India’s savers are moving from deposits to funds. What it means for a large portfolio
Deposits’ share of household savings fell from 40.9% to 35.2% in four years while funds and shares grew. For families with crores in fixed deposits, the tax gap is the bigger story.
Was this forwarded to you? Sign up to get Compound in your inbox.
Every year RBI estimates where Indian households put their financial savings: bank deposits, insurance, provident funds, small savings schemes, mutual funds and shares. The mix has changed more in the last five years than in the decade before.
What the numbers show
| Share of household financial savings | FY21 | FY25 |
|---|---|---|
| Bank deposits | 40.9% | 35.2% |
| Share of household financial savings | FY12 | FY25 |
|---|---|---|
| Shares and mutual funds | about 2% | 15.2% |
The second figure is from the Economic Survey 2025-26. The first is RBI data as reported in the press; the two series use slightly different definitions, so read them side by side, not as one table.
Fewer deposits, not less saving
In FY25 the money households added to bank deposits fell 8.97% to ₹12.54 lakh crore. Fresh money into life insurance fell 17.3% to ₹5.3 lakh crore. Over the same period the number of demat accounts kept climbing: SEBI counted 22.5 crore at the end of March 2026, 4.4 crore at NSDL and 18.0 crore at CDSL. Many people hold more than one.
The tax gap at the top slab
For a family in the 30% bracket, interest and gains are taxed very differently.
| ₹1 crore for one year | Taxed at | Tax on the return |
|---|---|---|
| Fixed deposit at 7% (₹7 lakh interest) | 30% slab + 4% cess | about ₹2.18 lakh |
| Equity fund held over 12 months, ₹7 lakh gain | 12.5% above ₹1.25 lakh | about ₹0.72 lakh |
Surcharge raises the deposit figure further above ₹50 lakh of income. The two are not the same risk: the deposit’s ₹7 lakh is certain and the fund’s is not. The point is that at large balances the after-tax gap is big enough to plan around.
What it means for your own split
- Match money to when you need it. Cash for the next two or three years belongs where its value does not swing; money for ten years can take more.
- Look at where interest lands. Interest in the name of a family member in a lower bracket is taxed at their rate, within the clubbing rules.
- Count everything in one place. When savings sit across several banks, folios and two depositories, the real split is hard to see. That is the problem Reva was built for.
Questions
- What share of household savings goes into bank deposits?
- 35.2% of household financial savings in FY25, down from 40.9% in FY21, according to RBI data as reported in the press.
- How much of household savings goes into shares and mutual funds?
- 15.2% in FY25, up from about 2% in FY12, according to the Economic Survey 2025-26.
- How is FD interest taxed compared with equity gains?
- FD interest is taxed at your slab rate (30% plus cess at the top). Long-term equity gains are taxed at 12.5% above ₹1.25 lakh a year.
- How many demat accounts are there in India?
- SEBI counted 22.5 crore at the end of March 2026: 4.4 crore at NSDL and 18.0 crore at CDSL.
Sources
- Business Standard: Stocks, mutual funds gaining fast as savers shift allegiance from banks
- The Crossbill: RBI flags fall in household bank deposits as savings shift to stocks, mutual funds
- SEBI Monthly Bulletin, April 2026
Compound is analysis, not investment advice. Reva Money is not a SEBI-registered investment adviser.
