Mumbai: Despite a record-breaking stock market and rising financial literacy, Indian households continue to favour traditional, low-risk avenues for parking their savings, according to the latest Reserve Bank of India (RBI) data on financial assets.
Bank deposits remain the most preferred channel, absorbing a massive ₹6.5 lakh crore, which accounts for 25.5% of total household financial savings. This trend underscores the deep-rooted preference for security and guaranteed returns, especially in a period marked by inflationary pressures and global economic uncertainties.
Close behind are EPF and pension funds, which collectively attracted ₹5.8 lakh crore, or 22.7% of savings. With increasing formalisation of the workforce and awareness of retirement planning, this segment has grown steadily over the years.
Life insurance continues to hold its strong foothold in Indian households, receiving ₹4.4 lakh crore (17.2%), reflecting both risk-cover needs and the enduring perception of insurance as a long-term savings instrument.
Government-backed small savings schemes like PPF, NSC and SCSS garnered ₹3.4 lakh crore, representing 13.3% of total savings. Meanwhile, currency and cash holdings stood at ₹2.6 lakh crore (10.5%), indicating consumers’ preference for liquidity amid fluctuating economic conditions.
On the market-linked side, the contrast is stark. Mutual funds, despite gaining popularity among urban investors, accounted for only ₹1.6 lakh crore, or 6.3% of overall savings.
Direct equity investments remain the least preferred, receiving just ₹48,613 crore, a mere 1.9% share. This highlights the risk-averse nature of Indian households, who continue to rely heavily on fixed-return instruments rather than volatile equity markets.
Analysts say the trend may slowly shift as younger, digitally savvy investors enter the workforce, but for now, the overwhelming tilt towards safety-first investments remains intact.
