NEW DELHI-BASED physiotherapist Sanjana Sharma, 42, used to keep a chunk of her earnings aside in a savings bank account to meet her emergency needs. But she no longer favours her savings account. Instead, she parks her money in fixed deposits (FDs). The reason: the growing disparity in interest rates. With FD rates as high as 7-8%, while savings account offer just around 3%, she has transitioned from being a saver to an investor.
Similarly, Noida-based Ashish Kumar, a 24-year-old software engineer, began a systematic investment plan (SIP) in a large-cap equity fund soon after he started working. Given the challenges the IT sector has faced in recent times, he has put his money into liquid funds—which may yield returns of up to 7%—for contingency needs. With average returns of 25% in the past year, he has decided to forego keeping money in a savings account.
Like Sharma and Kumar, many are abandoning savings accounts in favour of investing. Instead of letting their money sit idle, they’re opting to invest in FDs and liquid funds, or taking the plunge into equities, which have yielded much higher returns in recent years. India, once a country of savers, has transformed to one of investors, and the change has been “phenomenal,” Uday Kotak, Founder & Director of Kotak Mahindra Bank, told BT recently.
This shift has had a ripple effect in the banking industry. With more money moving out of savings accounts, the CASA (current account and savings account) ratios of banks have taken a hit. Of the total outstanding deposits (₹212.53 lakh crore) of scheduled commercial banks as of March 31, 2024, term deposits accounted for 59% (₹125.44 lakh crore), with the remaining 41% being CASA deposits. The FY24 figure is much lower than the 43.5% in FY23 or 45.2% in FY22.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
"Moving to cloud helped us grow❞
What was the problem you were grappling with?
She's Got Time
MORE WOMEN ARE BECOMING WATCH CONNOISSEURS, SEEKING OUT BOTH JEWELLED AND TECHNICAL WATCHES FOR THEIR STYLE AND CRAFTSMANSHIP
RISING STAR
PARUL GULATI IS a name that's been steadily gaining prominence in the Indian entertainment industry after she appeared on season 2 of Shark Tank in 2023. She has become a multifaceted personality who effortlessly transitions between acting and entrepreneurship.
Building on a Legacy
WHEN ZAHABIYA KHORAKIWALA stepped into her role as Managing Director of Wockhardt Hospitals over a decade ago, she confronted formidable challenges that have since turned into achievements.
LEADER IN INNOVATION
AS FEDEX'S PRESIDENT (Middle East, Indian subcontinent and Africa), Kami Viswanathan has a lot on her plate.
WAITING IN THE WINGS
Here are those who missed out as they have not yet completed a year in office; they'll be strong contenders in 2025
A DECENT PROPOSAL
IN TODAY'S WORLD OF TRYING TO CREATE AN EQUITABLE SPACE, BOTH MEN AND WOMEN CONTRIBUTE TO THEIR HOUSEHOLDS. WOMEN ARE ENCOURAGED TO HAVE THEIR OWN SAVINGS POOL AND INVESTMENT ROUTINE. GIVEN THIS, HOW SHOULD FUTURE BRIDES APPROACH FINANCIAL PLANNING?
Women and the STEM Bias
EMPOWERING WOMEN IN STEM WILL NOT ONLY BENEFIT INDIVIDUALS, BUT ALSO STRENGTHEN THE ENTIRE INDUSTRY, DRIVING INNOVATION AND PROGRESS.
ROCKET WOMEN
WOMEN IN INDIA ARE NOT ONLY VENTURING INTO SPACE BUT ARE ALSO STARTING TO SPEARHEAD THE COUNTRY'S EFFORTS IN THE GLOBAL SPACE RACE.
ONE STEP FORWARD
THE NUMBER OF WOMEN INDEPENDENT DIRECTORS IS GROWING STEADILY, BUT IT'S A LONG WAY FROM GENDER PARITY. MUCH MORE NEEDS TO BE DONE TO BREAK THE GLASS CEILING IN BOARDROOMS.
