A new report by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) reveals a notable shift in Indian household investment behavior. While savings deposits with Scheduled Commercial Banks (SCBs) have steadily grown over the past 15 years, the pace has moderated significantly since the Covid-19 pandemic. This slowdown is primarily attributed to households increasingly diversifying their financial assets into market-linked instruments such as equities and mutual funds.
Moderation in Deposit Growth Rates
The report, titled 'Pattern of Savings Deposits with Scheduled Commercial Banks in India,' highlights a clear trend. The average annual growth in savings deposits slowed to just 8.6% during the FY2020-21 to FY2024-25 period. This contrasts sharply with the 14.8% average annual growth recorded from FY2015-16 to FY2019-20, and 14.4% during FY2010-11 to FY2014-15.
ASSOCHAM emphasizes that this moderation should not be seen as a weakening of the banking system or a decline in household confidence in deposits. Instead, it signifies a maturing financial ecosystem where individuals continue to maintain bank savings while allocating a larger proportion of their financial assets to higher-yielding investment avenues.
Overall Deposit Base Continues to Expand
Despite the deceleration in growth rates, the overall savings deposit base has expanded substantially. According to the report, savings deposits with SCBs surged by 374%, from ₹13.77 lakh crore in FY2010-11 to ₹65.33 lakh crore in FY2024-25. Over the last decade alone, deposits grew by 158%, rising from ₹25.36 lakh crore in FY2015-16.
This long-term expansion is credited to several factors, including stronger financial inclusion initiatives, deeper banking penetration, increased household participation in the formal financial system, and the rapid adoption of digital banking services across the country.
Indian Banks Dominate the Savings Market
Domestic banks continue to hold a dominant position in India's savings deposit market. In FY2024-25, Indian banks held ₹64.77 lakh crore, accounting for 99.1% of total savings deposits. Foreign banks, in comparison, held a mere ₹56,245 crore, representing 0.9% of the total. Over the past 15 years, deposits with Indian banks have grown by 384%, while foreign banks saw a cumulative growth of 49%, further solidifying the domestic sector's lead.
The Shift in Household Investment Behavior
The core reason for the moderated deposit growth lies in changing household investment preferences. Citing the Economic Survey 2025-26, the report notes a significant expansion in India's retail investor base, growing from approximately 3.1 crore in FY20 to over 11 crore by FY25. This highlights a burgeoning interest and participation in equity markets.
Furthermore, Reserve Bank of India (RBI) data indicates that the share of equity and investment funds in total household financial assets climbed from 15.7% in March 2019 to 23% by March 2025. Concurrently, assets managed by mutual funds have soared from less than 10% of GDP in the early 2010s to 23% of GDP by FY26 (as of November 2025), exceeding ₹80 lakh crore.
Policy Support and Future Outlook
Various policy initiatives have played a role in sustained deposit mobilization over the years. Financial inclusion programs launched since 2014 have broadened access to banking services, and demonetization in 2016 encouraged greater formalization of household savings. The Covid-19 pandemic also temporarily strengthened precautionary savings, leading to a 16.1% increase in savings deposits during FY2020-21.
Looking ahead, ASSOCHAM projects that India's savings deposit base will remain large and resilient. Continued financial inclusion, wider adoption of digital banking, supportive regulatory measures, and sustained household participation in the formal financial sector are expected to strengthen bank deposits, even as investors increasingly diversify into market-linked financial products.