lacs and 21% were found to earn between
Rs.10-15 Lakhs per annum. Further, 52% of the
respondents invest up to Rs.2.5 Lacs annually and
29% of the respondents invest between Rs.2.5 and
Rs.5 Lacs category per annum. Out of the total
respondents, 32% each of the respondents prefers to
invest in 1-2 year and 26% prefer to invest in 2-3 year
category as time horizon and 22 % prefers long term
investment of more than 6 years. 46% of the
respondents have Tax Planning as their objective and
16% and 15% of the respondents have invested with
an objective of Asset creation and Habit respectively.
For 31% of the respondents, friends and relatives
were the source of motivation and financial news and
Colleagues take the second and third position with
26% and 18% respectively.
Table 2 Distribution of Income, Investment,
Objective, Source of Motivation & Time Horizon
Preferred By the Respondents
Variable No of
employees
%
Income < Rs.5L 41 26
Rs.5-10 L 71 44

4. Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
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Variable No of
employees
%
Rs.10-15 L 33 21
> Rs.15 L 15 9
Investment < Rs.2.5 L 84 52
Rs.2.5-5 L 46 29
Rs.5-7.5 L 14 9
> Rs.7.5 L 16 10
Objective Habit 24 15
Family Income 15 9
Tax Plan 73 46
Extra
Income
8 5
Asset Creation 25 16
Future
Requirement
15 9
Motivation
Source
Self 3 2
Friends &
Relatives 50
31
Colleagues 28 18
Financial
News 41
26
Market
Reference 10
6
Opinion
Leader 2
1
Family
Members 26
16
Time
Horizon
< 1 year 7 4
1-2 years 51 32
2-3 years 41 26
-6 Years 26 16
> 6 years 35 22
Pearson correlation of coefficient between Income
and Investment
Following are the details:
X – Income of the respondents & Y – Investment of
the respondents
X = 1455.31; X2
= 20984.50; N = 160
Y = 543.63; Y2
= 4972.98; XY = 8345.08
r = NXY- (X)(Y)/ X2
- (X)2
] Y2
-
(Y)2
]
r = 0.69097
Relationship between the variable was found by using
Pearson correlation coefficient method. Positive
correlation exists between the variables Income and
Investment. There is strong relationship between the
variables.
Relationship between Income and Investment
Table 3 - Association between Income and
Investment
<
Rs.2.5Lacs
Rs.2.5-
5Lacs
Rs.5-7.5
Lacs
>Rs.7.5
Lacs
Total
<Rs.5L 32 6 1 2 41
5-10L 43 19 4 5 71
10-15 8 16 5 4 33
15L 1 5 4 5 15
Grand
Total 84 46 14 16 160
From Table-3 above, it is evident that maximum
respondents have invested less than Rs.2.5 lacs per
annum and least number of respondents under Rs.5 –
Rs.7.5 Lacs the category.
On applying chi-square test for the above data, it
could be seen that calculat 2
is 44.232
where degree of freedom is 9 as against the tabulated
2
of 16.919 at 95% of confidence level.
Since the calculated value is more than the tabulated
2
we conclude that Ho is rejected. Hence
there is significant relationship between Income
and Investment.
Association between demographic variables and
basis of investment are made by the Investors.
Table-4 Observed details between demographic
variables and basis of investment
Basis
of
Investment
Market
Value
Asset
Creation
ROI
Value
Invest
Total
Age 21-30 1 6 11 1 19
31-40 7 32 29 8 76
41-50 6 17 24 3 50
51-60 1 8 4 2 15

5. Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
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Basis
of
Investment
Market
Value
Asset
Creation
ROI
Value
Invest
Total
Total 15 63 68 14 160
Gender Male 15 50 51 13 129
Female 0 13 17 1 31
Total 15 63 68 14 160
Marital
Status
Single 1 8 10 1 20
Married 14 55 58 13 140
Total 15 63 68 14 160
Edu
Qual
Grad 4 14 29 5 52
PG 4 30 24 6 64
Prof 7 19 15 3 44
Total 15 63 68 14 160
Income < Rs.5L 2 11 28 0 41
Rs.5-10L 5 30 26 10 71
Rs.10-
15L
5 17 9 2 33
> Rs.15L 3 5 5 2 15
Total 15 63 68 14 160
Investmen
t
< Rs.2.5L 5 35 39 5 84
Rs.2.5-5L 3 18 19 6 46
Rs.5-7.5L 2 4 5 3 14
> Rs.7.5L 5 6 5 0 16
Total 15 63 68 14 160
From Table – 4 it is evident that most of the investors
select their investment based on the Return on
Investment and Asset creation has taken the second
position.
Table -5 Relationship between demographic
factors and basis of investment
Demographic
Profile
Chi-
square
Value
Dof Tab
Value
Sig or
not
Sig
Age 6.344 9 16.919 Not
Sig
Gender 6.387 3 7.815 Not
Sig
Marital
Status
1.139 3 7.815 Not
Sig
Edu 9.475 6 12.592 Not
Demographic
Profile
Chi-
square
Value
Dof Tab
Value
Sig or
not
Sig
Qual Sig
Income 23.062 9 16.919 Sig
Investment 17.159 9 16.919 Sig
Table- 5 shows that, chi-square test at 5 % level of
significance has been conducted using the data
collected to verify the significant relationship between
demographic factors and the basis of investment of
the respondents. The results of the analysis elucidates
that the variable like Income and Investment are
significantly associated with the basis of investment,
whereas variables like age, gender, marital status and
educational qualification is not significantly
associated with the basis of investment.
SALIENT FINDINGS
1. Out of the total respondents, 81% of the
respondents are male and 48% of the respondents
were found to be in the category of 31-40 years of
age.
2. Out of the respondents, 88% of the respondents
are married and 75% of the respondents are from
the middle management.
3. 45% of the respondents are in the income group
between Rs.5 – 10 Lacs and 59% of the
respondents invest less than Rs.2.5 Lacs per
annum.
4. Tax planning is the main objective of the
respondents and for them it was found that their
friends and relatives are the main source of
motivation (31%).
5. Positive correlation exists between the variables
Income and Investment. There is strong
relationship between the variables.
6. It is proved by chi-square test that there is
significant relationship exist between income and
investment of the respondents.
7. It is also found by chi-square test that the
variables like Income and Investment are
significantly associated with the basis of
investment
8. Demographic variables like age, gender, marital
status and educational qualification are not

6. Proceedings of International Conference on Management Finance Economics
July 11-12, 2015, ISBN:9788193137307
161
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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