Archive · 6 Sep 2026
India’s Household Savings Shift From Banks Toward Markets
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.
Bank deposits’ share of household financial savings fell from 52% in FY71-80 to 33% in FY25.
Provident and pension funds, mutual funds, shares and debentures together accounted for 39% of savings in FY25.
Mutual funds, shares and debentures rose to 18% of savings in FY25, overtaking life insurance at 17%.
Managed investments grew at about 17.5% annually between March 2020 and March 2025, compared with 11.7% for bank deposits.
India’s household wealth remains concentrated in physical assets, with about 68% held in gold and real estate in FY25.
- Who
- Indian households, investors and financial institutions, as discussed in a Franklin Templeton India Mutual Fund report.
- What
- Household savings are shifting from bank deposits and physical assets toward pensions, provident funds, mutual funds and other market-linked products.
- When
- The comparison covers FY71-80 through FY25, with additional growth figures through March, May and June 2026 and July 2026.
- Where
- India.
- Why
- Digital financial infrastructure, rising incomes, retail participation, systematic investment plans and younger investors are helping households access market-linked products.
- 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%.