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How wealth deposits have grown over the falling rate cycle has almost always been a function of the strategy firms employed during the rising rate cycle. Those that sacrificed margin to chase growth continue to experience growth, at a cost. Those that preserved margin at the expense of growth struggle to return to growth regardless of the strategy they engage today.
Falling Rate Wealth Deposits Beta vs Growth | Mar ‘26
Source(s): Curinos Wealth Deposit Analyzer | Note(s): Simple averages displayed | Dashed lines display median value of benchmark
The 15% of banks that sit in the elusive high beta + high growth quadrant have experienced 17% growth since the Fed started cutting rates in 2024. Their ability to pass along a higher beta is because they paid top-of-market rates on the way up. Those in the low beta + high growth quadrant (38% of firms) have attained similar growth (17%) but haven’t passed through as much beta (see chart). These firms had lower yields to start and have higher concentrations in savings/MMS versus CDs.
Banks in the quadrants with lower growth also tend to have lower balance concentrations in CDs but at the same time have struggled to acquire and retain balances in savings/MMS. They either didn’t lean into a CD strategy in the rising rate cycle, or they did so when rates were high. The result is that they acquired a high volume of single-service clients, and most have since intentionally pulled back to favor higher-quality relationships.
With uncertainty shrouding future Fed moves, these two maxims about wealth deposits are worth keeping in mind: One, maintaining high levels of growth is expensive. Two, without an eye toward quality relationships (including checking), growth can be worse than expensive, it can be futile.
