Key facts
- Share of term deposits below 7% rose to 61.8% in FY26.
- This shift is attributed to 125 basis points of policy rate cuts.
- Depositors moved to longer maturities, with one-to-three-year tenures increasing to 69.8%.
- Term deposits now constitute 61.6% of total deposits, a structural change from savings accounts.
This development reflects a significant shift in how individuals and businesses are managing their cash in response to changing interest rate environments. As central banks cut policy rates, banks adjust their liability costs, leading depositors to seek better yields by locking funds into longer-term deposits. This trend can impact bank funding costs and overall financial system liquidity.