Explained: Stock Market or Mutual Funds – Where Are the Country's Gen Zs Making the Most Money?

Traditional investment methods in India are rapidly evolving. While previous generations preferred securing their hard-earned money in bank fixed deposits (FDs), the Public Provident Fund (PPF), or gold, the country's Gen Z (youth born between 1997 and 2012) is setting a new trend in financial decision-making. According to data from the National Stock Exchange (NSE), over 56% of new SIP registrants in the country are under the age of 30. Amidst the rise of smartphone connectivity, digital brokerage apps (such as Zerodha and Groww), and increasing financial literacy, Gen Z is focusing on 'wealth creation' rather than merely saving money. Meanwhile, the country's youth now prefer living in rented homes over investing in real estate, allowing them to enhance their lifestyles without compromising their financial freedom. Let us explore in detail where India's Gen Z is generating the most returns—whether in the stock market or mutual funds.How much does Gen Z invest?Studies by Groww and Zerodha indicate that young Indian professionals typically invest 15% to 20% of their monthly earnings in stocks. Smartphones play a crucial role for them, enabling them to track their investments and make real-time decisions.Investment portfolio and ticket sizeStudies also reveal that 'Zoomers' do not wait to accumulate a large sum of money before purchasing stocks; instead, they start with smaller amounts and invest consistently. On average, a Gen Z investor invests between ₹10,000 and ₹15,000 per month in the stock market—a figure referred to as the monthly ticket size.SIPs are their preferred investment optionStudies also show that young investors prefer Systematic Investment Plans (SIPs)—which allow for regular monthly payments of small, fixed amounts via the bank's Electronic Clearance Service (ECS). ECS enables automatic payments following a one-time authorization from the customer.How Gen Z invests across different asset classes:Although Gen Z investors tend to have a higher risk appetite, they invest in various financial instruments beyond just stocks—such as mutual fund schemes. Here is a breakdown of NSE data showing where young Indian investors allocate their savings:Gen Z Asset AllocationAsset Type Allocation Percentage What it meansEquity 47% Direct company shares and equity mutual fundsHybrid Investment 21% Plans combining safe bonds and riskier stocksSolution-Oriented Schemes 17% Mutual funds designed for specific long-term goalsDebt 11% Safe options like fixed-income instruments and government bondsOther Scheme Products 3% Other types of financial productsSource: NSEHow does Gen Z access financial information?Most Gen Z individuals rely on social media rather than books or college degrees to obtain financial information. According to researchers tracking user behavior on platforms like Zerodha, Groww, and Upstox, over 60% of investors under the age of 25 make decisions based on the opinions of financial experts shared via Instagram Reels, YouTube Shorts, and Telegram groups.Government warning regarding 'finfluencers'The Securities and Exchange Board of India (SEBI) has warned young investors about the risks associated with 'finfluencers' (financial influencers) who provide stock tips without a license. SEBI has recently taken strict action against several unregistered entities and online groups that provide misleading stock advice on social media platforms. To protect investors from fraud and enhance their financial literacy, firms like Zerodha and Motilal Oswal offer free educational sessions covering low-cost investment options, such as mutual funds.An expert, speaking on condition of anonymity, noted that while 'finfluencers' often portray investing as fun and easy, investors should verify the influencers' financial credentials and check whether they are registered with SEBI. NSE data reveals that participation in the market is not limited to Gen Z in major cities like Mumbai or Delhi; individuals from smaller cities and towns across India are also opening Demat accounts.Which states have the highest number of stock investors?NSE data indicates a manifold increase in the number of trading accounts opened. Maharashtra has the highest number of stock investors, given that Mumbai is the financial capital. Uttar Pradesh ranks second, with lakhs of young people investing in stocks. Gujarat holds the third spot, boasting a long history of stock trading.Over 25 crore Demat accounts in IndiaState Number of Registered Accounts ShareMaharashtra 4.2 crore 17%Uttar Pradesh 2.8 crore 11.30%Gujarat 2.2 crore 8.70%West Bengal 1.4 crore 5.80%Rajasthan 1.4 crore 5.80%Source: NSEDisclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.