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1. ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
ZIJBEMR, Vol.5 (6), JUNE (2015)
Online available at zenithresearch.org.in
323
A STUDY ON BEHAVIOR OF INVESTORS TOWARDS POST OFFICE
SAVING SCHEMES IN PUNE CITY
ANJUM SAYYAD*; AKBAR SAYYED**
*ASSISTANT PROFESSOR (MBA)
POONA INSTITUTE OF MANAGEMENT SCIENCES AND ENTREPRENEURSHIP
PUNE-411001
MAHARASHTRA (INDIA).
**ASSISTANT PROFESSOR (MBA)
POONA INSTITUTE OF MANAGEMENT SCIENCES AND ENTREPRENEURSHIP
PUNE-411001
MAHARASHTRA (INDIA).
ABSTRACT
India Post Office Savings Bank is widely known as a safe, convinced and traditional formal institution
offering saving products. Its outreach and scope has been persistently increasing both in terms of number
of accounts as well as number of branches all over India. Globalization and opportunity of overseas
market has brought outsized revolution in the financial sector of the country, which proves to be
challenging for Post Office Saving Banks.Liberalization has substantially increased better and innovative
investment possibilities to the investor. However, India POSB has and continuously positioned itself as a
reliable agency of Government of India. It is due to its competitive advantage of geographical
accessibility and product differentiation on the important attributes of safety, security and risk free factor.
The present paper examines the preference of investors of Pune region towards different investment
schemes of Post office and factors that motivates them to choose a particular investment scheme of post
office. It further explores the behavioral patterns that investors prefer for savings in Post Office Saving
Schemes. The research is based on primary data collected from 120 respondents.
KEYWORDS: Behavior Pattern, Investment Decision, Post office Saving Schemes, and Puneites
INTRODUCTION
Post Office has since many years served as the backbone of communication services and deposit/
saving options. For more than 150 years Post offices has played a vital role as a leader in
communication all over India by providing socio-economic development of the country.Post
Offices offer varied services. Their services are not just confines to delivering mails, they also
accept deposits, provide insurance options and to a large extent supply various saving schemes to
the citizens.India Post is committed to provide basic postal facilities throughout the country at an
affordable price. A network of 1.55 lakh post offices in the country, the largest in the world, of
which more than 1.39 lakh are in the rural areas, is indicative of this commitment. Rapid
introduction of information technology has not only driven post offices to be business oriented
but also businesses has approached post offices for various business accounting transactions. In
this era of fast developing information and communications technology, large scale induction
and assimilation has become vital for the sustenance and growth of India Post.At present where
private players are entering and capturing the financial business and commercial market, it is a

2. ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
ZIJBEMR, Vol.5 (6), JUNE (2015)
Online available at zenithresearch.org.in
324
matter of concern whether Post Office Savings Banks are still preferred by society or not,
whether it is still seen as important saving option or not. Consequently, an attempt has been
made to find out the investment preferences towards different post office saving schemes and to
know the reasons behind the interest of investors of Pune City with specific reference to their
behavioral patterns.
RESEARCH PURPOSE
Puneites constitute a vital segment of the Pune‟s financial market and greater understanding of
the perceptions, preferences and behavior of these investors is very vital in the promotion,
protection of interests and reinvestment of these investors. Behavioral Finance focuses on how
investors interpret knowledge in order make investmentdecisions based on information, various
qualitative parameters and how they act with their investment decisions based on these aspects.
BehavioralFinance has developed as a result of increasing interest of psychologists in
economics.As we know, one of the most important factors in investment decisions is the
emotions.Behavioral Finance approach investigates the influence of certain behavioral pattern on
investment decisions.This research analyzesthis aspect with reference towards Post office Saving
Schemes in Pune City.
PROBLEM STATEMENT AND RESEARCH QUESTION
This study was taken up with the main idea of studying the investors‟ preference and behavior
towards Post office deposits schemes. Most of the investors are influenced to make investment in
post office deposits schemes for variety of safe and secure reasons. Nowadays people prefer to
invest with private players over Post offices and other government Schemes which has led to the
reduction in deposits of the schemes provided by the latter.The slashing of commissions to agent
has further aggravated the problem of collection of funds and investments thereby aggravating
the situation. Hence the researcher decided to study and identify the factors and behavior patterns
of the investors towards Post Office Deposits Schemes.
OBJECTIVES OF THE STUDY
1. To study the preference of investors towards different Post office saving schemes
2. To identify the factors that influence investors decision for saving in these schemes
3. To identify and study the impact of behavior patterns of investors on their investment
decisions.
REVIEW OF LITERATURE
National Council of Applied Economic Research (NCAER) (1961) 'Urban Saving Survey'
noticed that irrespective of occupation followed and educational level and age attained,
households in each group thought saving for the future was desirable. It was found that the basic
motive for saving of people was to make provision for emergency situations and saving for old
age. Among motives for saving, provision for emergencies, old age, and purchase of house occur
with same frequencies in all occupational and educational groups. Hence it was concluded that
efforts should be taken to popularize financial forms of savings especially among the less
educated and informed upper income group of people. Profitability seems to be the most
important motive for determining saving preference. Safety is another significant consideration
for most people and liquidity ranked third.

3. ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
ZIJBEMR, Vol.5 (6), JUNE (2015)
Online available at zenithresearch.org.in
325
Securities and Exchange Board of India (SEBI) and NCAER (2000) 'Survey of Indian
Investors' has reported that safety and liquidity were the primary considerations which
determined the choice of an asset. Ranked by an ascending order of risk perception fixed deposit
accounts in bank were considered very safe, followed by gold, units of UTI-US64, fixed deposits
of non-government companies, mutual funds, equity shares, and debentures. Households'
preference for instruments in which they commonly invested matched the risk perception. Bank
deposits, which had an appeal across all income classes, and tax-saving schemes were preferred
by middle-income and higher-income groups. There was a correlation between the income levels
and investments of households in market-related securities.
Dr.R.Ganapathi (2010)identified that various Small Saving Schemes were mainly meant to help
at one hand the small investors and at the other hand also those who are in high tax brackets. The
study concluded that proper advertisements must be made for Post Office Savings Schemes, so
that even a layman could know about these Schemes and deposits can be increased. They stated
that investing their amount in Post Office deposits provides safety and security for the amount
invested making it a sheltered option for investment.
Vinayagamoorthy and K.Senthilkumar (2012)in their study analyzed that mobilization of
domestic financial resource has remained amajor concern in many developing countries. Despite
the variety of vehicles that are intended to mobilize andallocate financial resources, only very
few offer strategies for meeting the needs of poor and lower incomepeople. Savings are
increasingly beings acknowledged as a powerful tool for poverty reduction. Postal savingsfunds
play a significant role in financing public debt and in a number of countries, the funds are
intermediatedthrough a variety of policy based financial institutions with developmental
objectives, returning the funds to thedirect benefits of the community of savers. Savings is the
excess of income over consumption expenditure.Savings are meant to meet contingencies and
raise standard of living of individual savers.
A study by N. Kathirvel A. Mekala (2010) titled “Women Investors: Perception towards Online
Trading in Tamilnadu” studied that a good financial systemprovides the intermediation between
savers and investors and promotes faster economic development. Aninvestment share requires a
careful evaluation of factors related to the economy, industry and the company. The women
investor may change according to time, fashion, technology,development etc. it was found that
there is no association between savings per monthand time taken for investment decision. Basic
knowledge must be given to the investors about all types ofinvestments, so that the investor can
make a better choice that best suits their investment plan.
R. Ganapathi and S. Anbu Malar (2010)investigated Investors Attitudes towards Post office
Deposit
Schemes. The post Office has long been known as a medium to inculcate the habit of thrift and
savings amongthe agricultural workers. But over time, its role has changed and it has grown to
become one of the best avenuesto channel investment from even the wealthy investors and use
them fruitfully in nation building activities. Therehas been introduction of several types of
deposit schemes that cater to the differing needs of different classes ofinvestors. They are well-
known for their tax saving schemes, high interest rates and the safety and liquidity thatthey offer.
This has enabled them to compete successfully with the other avenues of investment available

4. ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
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Online available at zenithresearch.org.in
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toinvestors like commerce, etc. This study is an attempt to identify the awareness, preference and
attitudes ofinvestors towards various deposit schemes offered by the Post Office among 300
respondents of the CoimbatoreDistrict.
Karthikeyan (2001) has conducted research on Small Investors' Perception on Post Office
Saving Schemes and found that there was significant difference among the four age groups, in
the level of awareness for KisanVikasPatra (KVP), National Savings Schemes (NSS), and
Deposit Scheme for Retired Employees (DSRE), and the overall score confirmed that the level of
awareness among investors in the old age group was higher than in those of the young age group.
No difference was observed between male and female investors except for the NSS and KVP.
Out of the factors analyzed, necessity of life and tax benefits was the two major ones that
influence the investors both in semi-urban and urban areas. Majority (73.3 per cent) of investors
of both semi-urban and urban areas were very much willing to invest in small savings schemes in
future provided they have more for savings.
Preeti Singh (2002) stated that post office schemes were generally like the post office deposits
schemes and commercial bank schemes. They have a saving account, a recurring deposits
account, time deposits account which is also recurring in nature. The saving account functions in
the same way as commercial banks through cheques and there is no restriction on withdrawals.
The study by Richa (2004) in her study argued that the Post office continues to be a major
attraction for savers. Finance Ministry officials say that the attraction for the Post office deposit
schemes stems from the higher interest rate they offer vis-à-vis what banks give.
Scher (2001) observed that in many countries Postal Savings and Giro remittances have long
enabled provision of financial services to all segments of the population.
Gavini and Athma (1999) found that social considerations, tax benefits, and provision for old
age were the reasons cited for saving in urban areas, whereas provision for old age was the main
reason in rural areas. Among the post office schemes, Indira VikasPatra (IVP), KVP and Post
Office Recurring Deposit Account (PORD) were the most popular, in both urban and rural areas.
RESEACH METHODOLOGY
Since the researcher has confined his study to survey method, it is essential to select sample
respondents area ofthe study and selected investors for the study. The sample size for the study
was 120 respondents those investors who have invested or either any time invested in post office
saving schemes.The study is confined to the entire Pune city. The Sources of data were primary
as well as secondary. The data collected from the survey using questionnaire as a tool and the
information gathered from books, journals, magazines, reports, were secondary. The
datacollected from both these sources were scrutinized, edited, and tabulated.

5. ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
ZIJBEMR, Vol.5 (6), JUNE (2015)
Online available at zenithresearch.org.in
327
FINDINGS
Question No. Particulars No. of
respondents
Percentage
Preference
towards Financial
Products
Post Office 34 28.33
Bank 43 35.83
Insurance 09 7.5
Share Market 12 10
Mutual Funds 04 3.33
NBFC's 11 9.16
Real Assets 07 5.83
TOTAL 120 100
Possession of
Post Office
Schemes
Yes 73 60.83
No 36 30
Thinking To Invest In Future 11 9.16
TOTAL 120 100
Preference
towards Post
Office Schemes
Savings Account 04 3.33
RD Account 52 43.33
TD Account 34 28.33
MIS Account 10 8.33
PPF Account 27 22.5
KVP 10 8.33
NSC 18 15
TOTAL 120 100
Factors
Influencing to
Invest in Post
Office
Tax-Free Interest 50 41.66
Safe, Secure And Risk-Free
Investment
40 33.33
Attractive Rates Of Interest 20 16.66
Instruments Are 10 8.33
Easily Transferable 0 0
Regular Monthly Income 16 13.33
Tax Benefit 30 25
TOTAL 120 100
Criteria of
Selecting an
Agent
Personal Relationship With
The Agent
56 46.66
Performance Of The Agent 40 33.33
Facilities Offered By The
Agent
25 20.83
Other Factors 10 8.33
TOTAL 120 100
Purpose of
Investment
For Retirement And Old Age 22 18.33
Acquiring An Asset 21 17.5
Child's Education 46 38.33
Child's Marriage 37 30.83
Other Purposes 05 4.16

6. ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
ZIJBEMR, Vol.5 (6), JUNE (2015)
Online available at zenithresearch.org.in
328
TOTAL 120 100
Variables having
negative impact
on Post Office
Savings
Poor Awareness 56 46.66
Less aware due to Less
advertisement
48 40
Less Attractive 29 24.16
Low return 24 20
Problem of liquidity 34 28.33
Low Capital Appreciation 34 28.33
Problem of IT 36 30
No guarantee of returns 07 5.83
TOTAL 120 100
Select the
behavior patterns
that according to
you has a greater
impact on your
investment
decision in post
office saving
schemes.
Confidence level in post
office saving schemes
43 5.83
Past experience in savings 37 35.83
Level of risk and uncertainty 21 30.83
Loss expectation in post office
saving schemes
08 17.5
Time value of money 11 6.66
TOTAL 120 100
INTERPRETATION
From the above we can analyze that the respondents has a high level of preference towards Bank
savings followed by Post Office Savings and other investment options. However in contradiction
about 60.83% respondents invest in Post Office savings with preference towards RD
investments. The reasons for this according to the survey are better relationship with the
agents,tax free interest provided by the bank, past experiences with the Schemes and the power
of fulfilling various personal expenses after maturity of the schemes. Since it is an investment
with the Government majority of respondents feel display a high level of confidence in these
schemes. However lack of awareness about the schemes, attractiveness in the schemes and lack
of advertisement are the areas which need attention by the Government for increasing
investments by Puneities in Post office saving Schemes.
CONCLUSION
It is concluded that though the role of Indian Post Office whichhas a large history and has been
inductedinto the minds of everyIndians, still it requires some sort of feeding. Post offices
perform their work efficiently and effectively with reference to rural investments. Hence, the
postalinvestments and rural savings have a dual role to play. Primarily they undertake the
responsibility of savings ofIndia postal investors and secondly they help the nation to generate
the necessary funds resulting in the societiesgetting overall benefitsA prime role should alsobe
played by the private corporate in order to induce with freshblood for its survival.

7. ZENITH International Journal of Business Economics & Management Research__________ ISSN 2249- 8826
ZIJBEMR, Vol.5 (6), JUNE (2015)
Online available at zenithresearch.org.in
329
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