Indian Households Shift Savings to Market Investments, Report Reveals

A recent ASSOCHAM report highlights a shift in Indian households' financial behaviors, showing a reduced growth rate in savings deposits with banks post-COVID, as more investments flow into equities and mutual funds. Despite the slowdown, savings deposits have steadily increased over the past decade, supported by financial inclusion efforts.

In the years following the COVID-19 pandemic, Indian households have increasingly diversified their financial savings, favoring market-linked investment instruments such as equities and mutual funds over traditional savings deposits. This paradigm shift is detailed in the latest ASSOCHAM Global Research report.

The report, titled 'Pattern of Savings Deposits with Scheduled Commercial Banks in India', notes a significant deceleration in the growth of savings deposits. From the fiscal years 2020-21 to 2024-25, the average annual growth was recorded at 8.6%, a notable drop from the 14.8% seen during 2015-16 to 2019-20. Nevertheless, the report emphasizes that this moderation is indicative of evolving household financial behavior rather than a weakening deposit base.

Despite this shift, total savings deposits have shown steady growth, boasting a cumulative increase of nearly 374% over the past 15 years. With financial inclusion, enhanced banking access, and digital banking adoption playing pivotal roles, India's savings deposit system continues to remain robust and well-poised for future expansion.