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India's Fixed Deposit market is one of the largest pools of household savings in the world. Yet digital distribution of FDs remains in its infancy. This report examines the current state of the market, structural trends driving change, and the specific opportunities for fintech platforms.
Key findings:
India's bank deposit base is massive. RBI data shows outstanding term deposits (Fixed + Recurring) consistently growing:
| Metric | Value | Source | |--------|-------|--------| | Outstanding FD deposits (all banks) | Rs 200+ lakh crore | RBI Banking Statistics | | Annual new FD bookings | Rs 80+ lakh crore | RBI FY24 data | | Household savings in deposits (% of GDP) | ~25% | RBI Household Financial Savings |
To contextualize: India's total mutual fund AUM is approximately Rs 60 lakh crore. The deposit market is over 3x larger. Despite the narrative around equity investing, FDs remain India's dominant savings instrument by a wide margin.
The FD investor base spans a wide demographic:
| Segment | Estimated Share | Characteristics | |---------|----------------|----------------| | Retirees and senior citizens | 30-35% | Largest segment by volume; prefer safety and regular income | | Salaried professionals (35-55) | 25-30% | Tax saving, conservative allocation, goal-based savings | | Young professionals (25-35) | 15-20% | Fastest growing digital segment; first-time FD investors | | HNIs and corporates | 15-20% | Large deposits; rate-sensitive, multi-bank diversification | | Small business owners | 5-10% | Business surplus parking, working capital management |
The under-35 segment is particularly significant for digital platforms. They're mobile-first, comfortable with apps, and accustomed to managing finances digitally. But their FD booking behavior is predominantly branch-based or bank-website-based — because digital-native alternatives barely exist.
Despite India's digital payment revolution (UPI processing 15+ billion transactions monthly), FD booking remains overwhelmingly analog:
| Channel | Estimated Share of FD Bookings | User Experience | |---------|-------------------------------|----------------| | Bank branches | 50-55% | In-person, paper forms, 30-60 minutes | | Bank websites/apps | 30-35% | Digital but fragmented, single-bank | | Third-party platforms (fintech) | 5-10% | Emerging, multi-bank, embedded | | Corporate treasury | 5-10% | Direct bank relationships |
Less than 10% of FD bookings happen through fintech or third-party digital platforms. This is a staggering gap in a country where digital payments are ubiquitous.
1. Bank UX is poor: The average FD booking on a bank's website takes 25-40 minutes, involves 15+ form fields, and has a 70%+ abandonment rate. Bank digital experiences are designed for existing customers, not digital-first acquisition.
2. Single-bank limitation: Each bank's platform only shows its own rates. There's no comparison shopping. A customer must visit 5-10 bank websites to compare rates — and then complete separate KYC at whichever bank offers the best rate.
3. KYC friction: Opening an FD at a new bank requires full KYC (PAN, Aadhaar, Video KYC for amounts above Rs 90K at most banks). This is a 2-3 step process that creates significant drop-off.
4. No embedded distribution: Unlike mutual funds (available through Groww, Zerodha, Paytm Money) or insurance (available through Policybazaar, Ditto), FDs haven't had a platform layer that enables distribution through existing fintech apps.
FD rates are currently at multi-year highs, driven by RBI's monetary policy stance. This has created renewed consumer interest in fixed-income products.
| Issuer Category | Regular Rate Range | Senior Citizen Rate | DICGC Insured? | |----------------|-------------------|-------------------|----------------| | Small Finance Banks | 7.50% - 9.00% | 8.00% - 9.50% | Yes | | Private Sector Banks | 6.50% - 7.50% | 7.00% - 8.00% | Yes | | Public Sector Banks | 6.25% - 7.25% | 6.75% - 7.75% | Yes | | Large NBFCs | 7.00% - 8.50% | 7.25% - 8.75% | No | | Smaller NBFCs | 7.50% - 9.25% | 7.75% - 9.50% | No |
Small Finance Banks (SFBs) are emerging as the most interesting segment for digital FD distribution:
Highest rates in the market: SFBs consistently offer rates 100-200 basis points above large commercial banks. Special tenure rates at some SFBs reach 9.00-9.50% for senior citizens.
DICGC insured: Despite being smaller banks, SFBs are fully RBI-regulated and DICGC-insured up to Rs 5 lakh per depositor per bank — the same protection as SBI or HDFC Bank.
Digital distribution need: SFBs have limited branch networks. They need digital distribution channels to compete with large banks for deposits. This creates strong alignment with fintech platforms offering FD distribution.
Rate examples (select SFBs as of early 2026):
| SFB | Notable Rate | Tenure | Senior Citizen Rate | |-----|-------------|--------|-------------------| | Unity SFB | 9.00% | 1001 days (special) | 9.50% | | Unity SFB | 8.95% | 701 days (special) | 9.45% | | Unity SFB | 8.75% | 181-201 days (special) | 9.25% | | Suryoday SFB | Competitive | Various tenures | +50 bps | | Shivalik SFB | Competitive | Various tenures | +50 bps | | Utkarsh SFB | Competitive | Various tenures | +50 bps |
The "special tenure" phenomenon — where banks offer significantly higher rates at specific day counts (181D, 501D, 701D, 1001D) — is particularly interesting. These rates are 50-100 bps higher than surrounding tenures and represent opportunities that most retail investors are unaware of.
