November 05, 2024 00:08 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
US presidential election: Donald Trump ahead of Kamala Harris in swing states, poll survey predicts | 'I strongly condemn Hindu temple attack, intimidation of our diplomats': PM Modi amid Canada row | 'I strongly condemn Hindu temple attack, intimidation of our diplomats': PM Modi amid Canada row | PM Modi slams INDIA block for its silence over Sena UBT leader's sexist remark against Shaina NC | PDP member brings anti-Article 370 resolution in J&K assembly; BJP resists, CM Abdullah says only govt can do it
Bank FD rates surge to 9.5%, now 47% of FDs held by senior citizens
Fixed Deposit
Representational image from Pixabay/nattanan23

Bank FD rates surge to 9.5%, now 47% of FDs held by senior citizens

| @indiablooms | 20 Aug 2024, 01:14 pm

New Delhi/IBNS: Bank fixed deposit (FD) interest rates have touched 9.5 percent, which is a significant development for the investors who believe in FDs as a critical foundation in their investment portfolio.

Meanwhile, the financial domain is witnessing a remarkable shift, especially among senior citizens who now hold 47 percent of all FDs, while in contrast, median age of all investors in capital markets is now 32 years, with around 40 percent of investors being less than 30 years old.

An SBI Research report dated August 19, 2024, stated that banking sector deposit growth since FY22 is at Rs 61 trillion, outpacing credit growth at Rs 59 trillion.

"Myth of flagging deposit growth does not stand data scrutiny…CASA deposits are prone to UPI transactions and thus could be moving across the banking system," the report said.

"Growth in Reserve Money, Leakages from the Banking System and Regulatory dispensation could be holding up a faster deposit growth…Important to have a fair treatment of taxes on interest from deposits," as per the report.

According to reports, another interesting trend in banking system is the decline of CASA (Current Account Savings Account) deposits (41.0 percent in FY24 from 43.5 percent in FY23) as SB (Savings Bank) deposits declined even though it is somewhat aligned to pre-pandemic level of 42 percent.

Additionally with SB deposits now being used as a purely transaction motive and mostly for UPI transactions, the SB deposits now move across the banking system, due to which stability of SB could be an issue, reports Economic Times.

The Indian banking sector is facing a critical challenge as Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI) Governor Shaktikanta Das recently urged lenders to strengthen their deposit base.

Despite the strong growth in lending fueled by corporate and individual demand, deposit growth has lagged behind, raising concerns about potential liquidity issues, according to Inventiva.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.