According to latest RBI data, the composition of scheduled commercial banks' aggregate deposits has undergone a structural shift over the last five years, characterized by a decline in the share of savings deposits and increase in term deposits. The proportion of SCBs' savings deposits declined from 34.6% in March 2022 to 28.7% in March 2026, while term deposits increased from 55.2% to 61.6% during the same period. This shift comes as savings deposit rates went down from 2.70/3.00% in March 2022 to 2.50% in March 2026, while term deposit rates of more than one-year tenor rose from 5.00/5.60% to 6.00/6.60% in the same period. The trend is particularly pronounced in large-ticket deposits, with deposits of ₹5 crore and above accounting for 34.8% of term deposits as of end-March 2026, though these deposits constituted just 0.05% of term deposit accounts by number, indicating increasing concentration among a small set of large depositors. As per the latest RBI data, deposits worth ₹1 crore and above accounted for 46.3% of all term deposits at the end of FY26, highlighting a clear concentration of bank fixed deposits in large-ticket investments.
The data reveals a concerning trend toward large-ticket deposit concentration, with nearly 38% of term deposits being ₹3 crore and above - categories that fall outside retail deposits typically defined as deposits up to ₹2 crore. In stark contrast, term deposits of up to ₹5 lakh accounted for only 17.8% of term deposits as of end-March 2026. This concentration reflects banks' struggle to mobilise retail savings, forcing them to increasingly rely on bulk deposits to support balance-sheet growth. As per a senior private sector banker, the rise in high-value term deposits is largely a function of the interest-rate environment and pricing, with investors preferring fixed-income instruments when rates are expected to rise. Banks are offering attractive rates on deposits above ₹5 crore, with certificate of deposit rates currently around 7.5-7.75%, making them competitive versus debt mutual funds or gilt funds. The RBI noted that the share of term deposits with an original maturity of one to three years rose steadily to 69.8% in March 2026 from 50.4% in March 2022, while the proportion of term deposits of maturity up to one year came down to 8.8% from 16.7% during the same period, indicating that many depositors appear to have locked in rates for one to three years amid uncertainty over the future interest-rate cycle.
For individuals seeking to maintain emergency funds while maximizing returns, sweep-in fixed deposits offer a balanced alternative to traditional savings accounts. According to Mint, these automated systems automatically shift surplus money above a set threshold into higher-yielding FDs while maintaining complete liquidity. Unlike conventional FDs, sweep-in facilities allow only the required amount to be transferred or withdrawn, while the remaining balance continues to earn FD interest. As Adhil Shetty, CEO of BankBazaar, explains, this makes it particularly useful for emergency funds where both liquidity and returns are important considerations. The interest earned is taxable as per the investor's income tax slab and must be reported under 'Income from Other Sources', with banks potentially deducting TDS if interest income crosses applicable thresholds during the financial year.
According to reports from TopNews, Post Office small savings schemes continue to offer attractive returns during the April-June 2026 quarter. The 1-Year Post Office Time Deposit offers 6.9%, while the 3-Year Time Deposit provides 7.1% and the 5-Year Time Deposit earns 7.5% annually. Among other popular schemes, the National Savings Certificate (NSC) offers 7.7%, while the Senior Citizen Savings Scheme (SCSS) provides 8.2%, making it one of the highest-paying government-backed fixed-income products currently available. The 5-Year Post Office Time Deposit qualifies for deduction under Section 80C (old tax regime) of the Income-tax Act, while the National Savings Certificate also qualifies for Section 80C benefits. For bank FDs, most public sector banks currently offer returns between 6% and 6.7%, while leading private banks generally provide between 6.25% and 6.75%. The RBI data shows that the share of term deposits bearing 'less than 7%' interest rate surged to 61.8% in March 2026, a sharp rise from 27.3% recorded in the previous year, reflecting the transmission of monetary policy actions into lending rates.
As reported by TopNews, bank FD rates vary significantly depending on the institution and tenure. Most public sector banks currently offer returns between 6% and 6.7%, while leading private banks generally provide between 6.25% and 6.75%. Small finance banks continue to offer the highest rates, with Jana Small Finance Bank and Suryoday Small Finance Bank offering up to 8.1%, while Utkarsh Small Finance Bank offers up to 8.1% on select tenures. The trend comes at a time when banks face intense competition for retail deposits, forcing them to increasingly rely on bulk deposits. According to Saurabh Bhalerao from CareEdge Ratings, companies may have placed large sums in bank fixed deposits as part of their cash management strategies, with interest rates in corporate certificates being high during March and some banks offering higher rates for deposits worth ₹1 crore and above due to challenges in retail deposits mobilization. The latest RBI data shows that deposits from non-financial companies and financial corporations increased their share during FY26, with non-financial sector's share in deposits rising to 18.5% from 17.7% in March 2025, while financial corporations' share increased to 7.8% from 6.8% in the same period.
According to the report, for investors with a one-year investment horizon, the difference between bank FDs and Post Office deposits remains relatively small. The 1-Year Post Office Time Deposit currently offers 6.9%, while several private banks and small finance banks offer similar or slightly higher returns, with institutions such as Suryoday Small Finance Bank and Ujjivan Small Finance Bank offering around 7.25% for select one-year tenures. However, most large public and private sector banks offer between 6.25% and 6.75% for one-year deposits. For longer tenures, the 5-Year Post Office Time Deposit offers 7.5% compared to bank FDs, while the National Savings Certificate provides 7.7% and Senior Citizen Savings Scheme offers 8.2%. A practical example shows that investing ₹5,00,000 each at 7% (FD) and 7.5% (Post Office) for 5 years would result in maturity amounts of ₹7,07,389 and ₹7,24,974 respectively. As reported by TopNews, safety remains one of the biggest differentiators, with Post Office savings schemes being backed by the Government of India and bank fixed deposits protected by Deposit Insurance and Credit Guarantee Corporation insurance only up to ₹5 lakh per depositor per bank. The RBI data shows that households continued to be the largest contributor to banks' deposit base, accounting for 59.3% of total deposits, while senior citizens' share in deposits remained stable at 20.0%, having hovered in the close range of 19.8-20.2% over the past four financial years.
According to the report, interest earned from both bank FDs and Post Office deposits is taxable according to the investor's applicable income-tax slab. However, certain Post Office schemes offer additional tax benefits. The 5-Year Post Office Time Deposit qualifies for deduction under Section 80C (old tax regime) of the Income-tax Act, while the National Savings Certificate also qualifies for Section 80C benefits. For bank FDs, banks and financial institutions may deduct TDS if interest exceeds the threshold limit of ₹50,000 for individuals below 60 years and ₹1,00,000 for senior citizens above 60 years. The data also showed that the share of term deposits carrying interest rates below 7% surged to 61.8% in March 2026 from 27.3% in the previous year, reflecting the transmission of monetary policy actions into lending rates. Meanwhile, growth in deposits with scheduled commercial banks accelerated to 11.5% year-on-year as of end-March 2026, compared with 10.6% a year earlier, with public sector banks accounting for 50.8% of incremental deposits and private sector banks contributing 38.6%.
