Mutual funds came at sixth place (9.7 per cent), followed by stocks (8.1 per cent), pension schemes, company deposits, debentures, derivatives and commodity futures (1 per cent) as investment vehicles for the urban households.
Among the rural households, not even one per cent of the survey respondents were investors, while even the awareness about mutual funds and equities was dismal at just 1.4 per cent.
However, 95 per cent of rural survey respondents had bank accounts, 47 per cent life insurance, 29 per cent post office deposits and 11 per cent saved in precious metals.
On a positive note, the survey found the investor base in India is increasing as nearly 75 per cent of the investors in the Sebi Investor Survey 2015 participated in the securities markets for the first time within the last five years.
The survey was commissioned in the year 2015 and got completed last year, while its results were released today by the capital markets regulator. Nielsen, a global leader in primary research, has conducted and analysed this Sebi survey.
The last survey was conducted in 2008-09.
Sebi said the survey first listed a set of 2,04,694 households and basic information about demographics, income, savings and investments were collected.
In the second step, a subset of 50,453 amongst these listed households were chosen to conduct the final survey.
The data was used to create an estimate of the total number of investing households at the end of 2015.
Using a bootstrapping methodology project, it was estimated that there were a total of 3.37 crore investor households in India. Of these, 70 per cent (2.37 crore) reside in urban areas while the other 1 crore were rural households.
Among these, mutual funds were the most popular investment instruments with nearly 66 per cent (or 2.2 crore households) investors. There were an estimated 1.9 crore households which invested in equities and 77 lakh household which invested in bonds (public, private and PSU).
Among derivative instruments, there were 30 lakh equity and currency derivatives investors and 21 lakh investors in commodity futures.
Amongst the equity investors, about 18 per cent(33 lakh) had invested in the primary (IPO) markets.
In his foreword, Sebi's former Chairman U K Sinha, during whose tenure the survey was conducted, said the global financial crisis and its effect were felt in India since the last survey (held in 2008-09) and it was imperative for policy makers to understand the change in investor behavior as an effect of it.
"The detailed main survey has been informed by state-of-the-art research in behavioral finance (the overlap of finance and psychology) to provide insights into not just the actions of investors but also their perceptions which lead to action.
"While some insights received from the surveys have been expected, others have been surprising. However, that is the purpose of these studies - to gain the insights and to act upon them."
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)