Of the 510 employees surveyed by industry body Assocham, 58 per cent said they preferred shares and mutual fund schemes for investing their savings as these provided higher returns over a 2-3 year time frame.
The main reason for government employees to foray into stocks is the easy availability of advisory services by experts, the chamber said.
Massive investments in stocks and infrastructure have also lured government employees, who are tilting toward the capital market instead of traditional channels of investments like post offices, banks and fixed deposit schemes promoted by the government, it added.
"Despite the stock market being volatile, government employees are willing to take the risk. They are now focusing on investing in stock markets rather than in traditional instruments like post offices, banks and PPF," Assocham Secretary General D S Rawat said.
Assocham said equity linked mutual fund schemes, infrastructure mutual funds and systematic investment plans are gaining popularity among government employees, adding that 37 per cent of the respondents chose growth funds for higher returns compared to other mutual funds.
A majority of employees surveyed said they received returns between 10-20 per cent on mutual funds.
About 42 per cent of the respondents said they were keen to invest in shares of infrastructure, real estate, IT and auto companies as these gave them lucrative returns in a short span of time. However, 32 per cent of the employees surveyed said they still preferred the traditional routes of investments as they assured them of safe returns.