Higher interest rates in the long term deposits encouraged more people to invest in them.
The growth of bank deposits in India delayed up to 10.6 percent on an annual basis in the financial year ending on March 2025 compared to 13 percent in the previous tax, according to new data released by the reserve Bank of India (RBI).
Despite the slower growth, the total deposit -based basis remains strong. Tero deposits continued to make up for the largest share of total deposits, accounting for 59.5 percent from March 2025. This was slightly lower than the 60 percent registered in the previous year. Saving deposits saw a fall in the share to 29.1 percent of 30.8 percent in March 2024 and 33 percent in March 2023. However, current deposits remained stable with 9.8 percent.
The RBI data showed a clear trend of increasing preference for term deposits in recent years. Higher interest rates on these deposits encouraged more people to invest in it. The RBI said: “Almost 68.4 percent of the term deposits had the original maturity of one to three years as on March 2025”.
The share of term deposits that increased the interest rates of 7 percent and higher in March 2025 also increased considerably to 72.7 percent of 64.2 percent in March 2024 and 33.5 percent in March 2023.
Large deposits also grew. Term deposits of £ 1 crore and higher formed 45.1 percent of the total term deposits in March 2025, an increase of 43.7 percent in the previous year.
RBI also noted that households remained the most important contributors to bank deposits, accounting for 60.2 percent of the total in March 2025. In this, female deposits had a share of 20.7 percent. The deposits of seniors were 20.2 percent of the total deposits.
It also emphasized that growth varied per region. Bank branches in metropolitan areas saw the highest deposit growth at 11.7 percent in March 2025. Rural areas registered 10.1 percent growth, semi-urban areas 8.9 percent and urban centers 9.3 percent.
The RBI data suggests that although the overall deposit growth remains healthy, there is a shift in deposit composition, whereby term deposits achieve more popularity as a result of higher returns.
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Published on 2 June 2025
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