India Savings Deposits Slow as Investors Shift to Equities
By ThePip Desk
Discover why India’s savings deposit growth is slowing post-Covid, as households increasingly invest in market-linked products like stocks and mutual funds.
A new study reveals a notable slowdown in the growth of India’s savings deposits with Scheduled Commercial Banks following the Covid-19 pandemic. This shift indicates a broader trend of households redirecting their financial savings towards market-linked investment products.
Moderation in Deposit Growth
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) study highlights a significant moderation in the average annual growth rate of these deposits. While the overall deposit base has expanded considerably over the past fifteen years, the pace of growth has decreased in recent times.
- Overall deposit base increased by 374% from ₹13.77 lakh crore in FY2010-11 to ₹65.33 lakh crore in FY2024-25.
- Average annual growth in savings deposits:
- 8.6% during FY2020-21 to FY2024-25.
- 14.8% during FY2015-16 to FY2019-20.
- 14.4% from FY2010-11 to FY2014-15.
- Indian banks held 99.1% of total deposits in FY2024-25.
ASSOCHAM clarifies that this deceleration does not signify a weakening of the banking system or a loss of confidence. Instead, it points to a maturing financial ecosystem where Indian households are increasingly exploring diverse investment avenues beyond traditional bank deposits.
The Shift to Market-Linked Products
The primary force behind this trend is a noticeable change in how households manage their investments. Data from the Reserve Bank of India (RBI) and market participation figures underscore this growing preference for equity and investment funds.
- India’s retail investor base surged from approximately 3.1 crore in FY20 to over 11 crore by FY25.
- The share of equity and investment funds in total household financial assets rose from 15.7% in March 2019 to 23% by March 2025.
- Assets managed by mutual funds reached 23% of GDP by FY26, as recorded in November 2025.
Historically, policy initiatives such as financial inclusion programs launched since 2014 and demonetisation in 2016 significantly boosted deposit mobilization. The Covid-19 pandemic also led to a 16.1% increase in savings deposits during FY2020-21, driven by precautionary savings behavior. ASSOCHAM anticipates that India’s savings deposit base will remain large and resilient, supported by ongoing financial inclusion, digital banking adoption, and sustained household participation in the formal financial sector, even with diversification.