By Mr. S.Sridharan, Founder, https://www.walletwealth.co.in/
Mutual Fund Eating into bank deposit share..!
A recent report by the SBI (State Bank of India) reveals that while the share of mutual funds (MFs) and insurance in financial savings have been going up over the past three years, the share of bank deposits is declining since FY 2021 till.
The share of bank deposits in financial savings has decreased from 47.6% in March 2020-21 to 45.2% in 2022-23.
On the other hand, mutual funds have gained ground. Its share in the financial savings has increased from 7.6% in 2021-21 to 8.4% in 2022-23.
Increasing share of mutual funds..!
The report said, "The increasing share of mutual funds in financial savings makes them the most preferred instrument for financialization of savings."
Other investment avenues, including PPF, PF & small savings, have also seen growth, with their share increasing from 12.6% to 13.7% over the past 3 years.
| Category of Investment | 2020-21 (%) | 2022-23 (%) |
| Bank Deposits | 47.6 | 45.2 |
| Life Insurance Funds | 20.8 | 21.5 |
| Currency | 11.4 | 11.1 |
| Mutual Funds | 7.6 | 8.4 |
| Others (NBFC, PPF, PF & small savings) | 12.6 | 13.7 |
Further, the report also showed a 4 -fold increase in mutual fund SIP registrations since 2017-18, reaching 4.8 crore accounts and amassing annual contributions of approximately Rs. 2 lakh crore.
Other key findings of the report:
India's financial inclusion improved significantly & now more than 80% of adults in India have a formal financial account, compared to 50% in 2011, which is improving the financialization of savings rate of Indian households
India money savings rate is at 30.2%, which is higher than the global average of 28.2%
Mr. S.Sridharan, Founder, https://www.walletwealth.co.in/
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You can contact Mr.S.Sridharan for all types of investments including mutual fund investment, medical insurance, and life insurance.
Read articles written by Mr. S. Sridharan in Nanayam Vikatan, a leading personal financial management magazine.
https://www.vikatan.com/author/855-sridharan-s
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes.
