12 hrs ago

India’s Household Savings Shift From Banks Toward Markets

India's ₹100 household savings puzzle: ₹33 goes to banks, while ₹39 flows to pension funds and markets · livemint.com

Indian families are putting their savings in more types of financial products than before.

Bank deposits are still important, but their share has fallen over time.

More money is going into pensions, provident funds, mutual funds and shares.

Together, these products received 39 out of every ₹100 of household financial savings in FY25.

Mutual funds have grown quickly as more people use digital services and systematic investment plans.

Younger investors and rising incomes are also helping this change.

However, Indian households still hold most of their wealth in physical assets such as homes, land and gold.

The report says digital systems such as UPI, Aadhaar-enabled e-KYC and Account Aggregator make investing easier.

India’s financial markets are growing, but they remain less developed than those in some other countries.

Key facts

Bank deposits: Their share of gross household financial savings declined from 52% in FY71-80 to 33% in FY25.
Market-linked savings: Mutual funds, shares and debentures accounted for 18% of household financial savings in FY25.
Retirement-oriented savings: Provident and pension funds represented 21% of household financial savings in FY25.
Combined share: Provident and pension funds, mutual funds, shares and debentures together accounted for 39% in FY25.
Managed investment growth: Managed investments grew at a compound annual rate of about 17.5% from March 2020 to March 2025, versus 11.7% for bank deposits.
Household assets: About 68% of household wealth was estimated to be in physical assets in FY25, including 10-12% in gold and 57-60% in real estate.
Mutual fund assets: Mutual fund AUM rose from ₹35.32 lakh crore in July 2021 to ₹85.76 lakh crore in July 2026, a CAGR of about 19%.

livemint.com · 13 hrs ago