Financial Literacy of Millennials in Bengaluru: Levels, Educational Gradients and Links to Investment Behaviour

Abstract

Purpose: This study assesses the level of financial literacy among millennials in Bengaluru, India, examines whether it varies with educational qualification, and tests its association with investment behaviour. It also identifies the underlying dimensions that structure millennials’ financial literacy.

Design/methodology/approach: A descriptive, cross-sectional survey was administered to 150 millennials (born 1981–1996) selected through convenience sampling. A 15-item instrument (Cronbach’s α = .842) captured financial knowledge, saving behaviour, investment awareness and financial planning. Data were analysed in SPSS using percentage analysis, descriptive statistics, Pearson’s chi-square test with Cramér’s V, Spearman’s rank correlation, Pearson’s correlation and exploratory factor analysis.

Findings: Half the respondents displayed moderate financial literacy, 30% high and 20% low (M = 68.45, SD = 12.56). Educational qualification was significantly associated with literacy level, χ²(4, N = 150) = 15.53, p = .004, Cramér’s V = .23: the share of highly literate respondents rose from 20.0% among undergraduates to 42.5% among professional-degree holders, while low literacy fell from 36.0% to 5.0%. Financial literacy was strongly and positively correlated with investment behaviour (r = .68, p < .01), sharing 46% of variance. Four dimensions—financial knowledge, saving behaviour, investment awareness and financial planning—explained 68.38% of total variance, with financial knowledge the dominant dimension (27.50%) and financial planning the least consolidated (8.98%).

Practical implications: Formal education reduces the risk of low financial literacy but does not by itself produce high literacy. Workplace, curriculum-based and point-of-sale financial education aligned with India’s National Strategy for Financial Education should prioritise retirement, tax and long-term goal planning.

Originality/value: The study offers effect-size-based evidence on the educational gradient in financial literacy and its link with investment behaviour for millennials in India’s leading technology hub, a cohort and city that remain under-represented in the Indian financial literacy literature.