Now FD is not the first choice, investors are taking risks for higher returns.
FD and Mutual Fund: FD is a traditional way of investment. Earlier people used to like to invest in this because there is no risk in it. But now people want to invest by taking risks so that their money is not only safe but also increases.
FD and Mutual Fund: People's interest in bank FD is now seen to be decreasing. People now want to increase their money by taking risks. That's why they are moving towards mutual funds and the stock market. We are not saying this, the Reserve Bank figures are telling.
Reserve Bank figures
According to the Reserve Bank data, people's share in bank term deposits (FD, RD, etc.) was 50.54% at the end of FY 2020, but at the end of FY 2025, it has come down to 45.77%. This means that people are no longer depositing as much money in banks as before.
Repo rate
The Reserve Bank had reduced the repo rate by 115 basis points (1.15 percentage points) between March 2020 and May 2022 during the Covid pandemic. But later it was increased to 225 basis points.
The Reserve Bank recently started reducing interest rates. It has cut 25 basis points in February, 25 basis points in April and 50 basis points earlier this month.
A Reserve Bank paper in December 2024 said that the way savers save is changing. In the year 2019, 17.8% of Indian households invested in risky assets. At the same time, this figure was 15.7% in the year 2022.
Change in savings portfolio
Reserve Bank data shows that the share of individuals in savings deposits has remained stable at around 77% over the last five years. This means that people are still keeping money in savings accounts. They are also investing heavily in mutual funds.
Mutual Funds
According to a research paper by economists of the Reserve Bank, a change has been observed in the financial savings portfolio of Indian families, people are now investing their savings in different places. The share of deposits in banks has decreased over time, while investments in insurance and mutual funds have increased to a great extent.
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