MUMBAI: India's deposit landscape has undergone a marked transformation over the past four years, with savers increasingly moving money out of low-yield savings accounts into higher-return term deposits, while banks have stepped up efforts to attract overseas funds amid intense competition for resources.
According to the Reserve Bank of India's (RBI) latest Annual Basic Statistical Return on Deposits report, the share of savings deposits in aggregate bank deposits fell to 28.7 per cent in March 2026 from 34.6 per cent in March 2022, reflecting changing depositor preferences in a higher interest-rate environment.
Fixed tenure
In contrast, the share of term deposits rose to 61.6 per cent from 55.2 per cent during the period, indicating that customers were increasingly willing to lock in funds for fixed tenures in exchange for better returns.
The changing composition highlights the growing preference among savers for yield over liquidity, a trend that has prompted banks to offer competitive rates to mobilise deposits and support credit growth.
The report also showed the rising importance of large-ticket deposits, with accounts of Rs1 crore and above accounting for 46.3 per cent of total term deposits as of March 2026, underscoring the growing concentration of funds among high-value depositors.
Alongside the shift in domestic deposits, banks have also intensified efforts to tap overseas money through non-resident deposit schemes.
FCNR (B) deposits
The Reserve Bank recently relaxed interest-rate ceilings on FCNR(B) and NRE deposits and announced a special swap facility to encourage foreign currency inflows, helping lenders diversify their funding sources.
The changing deposit profile comes at a time when banks are grappling with a persistent gap between credit growth and deposit mobilisation. As lending demand remains robust, competition for deposits has pushed banks to recalibrate their liability strategies, with higher-yielding term deposits and overseas funds emerging as increasingly important sources of financing.
The trends point to a gradual reshaping of India's deposit base, with savers prioritising returns and banks broadening their hunt for funds beyond traditional low-cost deposits.
