In a developing nation like India, initiatives for financial education are still very nascent stage, nevertheless financial literacy has turned into a key factor in determining how individuals make investment decisions in an ever more digital and financially complex environment. The research aims to focus on the role that the three main aspects of financial literacy, financial attitude, financial behavior, and financial security play in investment choices and evaluate the mediating effect of financial knowledge. The quantitative, cross-sectional research design was used. The primary data was gathered using a structured questionnaire that was designed to be filled by 272 individual retail investors in Bhubaneswar (Odisha, India). The survey was collected during a national-level entrepreneurship event, Utkarsh Odisha, held in Bhubaneswar on 28–29 January 2025. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to examine direct and moderating relationships using the collected data which demonstrates that financial behavior (p = 0.005) and financial security (p = 0.028) and financial attitude (p = 0.039) positively influence investment decisions. Financial knowledge plays a key role in mediating all the financial literacy dimensions on the investment decisions and enhances their effects, which implies that better-informed investors make more decisive and sound investment decisions. The research concludes that the importance of financial education as the determinant of better investment results and financial well-being, long-term economic stability, and less financial vulnerability.