Archive · 2 Jan 2026
Indian Investors Shift from Deposits to Equities in 2025
In 2025, Indian investors moved their money from bank deposits and insurance to stocks and mutual funds.
The stock market didn't do great overall, but some mid-cap funds still made good returns.
Banks lowered interest rates on deposits, so people put more money into mutual funds and stocks instead.
Households also saved more in cash.
The government kept interest rates the same for small savings schemes.
This shows that people are looking for higher returns and are willing to take more risks with their money.
The Nifty 50 index returned 10.5% in 2025, while the Nifty Midcap 150 and Nifty Smallcap 250 returned 5.4% and -6% respectively.
Top-performing mid-cap mutual funds delivered returns ranging from 5% to 12% in 2025.
Household bank deposits declined by 8.97% in FY25, while investments in life insurance funds dropped by 17.3% and small savings schemes saw inflows shrink by nearly 24%.
Direct equity investments surged by 153% and mutual fund inflows jumped by 95% in 2025.
The share of bank deposits in household financial savings fell from 40.9% in FY21 to 35.2% in FY25, while mutual funds' share increased from 2.1% to 13.1%.
The RBI lowered the policy rate by 125 basis points in 2025, leading to reduced returns on deposits and prompting households to seek higher-yielding investment avenues.
- Who
- Indian investors and households
- What
- Shift from traditional fixed-income products to equities and mutual funds
- When
- Calendar year 2025 and FY25
- Where
- India
- Why
- Due to lower interest rates on fixed-income products and higher returns from market-linked assets
- Nifty 50 return in 2025
- 10.5%
- Nifty Midcap 150 return in 2025
- 5.4%
- Nifty Smallcap 250 return in 2025
- -6%
- Domestic institutional investors (DIIs) flows in 2025
- $90.1 billion
- Top mid-cap fund return in 2025
- 12%
- Household bank deposits decline in FY25
- 8.97%
- Investments in life insurance funds decline in FY25
- 17.3%
- Small savings schemes inflows decline in FY25 (excluding PPF)
- 24%
- Direct equity investments surge in 2025
- 153%
- Mutual fund inflows jump in 2025
- 95%
- Currency holdings rise in 2025
- 77.6%
- Bank deposits share of household financial savings (FY21 to FY25)
- 40.9% to 35.2%
- Mutual funds share of household financial savings (FY21 to FY25)
- 2.1% to 13.1%
- Direct equity holdings share of household financial savings (FY21 to FY25)
- 1.3% to 2.1%
- RBI repo rate reduction in 2025
- 125 basis points
- Post Office savings deposit interest rate (Jan-Mar FY26)
- 4%
- 5 Year Time Deposit interest rate (Jan-Mar FY26)
- 7.5%
- Senior Citizen Savings Scheme interest rate (Jan-Mar FY26)
- 8.2%
- Public Provident Fund Scheme interest rate (Jan-Mar FY26)
- 7.1%
- Kisan Vikas Patra interest rate (Jan-Mar FY26)
- 7.5%
- Sukanya Samriddhi Account interest rate (Jan-Mar FY26)
- 8.2%
Sources
Forget inflation! Small-cap mutual funds failed to beat bank FD returns in 2025. Details here
Households ditch deposits as rate cuts push savings towards equities, mutual funds
These top-performing mid-cap mutual funds delivered up to 12% returns in 2025: Check the list
SIP or lump sum in 2026? What 30 year data tells investors about mutual fund investment pattern
