Deposits

Deposits are funds placed by individuals, businesses, and institutions with banks and financial institutions for safekeeping, earning interest, and facilitating transactions — constituting the primary source of funding for the Indian banking system and the most widely used savings instrument for Indian households. In India, bank deposits are classified as: Demand Deposits (Current Accounts — non-interest bearing, freely withdrawable; and Savings Accounts — low interest, subject to withdrawal limits), Time Deposits (Fixed Deposits — placed for a specific tenure at a predetermined interest rate, ranging from 7 days to 10 years), and Recurring Deposits (fixed monthly contributions for a predetermined period earning compounding interest). The RBI mandates that scheduled commercial banks maintain deposits with DICGC (Deposit Insurance and Credit Guarantee Corporation) — ensuring each depositor's balances up to ₹5 lakh are insured against bank failure. India's total bank deposit base exceeded ₹200 lakh crore by 2024, reflecting the banking system's role as the primary savings vehicle for Indian households. The CASA (Current Account Savings Account) ratio — the proportion of low-cost demand deposits to total deposits — is a critical determinant of a bank's funding cost and net interest margin. For equity investors analysing Indian banking stocks, deposit growth rates, CASA ratio trends, and the competitive dynamics of deposit mobilisation across public and private sector banks are fundamental inputs for assessing bank profitability and liability franchise strength.