Speak to the author: tynan.bowyer@curinos.com
In commercial portfolios, balance churn has remained elevated year to date despite Fed Funds rates remaining flat. According to Curinos’ Commercial Deposit Analyzer Flow of Funds dashboard, which deconstructs the magnitude and nature of balance movement, nearly 5% of commercial portfolios have turned over as of July (see chart). The high churn highlights customers’ willingness to shop new financial institutions, even as rates hold flat, and that puts pressure on deposit costs as bankers replace attriting balances with more expensive acquisitions.
Flow of Funds Waterfall | All Products | All Banks | YTD
Source: Curinos Commercial Deposit Analyzer Notes: Data as of 7/31/2025
As the market anticipates a likely round of rates cuts starting next week, many institutions will look to drop rates quickly on their own portfolios to help relieve cost pressure. But with customers still willing to shop, this could present a risk for banks that cut rates too steeply—balances running off and relationships being scooped up by institutions with less aggressive betas. The strong rate competition and higher churn so far in 2025 warrants caution as institutions seek to manage balance flows and costs when rates start to drop again.
So far, acquisition has outpaced attrition, but at a cost: Interest rates on acquisition, already high, have crept steadily higher in recent months. This indicates that many banks are using high-rate products to entice prospective clients. Even with the anticipated lower Fed rates, reacquisition will remain costly as the rate paid on new balances is still well above average portfolio rates.
But even with acquisition outpacing attrition, most institutions have still seen a runoff of net balances, primarily because of net diminishment across existing customers. While causality is hard to pin down, this could signify that businesses are drawing down cash reserves in response to tariffs and macro uncertainty.
In this highly competitive and uncertain environment, line of sight matters. Curinos’ Flow of Funds dashboard can help institutions unpack and untangle their flows—into, within and out of commercial portfolios.
