India’s bank deposit growth eased to 10.6% in the financial year ending March 2025, down from 13% in the previous year, according to the Reserve Bank of India (RBI). Despite the slowdown, the total deposit base stayed robust, with term deposits continuing to dominate household savings.
Term Deposits Rule, Savings Accounts Decline
Term deposits made up 59.5% of all bank deposits in March 2025, slightly lower than 60% a year earlier. Savings accounts, however, saw their share drop to 29.1% from 30.8% in 2024, continuing a downward trend from 33% in 2023. Current accounts held steady at 9.8%, reflecting stable business activity.
The RBI noted that 68.4% of term deposits had maturities of one to three years, showing people’s preference for locking in funds for better returns. Higher interest rates drove this shift, with 72.7% of term deposits offering 7% or more in 2025, up from 64.2% in 2024 and just 33.5% in 2023.
Big Deposits Grow, Households Lead Savings
Large deposits of ₹1 crore or more accounted for 45.1% of term deposits in 2025, up from 43.7% the previous year. Households remained the backbone of deposits, contributing 60.2% of the total. Within this group, women held 20.7% of deposits, while seniors accounted for 20.2%, highlighting their reliance on safe, interest-earning options.
Cities Outpace Rural Areas in Deposit Growth
Metropolitan regions led deposit growth at 11.7%, followed by rural areas (10.1%), Urban Centres (9.3%), and Semi-Urban Zones (8.9%). This gap underscores the economic divide, with cities benefiting from higher incomes and better banking access.
Why Are Term Deposits Winning?
With banks offering higher rates to attract funds, savers are choosing term deposits over low-yield savings accounts. For example, a ₹1 lakh deposit at 7% earns ₹7,000 annually, compared to ₹2,000–3,000 in savings accounts. This trend helps banks secure stable, long-term funds for loans, but risks reducing disposable income for everyday spending.
The RBI’s data signals a cautious yet strategic approach by people prioritizing their savings safety and returns amid slower deposit growth. As rates stay high, term deposits will likely remain the go-to choice, reshaping how banks manage liquidity and lending in the coming years.
