Investment: The craze of bank FD is decreasing, people are ready to take risk for higher returns, they are investing in these places..

The popularity of bank FDs is decreasing. Indian people are now investing in other places instead of depositing money in the bank. They are investing in places like mutual funds and the stock market. This is because these places are giving more benefits than the bank. This information has been revealed by the data of the Reserve Bank of India (RBI).

According to the data of the Reserve Bank, the share of people in bank term deposits (FD, RD, etc.) was 50.54% at the end of FY 2020. At the end of FY 2025, it decreased to 45.77%. This means that people are no longer depositing as much money in banks as before.

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Change in interest rates
During this time, there has been a change in interest rates. According to the Economic Times, the Reserve Bank had reduced the key repo rate by 115 basis points (1.15 percentage points) between March 2020 and May 2022 during the Covid pandemic. Then later it was increased by 225 basis points. Recently, the Reserve Bank has started reducing interest rates. It cut rates by 25 basis points in February, 25 basis points in April, and 50 basis points earlier this month. Overall, interest rates have come down by 1 percentage point.

Increased share in mutual funds

Reserve Bank data shows that the share of individuals in savings deposits has remained stable at around 77% over the past five years. This means that people are still keeping money in savings accounts. They are also investing heavily in mutual funds. As of April, 91% of the 23 crore mutual fund accounts belong to individuals. In May 2021, this figure was just over 10 crore. This information has been received from the data of the Association of Mutual Funds in India (AMFI).

Saving differently

According to a research paper by Reserve Bank economists, a change has been observed in the financial savings portfolio of Indian families. This means that people are now investing their savings in different places. The share of deposits in banks has decreased over time, while investment in insurance and mutual funds has increased.

This is also the reason for the decline

IDFC Bank Chief Economist Gaura Sengupta said that the reason for the decline in deposits is that people's savings are decreasing and they are investing more money in other investment options like the stock market.

Assets under management of mutual funds increased to Rs 69.50 lakh crore as on April 30. At the end of FY 2020, it was Rs 22.26 lakh crore. This means that people's investment in mutual funds has increased very rapidly. Bank of Baroda chief economist Madan Sabnavis said this is because of the market, but not necessarily because of demographics.

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