Net financial savings of household sector may reach 6.5% of gross national disposable income in FY25

RBI observed that net household financial savings improved marginally, mainly due to uptick in financial assets of households  
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The net financial savings of the household sector may reach ₹22 lakh crore, or 6.5 per cent of the Gross National Disposable Income (GNDI) in FY25 based on current trends, according to SBI’s economic research department .

The latest RBI Annual Report indicates that the household sector showed strong financial resilience, with net savings rising to 5.1 per cent of GNDI in FY24 from 4.9 per cent in the previous year.

This growing capital pool remains crucial for funding government and corporate deficits and supporting macroeconomic stability, the banks’ economists said in their report ‘Ecowrap’.

Uptick in assets

In its latest monetary policy report, RBI observed that net household financial savings improved marginally, mainly due to uptick in financial assets of households.

The SBI report noted that the net financial saving of the household sector – the most important source of funds for the two deficit sectors – the general government sector and the non-financial corporations – improved to 5.1 per cent of GNDI in 2023-24 from 4.9 per cent in the previous year.

Further, as against the increase in household liabilities to 6.1 per cent of GNDI, the gross financial saving of households increased to 11.2 per cent of GNDI in 2023-24 from 10.7 per cent in the previous year.

In the latest monthly bulletin, RBI officials noted that the government of India reviewed the interest rates on various small savings instruments, which are linked to secondary market yields on G-secs of comparable maturities and kept it unchanged for Q1:2025-26.

As a result, the rates on most of the instruments are now above the formula-based rates in the range 16-66 basis points.

The officials cautioned that in a rate easing cycle when deposit rates are expected to come down, higher small savings rates can be a potential source of concern for bank deposit growth.

Published on May 30, 2025