- Where Indians Actually Put Their Money
- How Indian Money Habits Are Changing
- What This Data Says About Indian Investors
- Final Word
India’s economy is growing fast, and households are saving decently. But when you zoom in, Indian money still behaves cautiously: only about ₹2 out of every ₹100 saved goes into direct equity in FY25, while most goes into “safer” buckets like deposits, provident funds, pensions, and life insurance.
That safety-first behaviour is not “wrong”. It simply reflects how most families prioritise certainty, liquidity (easy access to money), and long-term security before taking market risk.
In this blog, RBI’s household financial savings data has been used to show where Indian household money went in FY25, how this mix has changed over the last 5-6 years, and what it quietly reveals about how Indian investors think and act.
Where Indians Actually Put Their Money
Here’s how Indian households allocated net financial savings across key instruments in FY25, based on RBI household financial savings data.
| Where money went (FY25 net flows) | Amount (₹ Lakh Cr) | Share |
| Bank & Non-Bank Deposits | 12.5 | 35% |
| Provident & Pension Funds | 7.9 | 22% |
| Life Insurance Funds | 5.3 | 15% |
| Mutual Funds | 4.7 | 13% |
| Small Savings (Post Office, etc.) | 2.3 | 7% |
| Cash (Currency) | 2.1 | 6% |
| Equity | 0.7 | 2% |
Source: RBI | Non-Bank Deposits = Deposits with NBFCs, etc. | Data shows net flows in each instrument during the year.
What stands out is the “safety vs growth” split. Deposits + provident/pension + life insurance + small savings together dominate the picture, while direct equity is only 2% of FY25 flows. Although Indian households do take market exposure, but they prefer to do it indirectly through mutual funds (13%), much more than directly through shares.
How Indian Money Habits Are Changing
The RBI numbers from FY20 to FY25 show a very clear shift: mutual funds and equity are growing faster, while some traditional buckets are slowing or shrinking over longer periods.
| Category | 5 Yr Growth | 3 Yr Growth | YoY Growth | Growth (FY20 to FY25) |
| Bank & Non-Bank Deposits | 7% | 22% | -9% | 42% |
| Life Insurance Funds | 7% | 7% | -17% | 43% |
| Provident & Pension Funds | 10% | 11% | 10% | 58% |
| Cash (Currency) | -6% | -8% | 78% | -26% |
| Mutual Funds | 50% | 43% | 95% | 655% |
| Equity | 22% | 15% | 153% | 175% |
| Small Savings (Post Office, etc.) | -2% | -12% | -25% | -12% |
Source: RBI
- Fast growers (FY20 to FY25 growth):
- Mutual funds: 655% growth from ₹0.6 to ₹4.7 lakh crore during the period, with an annual growth rate of 50% in the last 5 years.
- Equity: 175% growth from ₹0.3 to ₹0.7 lakh crore, plus 153% YoY growth in FY25.
- Steady, structural growers:
- Provident & pension funds: 58% growth from ₹5.0 to ₹7.9 lakh crore, and 10% YoY growth in FY25.
- This category usually benefits from payroll-linked contributions and long-term habits, so it tends to look “stable” in most years.
- Volatile or slowing buckets:
- Bank & non-bank deposits: still the largest at ₹12.5 lakh crore (35%), but dropped 9% YoY in FY25.
- Life insurance funds: ₹5.3 lakh crore (15%), but net flows declined 17% YoY in FY25.
- Small savings: Flows in this category also took a hit of 25% YoY in FY25 and 12% from FY20 to FY25.
What This Data Says About Indian Investors
These patterns suggest that most Indian households are not “risk-seeking”. They are risk-calibrating. Deposits, provident/pension, and insurance still dominate because they feel predictable and familiar, and many are tied to life goals like retirement and protection.
At the same time, the sharp multi-year rise in mutual funds (and the smaller but rising equity flows) suggests a slow behavioural upgrade: more people are getting comfortable with market-linked products, but they still prefer a guided route (mutual funds) rather than picking stocks directly.
A quiet learning for retail investors is that wealth creation often needs some growth assets, but behaviour change takes time. The data hints that Indian households are gradually adding growth exposure without abandoning safety, which is usually a healthier way to build long-term discipline than sudden “all-in” shifts.
Final Word
FY25 shows a very Indian investing truth: households want growth, but they want it with guardrails. Deposits and retirement-style products still carry the bulk of household money, while mutual funds are emerging as the main bridge between safety habits and equity returns.
If this trend continues, the big story is not “everyone is becoming a trader”. It is that households are slowly learning to mix safety for stability with market exposure for long-term wealth.
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