Savings deposits in Indian commercial banks rose to ₹65.3 lakh crore by FY2025, marking a 374% increase since 2011. While the deposit base remains a vital funding source for banks, annual growth has slowed to 3.5% as households increasingly shift their savings into equity markets and investment funds.
Detailed Coverage
Indian scheduled commercial banks have seen their savings deposit base expand significantly over the past 15 years, reaching ₹65.33 lakh crore in the 2024-25 financial year. This represents a nearly fivefold increase from the ₹13.77 lakh crore recorded in FY2010-11, according to recent industry data. The growth was primarily driven by the expansion of banking networks into smaller towns and the rapid adoption of digital banking services.
Domestic Banks Lead Deposit Mobilization
Domestic Indian banks have been the primary beneficiaries of this growth, largely due to their massive physical branch presence and government-backed financial inclusion initiatives like the Pradhan Mantri Jan Dhan Yojana. These institutions reported a 384% rise in savings deposits over this period. In contrast, foreign banks in India, which largely concentrate on high-net-worth wealth management and corporate banking, saw a much smaller growth of 49% in their savings deposit portfolios.
The Shift Toward Market Investments
Despite the long-term rise in bank deposits, the recent trend indicates a change in how Indian households manage their wealth. There is a clear move toward higher-risk, market-linked products. Data shows that the share of equities and investment funds within total household financial assets climbed to 23% by March 2025, up from 15.7% in March 2019. This matches the broader trend of rising retail participation in the stock market, with the total number of equity investors jumping from 3.1 crore in FY20 to more than 11 crore by FY25.
Cooling Growth Rates for Banks
While the total deposit amount is historically high, the speed at which it is growing has slowed down. Annual growth in savings deposits averaged around 14.5% during the first decade of this 15-year period. However, in the years following the pandemic, this growth rate fell to 8.6%. Specifically, the growth recorded in FY2024-25 was 3.5%, the slowest pace observed in the last decade and a half.
For banks, savings deposits are a crucial, low-cost source of money used to fund loans. The fact that the household sector still holds 60.2% of all bank deposits as of March 2025 suggests that these accounts remain a foundational part of personal finance in India. Moving forward, investors may monitor how banks adjust interest rates on savings accounts to compete with the attractive returns offered by capital markets, and whether the moderation in deposit growth persists as the preference for equity investments continues to rise.