India is witnessing a massive rise in the number of people participating in its financial market. This surge is mainly driven by the country’s young population, also known as the millennials (people in the age group of approx 23-40 years), who are willing to set aside a large chunk of their disposable income towards stock markets. There are so many people entering the stock markets that it is almost redefining how investments are made!
Armed with smartphones and easy access to multiple online investment platforms, young investors find it easy to open a Demat account today.
Why Are Millennials Embracing Demat Accounts?
Millennials know how to make the most of technology! Be it online shopping, ride-sharing, or even investing, they are constantly exploring newer ways of spending and earning money. The younger population is gradually moving away from investment choices like fixed deposits to explore stock markets. This is primarily due to the potential of stock markets to fetch significantly higher long-term returns. People are also tapping into the easy availability of multiple online resources to learn about stock markets and gain a better understanding of investing strategies.
With Demat accounts, you can enjoy the convenience of tracking your portfolios online, even when you are on the move. With just a few clicks, you can access your Demat account, check the stock markets, and trade or invest as needed. Online trading platforms like Sharekhan are further making investing more seamless with added features like research, technical charts, etc.
Record Growth in Demat Accounts
The growth in Demat accounts has been staggering, especially in the last few years. India’s total number of Demat accounts rose by over 40 lakh in August 2024, crossing the 17 crore mark. This is as per the data published by the National Securities Depository (NSDL) and Central Depository Services (CDSL).
This surge is primarily driven by the significant increase in Initial Public Offerings (IPOs) entering the market. An IPO is when a company offers its shares to the public for the first time. Many millennials subscribe to IPOs to potentially benefit from listing gains. This is also one of the reasons why companies are witnessing their IPOs being oversubscribed multiple times.
Why Millennials Are Turning to the Stock Market
Today’s younger generation prefers to take on slightly more risk to fetch higher returns from their investment. Traditional saving options such as fixed deposits or savings accounts are safer investment avenues, but they offer relatively low returns. However, the stock markets offer opportunities to make higher returns, provided you have a higher risk tolerance. If you’re someone who’s looking to grow your wealth, you might find the stock market far more appealing than parking your money in low-interest savings accounts.
Additionally, social media and online platforms have played a significant role in spreading financial knowledge. Today, if you wish to gain an understanding of the stock markets, you can simply scroll through platforms like Instagram, YouTube, or financial blogs. You can learn how to invest, diversify your portfolios, and even navigate the stock market by going through some expert-curated financial blogs, like the ones on Sharekhan.
How Millennials’ Investment Choices Are Shaping the Market
Millennials aren’t just active in the stock market; they’re influencing the direction in which the markets are moving. For instance, as a millennial investor, you may be inclined to explore sectors like technology, renewable energy, and e-commerce, which align with your interests. That’s why such sectors have seen strong demand in recent years.
Another indication of how millennials are shaping the direction of financial markets is the rise of passive investment options such as exchange-traded funds (ETFs). ETFs let you spread your risk by investing in a basket of stocks. These offer diversification without the complexities of individual stock-picking. This shift towards more accessible and cost-effective investment options is further changing the way the stock market operates.
The Future of Investing: Will Demat Accounts Continue to Rise Among Millennials?
As India’s financial ecosystem continues to evolve and the stock markets indicate positive signs of growth, the popularity of Demat accounts is here to stay. Today, the stock market is no longer reserved for a select few; it is now a mainstream option for anyone looking to grow their wealth. With a rising number of fintechs and a growing interest in wealth-building, millennials are likely to be at the forefront of shaping the future of investing in India.
If you're looking to learn more about opening a Demat account and making the most of your investments, visit Sharekhan for helpful resources and expert advice.
