The state of U.S. deposits remains one of the most important and tricky issues for the banking industry today. Financial-services companies remain awash in deposits as loan demand remains lackluster and consumers are cautious about spending.
Deposit data will be especially important as the Fed begins to raise rates next year. Deposit-rich providers will be in a good position if loan growth improves as rates rise. If loans are anemic, deposit-rich providers will have to determine which deposit customers are worth keeping in a higher-rate environment. Those that need deposits will face pressure to pay up to attract new money, especially if loan growth increases.
Our latest data show that deposit balances per consumer household are up 18.4% from 2019 averages.
Bank coffers also still hold a large of stimulus funds that were deposited into customer accounts earlier in the year.
Just over one-third of customers have spent the entire amount of stimulus funds received (teal at right) and a similar amount have saved the entire amount of stimulus (black at right).
Round 1 (April) Stimulus Deposits Runoff | Checking Deposits