Term Deposits Surge Amid RBI's Monetary Policy Changes

Term deposits have become increasingly popular, with interest rates surpassing 7%, as revealed by RBI's September 2024 data. These deposits now constitute 61.4% of total deposits. Metropolitan areas significantly contributed to deposit growth, while loans, especially to private corporates, also saw noteworthy increases.

As per the latest data released by the Reserve Bank of India (RBI), term deposits have gained momentum, outpacing the growth of current and savings accounts (CASA). The share of term deposits in total deposits rose to 61.4% in September 2024, a notable increase from 59.8% in the same month last year.

The data, part of the 'Basic Statistical Return' for scheduled commercial banks, shows that interest rates on term deposits have climbed to over 7%, prompting a shift of substantial deposits into higher interest buckets. Meanwhile, bank deposits witnessed an overall year-on-year growth of 11.7%.

Additionally, metropolitan branches have played a crucial role, contributing 66.5% of the total incremental deposits. The report highlights the growth in loan portfolios, with credit to private corporates rising to 16.5% year-on-year, showcasing an upward trend across various sectors.

(With inputs from agencies.)