During COVID, the average consumer wallet expanded considerably thanks to three waves of stimulus deposits from the Federal government and a general lack of consumer spending driven by business shutdowns. According to Curinos’ Retail Deposit Analyzer, this expansion drove the average consumer balance from $19K to more than $23K over the two years, far above the steady levels of monthly growth that had been the norm for the previous five years.
At first, banks, community banks and credit unions welcomed the excess deposits, which were earning record low rates in both savings and checking accounts. But then came 2022, often referred to as the year of “revenge spending.” Customers drew down their excess savings to splurge on that long-awaited vacation and other deferred expenditures as the economy reopened, showing that the increase in savings was but a temporary phenomenon. FIs became increasingly alarmed at the pace of deposit runoff, with forecasters scrambling to pinpoint when the excess surge would dissipate and withdrawals would bottom out.
That happened in the second half of 2023. Since then, consumers have returned fairly consistently to the pre-COVID norm of slowly adding balances, which by the end of 2024 saw the average consumer wallet once again reach the peak of $23K in balances that was prematurely hit in 2022 (see chart). In this higher-for-longer rate environment, consumer behavior appears to have returned to a modicum of predictability, at least for now.
Don’t miss the session by Adam Stockton at ICBA LIVE 2025 in Nashville, March 11-14. Our Managing Director, Retail will discuss retail deposit trends and how to position your community bank for profitable growth in the upcoming year.
Average customer balances have rebounded from
“revenge spending” to their pre-COVID trajectory.
Source(s): Curinos Consumer Deposit Analyzer | Note(s): Online banks excluded. Simple averages displayed.
