Search
Close this search box.

Growing Deposits Is Getting More Expensive Across The Board

The price for new deposits keeps climbing for banking institutions – especially for those dependent on consumer accounts – as high interest rates and pitched competition continue to reprice back books across the industry. We expect this trend to continue well into 2024. 

The latest numbers from the Curinos Deposit Analyzers show the average marginal cost of funds (mCOF) for new consumer deposits exceeding 11% at the end of 2023 (see chart), up nearly a full percentage point from two months earlier. Wealth mCOF saw an even sharper spike, while the average cost for small business and commercial deposits each rose roughly 20 basis points between October and December. 

At these mCOFs, a bank and credit union needs a well-thought-out reason for wanting to grow expensive deposits, and those moving forward need an innovative, data-driven deposit pricing strategy so they don’t pay any more than they have to.    

For more on mCOF trends, see my article “Deposits in 2024: It’s Gonna Cost You” in the latest Curinos Review. 

12-Month Marginal Cost of Funds by Business Line​

Consumer mCOF rose close to 100 bp between October and December​ in the face of aggressive competition for deposits and back-book repricing

Source(s): Curinos Retail Deposit Analyzer, Jan ‘23 | Note(s): 12-month mCOF calculated from deposits acquired from Jan ‘23 – Dec ‘23

February 27, 2024

Want Small Business Deposits? Focus On Primacy

By providing small businesses access to credit and other services, banks can realize better performance in their overall deposit portfolios.
READ TIME: 1 MIN

February 22, 2024

CD Growth Still Strong, But Trend Line Has Gone Flat

Even though their growth may be slowing, CDs will continue to represent a substantial share of deposits and will be critical to a depository institution’s success.
READ TIME: 1 MIN

February 20, 2024

Wealth Clients Were Late To The CD Party And Will Likely Leave Early

Banks should adopt the high-touch, personalized engagement of wealth advisors by proactively reaching out to clients prior to maturity.
READ TIME: 1 MIN
  • Author
  • Want to go further?

    Contact us to learn more about how Curinos can help you navigate today and prepare for tomorrow.