Financial literacy is increasingly important as retail investors gain easier access to equities, mutual funds and digital investment platforms. This study examines the relationship between financial literacy and investment decision-making among retail investors, with emphasis on India. A secondary-data analytical design is used, drawing on SEBI's Investor Survey 2025, Reserve Bank of India (RBI) evidence, OECD/INFE frameworks and peer-reviewed empirical studies. The evidence shows that financial literacy is broader than financial knowledge alone and includes attitudes, behaviour, skills and risk understanding. SEBI's 2025 survey covered more than 90,000 households and reported that 63% of households were aware of securities-market products, while only 9.5% were invested in them. Only 36% of investors were classified as having high or moderate securities-market knowledge. Prior empirical studies generally report a positive association between financial literacy and investment decision quality, participation, diversification and risk assessment, while behavioural biases and social influence can weaken this relationship. The study concludes that financial literacy can improve the quality of investment decisions, but education should be practical, continuous and linked to actual investment choices rather than delivered only as one-time information.

Mohit Babanrao Manwar, Dr. Ujwala Narkhede, "Impact of Financial Literacy on Investment Decisions of Retail Investors" International Journal of Scientific Research and Engineering Development, V9(5): Page(1162-1170) September - October 2026. ISSN: 2581-7175. www.ijsred.com. Published by Scientific and Academic Research Publishing.