Indian households’ savings mix shifts: Mutual funds and equity gain, insurance flows weaken — what it means
Indian households are increasingly directing their savings towards market-linked financial assets, while traditional avenues such as life insurance and small savings have seen more uneven flows.
Mutual funds recorded the sharpest rise in annual inflows among the major financial assets. Here’s what you need to know about how Indian households are parking and investing their savings.
| Year-Wise Inflow of Household Savings to Different Instruments | FY2023 ( ₹ lakh crore) | FY2024 ( ₹ lakh crore) | FY2025 ( ₹ lakh crore) |
| Deposits | 11.1 | 13.8 | 12.5 |
| Life insurance funds | 5.5 | 6.5 | 5.3 |
| Provident & pension funds, including PPF | 6.2 | 7.2 | 7.9 |
| Currency | 2.4 | 1.2 | 2.1 |
| Mutual funds | 1.8 | 2.4 | 4.7 |
| Equity | 0.2 | 0.3 | 0.7 |
| Small savings instruments, excluding PPF | 2.0 | 3.1 | 2.3 |
*Source: Abakkus Asset Manager IPO DRHP
According to data cited in Abakkus Asset Manager’s DRHP, mutual funds have seen the sharpest increase over the three-year period.
Inflows into the category rose from ₹1.8 lakh crore to ₹4.7 lakh crore, meaning they have more than doubled. Equity investments also more than tripled, although they remain much smaller in absolute terms.
Provident and pension funds (including PPF) have shown a more consistent increase. Their inflows rose from ₹6.2 lakh crore to ₹7.9 lakh crore over the period, making them one of the larger and more steadily growing categories.
Which traditional avenues continue to attract households?
Deposits remained the largest individual avenue among the instruments. Household inflows into deposits rose from ₹11.1 lakh crore in FY2023 to ₹13.8 lakh crore in FY2024, before easing to ₹12.5 lakh crore in FY2025.
However, life insurance saw a different trend. Inflows increased from ₹5.5 lakh crore in FY2023 to ₹6.5 lakh crore in FY2024, before declining to ₹5.3 lakh crore in FY2025.
Small savings have also been volatile. After rising to ₹3.1 lakh crore, inflows declined to ₹2.3 lakh crore. This leaves the category only modestly above its starting level.
Currency holdings were volatile. They fell by half initially, from ₹2.4 lakh crore to ₹1.2 lakh crore, but then rose again to ₹2.1 lakh crore.
What does the shift show?
The data suggests that household financial savings are changing in composition. Deposits remain the largest individual avenue, while provident and pension funds have recorded steady growth. Mutual funds have seen the strongest increase, with inflows more than doubling over the period.
On the other hand, life insurance has seen inflows decline from their initial level, indicating relatively weaker flows into the segment. For households, the broad shift is therefore not a move away from traditional savings altogether, but a changing mix in which market-linked financial assets.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.
