Mutual Fund AUM-to-Bank Deposit Ratio Triples in a Decade to 31% in August

Mutual Fund AUM Now Equals Nearly One-Third of Bank Deposits

The size of India's mutual fund industry has increased sharply relative to the country's bank deposit base over the past decade.

As of August 2026, mutual fund assets under management (AUM) were equivalent to around 31.6% of overall bank deposits, according to the Mutual Fund Industry Dashboard by Franklin Templeton cited by Economic Times.

The ratio has nearly tripled over the last decade, indicating the substantial expansion of mutual fund assets compared with traditional bank deposits.

Ratio Rose From 16.2% in March 2017

The mutual fund AUM-to-bank deposit ratio stood at around 16.2% in March 2017.

By August 2026, it had risen to more than 31%, according to the Franklin Templeton report. This represents roughly a threefold increase in the ratio over the period.

The increase reflects the rapid growth of the mutual fund industry during a period when Indian households have increasingly participated in market-linked investment products.

Mutual Fund Industry AUM Reaches Rs 87.08 Lakh Crore

The Indian mutual fund industry's total AUM stood at Rs 87.08 lakh crore as of August 31, 2026, according to data from the Association of Mutual Funds in India (AMFI).

AMFI data shows that the industry's AUM has grown from Rs 15.63 lakh crore in August 2016 to Rs 87.08 lakh crore in August 2026, representing roughly a sixfold increase in 10 years.

Over the five years from August 2021 to August 2026, industry AUM increased from Rs 36.59 lakh crore to Rs 87.08 lakh crore.

August 2026 AUM Data

IndicatorAugust 2026Mutual fund industry AUMRs 87.08 lakh croreMF AUM-to-bank deposit ratioAround 31.6%MF AUM-to-bank deposit ratio in March 201716.2%MF folios28.35 croreRetail-oriented equity, hybrid and solution-oriented foliosAround 21.62 crore

AMFI reported that average assets under management for August 2026 stood at approximately Rs 88.31 lakh crore, while the month-end AUM was Rs 87.08 lakh crore.

Number of Mutual Fund Folios Also Climbs

The expansion of the mutual fund industry is also visible in the number of investor accounts.

As of August 31, 2026, the mutual fund industry had approximately 28.35 crore folios.

Equity, hybrid and solution-oriented schemes, where retail investors account for a significant portion of investments, had around 21.62 crore folios.

A folio represents an investor account with a mutual fund and can include multiple schemes held by the investor.

Bank Deposits Continue to Grow Too

The rise in the mutual fund-to-bank deposit ratio does not mean that bank deposits have stopped growing.

According to recent Economic Times reporting based on RBI data, bank deposits grew 17.8% year-on-year at the end of August 2026, reaching approximately Rs 278.7 lakh crore.

The sharp increase was influenced in part by foreign currency non-resident deposits after the RBI introduced a special window to attract dollar inflows.

Why the Mutual Fund Ratio Has Increased

The rising ratio reflects the much faster expansion of mutual fund assets over the period compared with the relative growth of the traditional deposit base.

Several factors can contribute to this shift, including greater investor awareness, the expansion of systematic investment plans, easier digital access to mutual funds and increased participation in equity and other market-linked products.

However, the ratio itself does not show that investors are abandoning bank deposits. Many households use both bank deposits and mutual funds for different financial objectives.

Mutual Funds and Bank Deposits Serve Different Purposes

Bank deposits and mutual funds are structurally different financial products.

Bank savings accounts and fixed deposits generally provide a more predictable return structure, while mutual fund returns depend on the underlying securities and market performance.

Mutual funds can provide exposure to equities, bonds, government securities and other assets depending on the scheme. Their value can rise or fall with market conditions.

Therefore, the increase in the MF AUM-to-bank deposit ratio should be viewed primarily as an indicator of the changing scale of India's investment industry rather than a direct measure of which product is suitable for an individual investor.

SIPs Have Become an Important Investment Route

Systematic Investment Plans, or SIPs, have become an important channel through which retail investors participate in mutual funds.

Instead of investing a large amount at once, an investor can contribute a fixed amount at regular intervals. This has helped make market-linked investments accessible to a wider section of investors.

The growth in mutual fund folios and overall AUM has occurred alongside the expansion of such systematic investment channels.

Mutual Fund AUM Has Grown Sixfold in 10 Years

AMFI's long-term data highlights the scale of the industry's expansion.

PeriodMutual Fund Industry AUMAugust 2016Rs 15.63 lakh croreAugust 2021Rs 36.59 lakh croreAugust 2026Rs 87.08 lakh crore

The industry's AUM increased by approximately six times between August 2016 and August 2026. Over the five years from August 2021 to August 2026, it increased by roughly three times.

What Does the 31% Ratio Mean?

The 31.6% figure is a ratio of total mutual fund AUM to total bank deposits. It does not mean that 31.6% of every individual's bank savings has moved into mutual funds.

For example, if total bank deposits were represented by Rs 100, mutual fund industry AUM would be equivalent to roughly Rs 31.6 under this comparison.

It is an industry-level measure and should not be interpreted as an individual household allocation guideline.

What Investors Should Keep in Mind

The growing size of the mutual fund industry provides evidence of increased participation in market-linked investments, but mutual funds carry market risk.

Investors should choose products based on their financial goals, investment horizon, liquidity needs and ability to tolerate fluctuations rather than simply following industry-wide growth trends.

Bank deposits and mutual funds can have different roles in a financial plan, and the appropriate balance depends on an individual's circumstances.

Key Takeaways

• Mutual fund AUM was around 31.6% of total bank deposits in August 2026.

• The ratio increased from 16.2% in March 2017 to more than 31% in August 2026.

• Mutual fund industry AUM stood at Rs 87.08 lakh crore on August 31, 2026.

• MF industry AUM has grown roughly sixfold in 10 years.

• The industry had around 28.35 crore folios at the end of August 2026.

• Bank deposits also recorded strong growth, reaching around Rs 278.7 lakh crore at the end of August.

• The 31.6% figure is an industry-level ratio and does not indicate that individual investors should allocate a particular percentage of their savings to mutual funds.

Bottom Line

India's mutual fund industry has expanded substantially over the past decade, with its AUM-to-bank deposit ratio rising from 16.2% in March 2017 to around 31.6% in August 2026.

With mutual fund AUM reaching Rs 87.08 lakh crore and the number of folios reaching 28.35 crore, the data highlights the growing scale of market-linked investments in India. At the same time, bank deposits remain a major component of household and institutional savings, showing that the growth of mutual funds is occurring alongside, rather than necessarily replacing, traditional banking products.

Disclaimer: Mutual funds are subject to market risks. Historical industry growth does not guarantee future returns. This article is for informational purposes and should not be considered investment advice.