B Mirror Report:  Fixed deposits with banks have declined in recent months as depositors increasingly opt for higher-yielding instruments or liquidate funds to cover election-related expenditures, sources say.

Although total deposits in the banking system rose by 3.42 per cent in the fourth quarter of 2025, growth in fixed deposits which make up nearly half of total deposits slowed sharply, according to bankers and analysts.

Industry experts noted that deposit patterns are shifting, with many fixed depositors moving funds into Monthly Income Schemes (MIS), Deposit Pension Schemes (DPS), Millennium Schemes, and Double-Benefit Schemes to maximize returns.

Data show that the growth of fixed deposits, accounting for 48.33 per cent of total deposits, dropped to 2.29 per cent during October–December 2025, down from 5.49 per cent in the preceding quarter (July–September 2025).

According to Bangladesh Bank, the total deposit liabilities (excluding interbank deposits) of scheduled banks increased by Tk 694 billion, or 3.42 per cent, to Tk 21.0 trillion in the October–December quarter. This is higher than the Tk 345 billion (1.73 per cent) and Tk 583 billion (3.20 per cent) growth recorded in the preceding quarter and the same quarter of the previous year, respectively.

The share of urban deposits in total deposits stood at 84.07 per cent, unchanged from the previous quarter, while the share of savings deposits declined slightly, from 20.66 per cent at the end of September 2025 to 20.49 per cent by December 31.

Fixed deposits rose by Tk 227 billion, or 2.29 per cent, to Tk 10.15 trillion during the quarter under review, compared with Tk 516 billion (5.49 per cent) in the previous quarter and Tk 268 billion (3.15 per cent) in the same quarter of 2024.

Dr. Md. Touhidul Alam Khan, Managing Director and CEO of NRBC Bank PLC, said the election cycle had a significant impact on market liquidity. Many investors either withdrew funds or chose not to renew fixed deposits to meet election-related expenses or maintain cash holdings during the government transition period.

“Consequently, we saw a trend where savings were liquidated and converted into cash,” he told the media

A treasury executive at a private commercial bank, speaking on condition of anonymity, said that depositors moved funds into MIS, DPS, Millennium, and Double-Benefit Schemes, which banks classify as “other deposits.”

“That explains why growth in fixed deposits slowed sharply, while other deposits grew 8.51 per cent in the December quarter, recovering from a negative 10.76 per cent in the previous quarter,” he added.