A Study on Risk Appetite on Investment Behaviour of Young Investors at HDFC

Abstract

Investment behaviour among young investors is shaped significantly by their risk appetite—the degree of financial uncertainty they willingly accept in pursuit of returns. HDFC Bank, India's largest private sector bank, serves a rapidly growing cohort of young retail investors through its investment products spanning mutual funds, equities, fixed deposits, and insurance-linked instruments. This paper investigates how risk appetite influences investment decision-making among young investors (aged 20–35 years) associated with HDFC Bank across Hyderabad. A mixed-methods approach combining structured questionnaire data from 100 respondents with secondary analysis of HDFC investment product literature reveals that risk tolerance is strongly correlated with income level, financial literacy, and investment horizon. Findings indicate that high-risk appetite investors gravitate toward equity mutual funds and direct equities, while risk-averse young investors prefer fixed deposits and recurring deposits despite lower real returns. The study identifies financial literacy gaps, peer influence, and loss aversion as key behavioural drivers. Recommendations include personalised robo-advisory services, risk profiling at account opening, and financial literacy programmes to align investment choices with individual risk profiles.