After years of low interest rates that made FDs unattractive relative to equity markets, the rate cycle has turned. FD rates at 8-9.5% are competitive with long-term equity returns for risk-adjusted investors.
This has brought FDs back into the investment conversation — particularly for:
The PMC Bank crisis and Yes Bank moratorium made retail investors acutely aware of deposit insurance. DICGC coverage of Rs 5 lakh per depositor per bank is now a actively sought feature.
This awareness has two effects:
Both trends favor platforms that offer multi-bank FD booking — making it easy to spread deposits across issuers.
The "platform-as-distributor" model is now proven in India across financial products:
FDs are the next logical category. The infrastructure layer that enables embedded FD distribution is emerging now, following the same pattern as payments and mutual funds.
RBI's progressive digitization of KYC — Aadhaar eKYC, Video KYC, CKYC registry, DigiLocker — has created a regulatory framework that enables end-to-end digital FD booking. This framework didn't exist 3-4 years ago.
Combined with Account Aggregator (consent-based financial data sharing), the friction of opening an FD at a new bank is declining rapidly.
| Platform Type | Why FDs Make Sense | Examples | |--------------|-------------------|---------| | Stock brokers | Users already invest; FDs add fixed income to portfolio | Zerodha, Upstox, Groww | | Neobanks | Savings is core; FDs are the most-requested savings product | Jupiter, Fi Money | | Payments super-apps | Users manage money; FDs monetize idle balances | MobiKwik, PhonePe, Paytm | | Savings/PFM apps | Goal-based saving is core; FDs are the execution layer | Jar, Fello | | Wealth management | Portfolio diversification into fixed income | INDmoney, Kuvera | | Enterprise/salary platforms | Payroll users have savings intent | Employer platforms |
At 15 basis points trail commission on FD AUM:
| Platform Scale | Monthly Bookings | Annual AUM | Annual Revenue | |----------------|-----------------|-----------|----------------| | 500K MAU | 75 | Rs 2.7 Cr | Rs 27,000 | | 1.5M MAU | 1,125 | Rs 67.5 Cr | Rs 10.1 lakh | | 5M MAU | 7,875 | Rs 708 Cr | Rs 1.06 crore | | 10M MAU | 15,750 | Rs 1,418 Cr | Rs 2.84 crore |
Revenue scales significantly with MAU. And these projections don't include renewal revenue — which effectively doubles the revenue base in Year 2.
| Player Type | Approach | Limitation | |-------------|---------|-----------| | Direct bank apps | Single-bank, own platform | No multi-issuer comparison; poor UX | | FD aggregator portals | Lead generation, redirects | Don't own the booking; user leaves platform | | B2C wealth-tech | Own marketplace, own user | Not available for other platforms | | B2B2C infrastructure (Blostem model) | White-label SDK for any platform | Partner owns the user relationship |
The B2B2C infrastructure model — where the platform provides the technology and the fintech provides the distribution — mirrors how Razorpay works for payments. The fintech doesn't need to build payment infrastructure; it integrates a payment SDK. Similarly, the fintech doesn't need to build FD infrastructure; it integrates an FD SDK.
As more fintech platforms embed FD offerings, digital FD bookings will grow significantly from the current sub-10% base.
Small Finance Banks, with their high rates and limited branch networks, will be the primary beneficiaries of fintech FD distribution. Digital channels may become the primary acquisition channel for SFB deposits.
AA-enhanced FD flows (pre-filled applications, instant income verification, personalized rate matching) will become standard, reducing booking time from 10+ minutes to under 3 minutes.
As FD booking becomes commoditized, the post-booking experience — portfolio management, maturity alerts, renewal optimization, tax reporting — will differentiate platforms.
Recurring Deposits and bond distribution will follow the same infrastructure-as-a-service model that's emerging for FDs. Platforms that integrate FD infrastructure today will be positioned to add RDs and bonds through the same SDK.
If you're evaluating FD distribution for your platform:
The window is open but narrowing. Digital FD distribution is early-stage. First movers in each category (first neobank, first payments app, first PFM tool) will have competitive advantage.
Build vs buy is decisive. Building FD infrastructure in-house takes 6-18 months and Rs 3-5 crore. Using existing infrastructure takes 1-2 weeks. The market won't wait.
SFB rates are the hook. Users compare rates. SFBs at 8.5-9.5% with DICGC insurance are compelling. Ensure your infrastructure includes high-rate SFB issuers.
Compliance is non-negotiable. RBI KYC, VKYC, DICGC disclosures, consent management — these aren't features to add later. They must be built in from day one.
Placement drives adoption. FDs embedded in savings hubs, post-payment flows, and goal-based interfaces convert 3-5x better than those buried in product menus.
This report draws on data from RBI publications, industry analysis, and anonymized partner data from Blostem's FD distribution infrastructure. For specific market data or partnership inquiries, contact our team.
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