Financial literacy has become increasingly important as individuals face a wider range of savings and investment products, digital investment platforms and market information. This paper examines the relationship between financial literacy and investment decisions, with particular emphasis on the Indian context. The study adopts a secondary-research design and synthesizes evidence from peer-reviewed academic studies, reports of Indian financial regulators and international financial-literacy research. Financial literacy is examined as a multidimensional construct comprising financial knowledge, financial awareness, financial attitudes, financial behaviour, risk understanding and long-term planning ability. The review indicates that financially literate individuals are generally better positioned to compare investment alternatives, understand risk and return, diversify portfolios, plan for long-term objectives and resist purely emotion-driven decisions. Indian evidence also indicates that socioeconomic characteristics such as education, income, gender, age, location and sources of financial information are associated with differences in financial literacy and investment choices. Recent regulatory evidence further indicates that market participation is increasing while substantial gaps remain in securities-market knowledge. Behavioural biases such as herding, overconfidence, framing and heuristic decision-making can weaken the positive effect of knowledge when investors act on social influence or unreliable information. The paper argues that financial literacy should therefore move beyond awareness campaigns toward practical, goal-based and behaviour-oriented financial education. The study concludes with implications for regulators, educational institutions, employers, financial institutions and individual investors.

Anshul Kamraj Rodge, Prof. Dr. Ujwala Narkhede, "Financial Literacy and Investment Decisions" International Journal of Scientific Research and Engineering Development, V9(5): Page(1268-1277) September - October 2026. ISSN: 2581-7175. www.ijsred.com. Published by Scientific and Academic Research Publishing.