The share of term deposits bearing less than 6 per cent interest rate came down while the share of term deposits bearing 6 to 8 per cent interest rate went up even as the return on bank deposits rose significantly during Q1, reported Business Line.
The share of term deposits bearing less than 6 per cent interest rate came down to 25 per cent of the total term deposits in June 2023 from 38.7 per cent a quarter ago, as per RBI data.
On the other hand, the share of term deposits bearing 6 to 8 per cent interest rates went up from 57.8 per cent to 70.7 per cent during the same quarter.
Term deposit rates of over one year tenor were fetching 6.00 to 7.25 per cent interest on average as of June 30, 2023, compared to 5.00 to 5.75 percent as of July 1, 2022.
Nearly two thirds of term deposits were placed in the original maturity bucket of one to three years and around 20 per cent of term deposits were short term (less than a year), according to the RBI’s quarterly basic statistical return.
Current, savings, and term deposits had 9.6 per cent, 31.8 per cent, and 58.6 per cent, respectively, in bank deposits in June 2023. The household sector (which includes individuals, proprietary concerns, Hindu undivided families (HUFs), and partnership firms, among others) held the largest share of bank deposits (61.0 per cent).
Senior citizens and minors held 19.8 per cent and 0.6 per cent of the total deposits, respectively, in June 2023.
Maharashtra, the NCT of Delhi, and Gujarat accounted for over half of the incremental deposits during April–June 2023.