Deposits with Scheduled Commercial Banks (SCBs) grew by 11.5% year-on-year by the end of June 2026. This was slightly higher than the 11.3% growth recorded a year ago but lower than the 11.6% growth recorded in the previous quarter. Deposits in semi-urban and rural branches grew faster than the overall deposit growth.
Deposits in private sector banks grew by 13.8% by the end of June 2026, an increase of 1.4 percentage points from the previous year. Deposits in public sector banks grew slightly to 10.3% in June 2026, compared with 10.2% a year ago.
The household sector remained the biggest contributor to bank deposits. It held 58.8% of total deposits at the end of June 2026 and accounted for 98.9% of the increase in deposits during the quarter.
Term deposits were the main reason for the growth in bank deposits. They grew by 12.9% in June 2026, compared with 5.3% growth in current deposits and 10.6% growth in savings deposits.
Term deposits with an original maturity of 1 to 3 years made up nearly 70% of all term deposits in June 2026. Short-term deposits with an original maturity of up to 1 year accounted for 20.4%.
The share of term deposits carrying an interest rate of less than 7% increased to more than two-thirds of total term deposits in June 2026, compared with 35% a year ago.
Large deposits of ₹1 crore and above accounted for 47.3% of total term deposits at the end of June 2026. Within this category, deposits of ₹5 crore and above accounted for 35.7% of total term deposits.
Understand the Trend
Term deposits account for the largest share
Term deposits continued to form the largest part of total bank deposits. In June 2026, term deposits accounted for 63.0% of total deposits. This was slightly higher than 62.0% in March 2026 and 62.2% in June 2025.
The share of savings deposits stood at 28.0% in June 2026, compared with 28.0% in March 2026 and 28.3% in June 2025. Current deposits accounted for 9.0% of total deposits in June 2026. This was lower than 9.9% in March 2026 and 9.5% in June 2025.
The composition of bank deposits in June 2026 was therefore:
- Term deposits: 63.0%
- Savings deposits: 28.0%
- Current deposits: 9.0%
Deposit growth has improved from September 2025
The deposit growth declined to 9.9% in September 2025. It then increased to 10.5% in December 2025, 11.6% in March 2026 and 11.5% in June 2026. This shows that deposit growth has remained above 11% during the first half of 2026.
More term deposits are now earning below 7% interest
There has been a significant change in the interest-rate composition of term deposits between March 2025 and June 2026. In June 2026, 54.9% of term deposits carried an interest rate of 6% to less than 7%. Another 31.0% of term deposits carried an interest rate of 7% to less than 8%.
Term deposits carrying an interest rate of 5% to less than 6% accounted for 6.9%, while deposits carrying interest rates of less than 5% accounted for 5.1%. Deposits carrying an interest rate of 8% or more accounted for only 2.2%.
Therefore, in June 2026, more than half of the term deposits were earning an interest rate between 6% and 7%.
How has the interest-rate composition changed?
The change becomes clearer when compared with March 2025.
In March 2025:
- 66.7% of term deposits carried interest rates of 7% to less than 8%.
- 19.2% carried rates of 6% to less than 7%.
- 5.1% carried rates of 5% to less than 6%.
- 2.8% carried rates below 5%.
- 6.2% carried rates of 8% or more.
By June 2026, the share of deposits earning 7% to less than 8% had fallen sharply to 31.0%, while the share earning 6% to less than 7% increased significantly to 54.9%.
This indicates that a large portion of term deposits has moved towards the 6% to less than 7% interest-rate category.
