MF AUM Reaches ₹65.74 Lakh Crore: 30% of Total Bank Deposits in FY25

In FY25, the Mutual Fund (MF) industry witnessed a notable rise, with its AUM now equalling 29% of the total bank deposits in India. According to data from the Reserve Bank of India (RBI) and the Association of Mutual Funds in India (AMFI), the MF AUM stood at ₹65.74 lakh crore as of March 2025. In comparison, the total bank deposits in the country were recorded at ₹227 lakh crore. This signifies a growing trend where more of the country’s savings are being allocated to mutual funds rather than traditional bank deposits.

A Decade of Growth

The increase in MF AUM relative to bank deposits has been striking over the past decade. A report by Franklin Templeton Mutual Fund reveals that the ratio of MF AUM to bank deposits has tripled over the last ten years. In FY24, this ratio stood at 26%, and now it has reached a significant 29% in FY25. This growth highlights the increasing importance of mutual funds as an investment vehicle for Indian investors.

Wealth Creation Driving the Change

The expansion of the MF industry is primarily attributed to wealth creation and growing awareness among investors. As India’s savings pool has expanded, many have started to seek alternative investment avenues beyond traditional bank deposits. Mutual funds have emerged as an attractive option, offering potentially higher returns compared to fixed deposits and savings accounts.

Read More: Amfi Data Reveals 5 Fund Houses Led FY25 with 31.6 Million New Folios.

The Role of SIPs and Media Support

The popularity of Systematic Investment Plans (SIPs) has played a crucial role in the MF industry's growth. SIPs allow investors to invest in mutual funds regularly, ensuring disciplined investing and reducing the impact of market volatility. This method has helped retail investors participate in the markets with smaller, consistent contributions over time.

The increasing support of Mutual Fund Distributors (MFDs), media, and regulators has also been pivotal. These stakeholders have been instrumental in educating investors about the benefits of mutual funds and encouraging them to diversify their portfolios. Additionally, favourable regulatory frameworks have contributed to building trust and confidence among investors, leading to higher investments in the sector.

Conclusion

As the MF AUM continues to grow, the landscape of retail investments in India is evolving. The trend of moving away from traditional bank deposits to mutual funds is likely to persist, driven by the pursuit of better returns, greater financial literacy, and a more diversified approach to wealth management. This shift is a reflection of the changing investment culture in India, where individuals are increasingly looking for opportunities to grow their wealth rather than simply preserve it.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.