Savings in deposits by the households rose, however, to Rs 1 trillion (17 percent) in the year to Rs 6.91 trillion in FY14 as against Rs 5.91 trillion in 2012-13.
They constituted about 59 percent of the gross financial savings, of which about 53 percent constituted bank deposits.
Savings in shares and debentures dropped 22 percent to Rs 33,700 crore in FY14, from Rs 43,000 in the previous fiscal, according to a RBI report.
Savings by individuals in MFs (through shares and debentures) saw a 40 percent drop to Rs 21,000 crore in the reporting year from Rs 35,000 crore, while savings in currency declined 9 percent to Rs 1.02 trillion from Rs 1.12 trillion.
Net financial savings of households, which is the gross financial saving minus financial liabilities, rose 13 percent to Rs 8.19 trillion from Rs 7.22 trillion in 2012-13.
The RBI report said: "The gross domestic savings rate as percentral statistics office's (CSO) estimates declined to 30.1 percent in FY13 from 31.3 percent in FY12, mainly on account of a decline in the rate of household physical savings.
"The savings rate dipped to the lowest in the past nine years and has accentuated the macroeconomic imbalances. The household savings rate have generally hovered around 23 percent since FY04."
However, looking ahead, the RBI expressed the hope that the measures announced in the Budget 2015 will help improve both investment and savings.
The Budget has raised the personal income tax limit to Rs 2.5 lakh, which will increase disposable income and lead to a rise in investment limit under section 80C of the Income-Tax Act. It also raised annual ceiling limit in PPF to Rs 1.5 lakh, which will also encourage savings and improve financing of investment, the RBI said.
The proposal to increase the deduction limit on account of interest on loan with respect to self-occupied house property is also expected to increase households' physical savings. The RBI has complemented these steps by providing incentives to infrastructure and affordable housing.

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