Young savers drift away even as retirees prop up bank deposits

Indian banks are losing ground among working-age savers, even as retirees return in growing numbers to park money in fixed deposits and savings accounts.Recent data from the Reserve Bank of India shows the share of deposits held by working Indians aged 25 to less than 60 has steadily declined over the past two years, highlighting how younger savers are no longer reliant on banks to grow their money.The working population held 55.46% of retail deposits in December 2025, down from 57.41% in March 2023, the earliest comparable data. That is a change of 195 basis points (bps).By contrast, the share of depositors aged 60 and above rose sharply to 40.6%, from 38.25% as of March 2023, up 235 bps.

Given that the retail deposit base is ₹124.7 trillion, every 100 bps is worth ₹1.2 trillion.Armed with sovereign backing and a public image of strength, India’s public sector banks have traditionally depended on customers walking up to the branches to deposit money. That changed with the advent of savvier private banks that were quick to pull customers rather than wait for them to show up.

That said, the war for deposits has wounded every lender, irrespective of ownership.“There is a generational shift,” said Bhavik Hathi, managing director, Alvarez & Marsal. “The working population, especially those in the age group of 25 to 40, are more aware of alternative investment options.”Hathi said that there is greater general awareness, access to alternative investments that generally yield higher than classic fixed deposits.

Investments in stocks and gold have been delivering far superior returns over the past few years.“There is also easy access to these investment options on account of technology, internet, and the apps. We are also in the