Now people are preferring those schemes for investment which provide good interest rates. This is the reason why people are giving more preference to term deposits than bank deposits which have higher interest rates. In December 2023, the share of money deposited under Term Savings Plans in total bank deposits increased to 60.3 percent, which was 57.3 percent in March 2023.
There has been a lot of change in the way people invest in recent times. Now they prefer to invest money in those schemes in which they get good interest rates. This is the reason why people are increasingly inclined towards Term Savings Plans.
Reserve Bank data shows that the share of money deposited under fixed savings schemes in total bank deposits increased to 60.3 percent in December 2023, which was 57.3 percent in March 2023. The Reserve Bank believes that the rising interest rates on term savings plans are luring people.
If seen on incremental basis, during April-December 2023, fixed deposits were about 97.6 percent of the total deposits. At the same time, the amount deposited under current account and savings account deposits declined.
According to RBI data, ‘rising returns on term deposits are driving structural changes in bank deposits.’ Recently, American investment banking company Goldman Sachs had also said in one of its reports that people are staying away from bank deposits due to low returns on them.
The Reserve Bank has maintained the short-term lending rate i.e. repo rate at 6.5 percent for almost a year. It was last changed in February 2023. At that time, inflation had increased due to global reasons, due to which the Central Bank had increased the repo rate from 6.25 percent to 6.5 percent.
Another set of this data shows that credit to industry grew by 9.5 percent year-on-year in December 2023, which was equal to the growth a year earlier. The share of personal loans in the total loan was the highest at 30.9 percent. It was 28.6 percent last year.
RBI said that the share of women in total loans is less, but it is increasing strongly. This has outpaced the growth of loans given to men in the last seven quarters.
