Deposits360°® Monthly Industry Review
- Andrew Mitchell
- 1 day ago
- 3 min read
This month’s Review highlights emerging deposit trends and signals in DCG's Deposits360° Cross-Institution Analytics database and deposit pricing/volume models.
Checking Account Trends
Checking account behavior has diverged sharply across customer segments and account types. Retail customers have been slowly moving money back into non-interest-bearing checking accounts, with balances up 4.7% since the start of the easing cycle and 6.7% year-over-year. Business customers, meanwhile, have moved in the opposite direction, with non-interest-bearing checking balances down 4.6% since rate cuts began and 2.9% year-over-year.
Source: Darling Consulting Group Deposits360°®
The pattern is reversed in interest-bearing checking. Retail balances are down 8.5% since the first rate cut and 3.8% year-over-year, while business interest-bearing checking balances have grown 10.3% since the easing cycle began and 2.9% year-over-year. These shifts highlight how differently customers are responding to changing rate incentives.
Source: Darling Consulting Group Deposits360°®
Interest Rate Trends
Changes in customer behaviors are occurring against a backdrop of evolving deposit pricing dynamics. While Fed rate cuts have provided relief to funding costs, recent pricing trends suggest that much of that relief has already been realized. In fact, pricing for non-maturity deposits and newly opened CDs has been flat over the last quarter.
Source: Darling Consulting Group Deposits360°®
After the Fed cut its policy rate and then paused for an extended period (five months and counting), deposit pricing found its level and cost relief waned. However, at the same time, deposit growth in 2026 has fallen short of budgeted expectations at many institutions. Within DCG’s Cross-Institution data, NMDs are flat year to date and CDs have declined 1.5%. As institutions search for ways to stimulate deposit growth without materially increasing funding costs, CD pricing has emerged as one of the most important strategic decisions.
CD Pricing Challenges
April CD funding data shows a clear mismatch between retail term pricing and the FHLB wholesale funding curve. Retail CD offerings still reflect the defensive pricing structures built when the yield curve was inverted.
Source: Darling Consulting Group Deposits360°®
That gap matters even more given the current maturity mix of CD balances. Since 2023, institutions have steered depositors toward short-term CD Specials (<12M), a strategy that made sense when the yield curve suggested rates would move lower. But CD portfolios are now shorter than ever, and the market increasingly expects the Fed’s next move to be a rate hike.
Source: Darling Consulting Group Deposits360°®
Given the steepness in today’s curve and the short duration of existing balances, institutions will be faced with strategic decisions in the upcoming months as substantial portions of the portfolio reach maturity. Institutions have already begun adapting their CD pricing structure to better align with the wholesale curve while incentivizing CD customers to push funds out longer. This has the dual benefit of reducing near-term repricing risk while improving funding stability. To be sure, decisions made today around CD structure and pricing will influence future deposit growth and retention outcomes.
Positioning for Growth
The strategic repositioning of CD offerings becomes even more relevant when viewed against expected deposit growth trends. Time deposits are forecasted to see 0% growth over the next 12 months at current rate levels. DCG expects only about 3% total deposit growth. If inflation forces the Fed to move rates higher, total deposit growth may be reduced even further, to 2%.
Source: Darling Consulting Group Deposits360°®
With deposit cost relief largely exhausted, growth expectations muted, and funding curves sending new signals, institutions will need to be increasingly deliberate in how they price, structure, and retain deposits. Those that adapt quickly may be better positioned to protect margins, improve funding stability, and support balance sheet growth in an increasingly competitive market.
Darling Consulting Group will continue to monitor the Cross-Institution data in Deposits360° and bring you insights to help you manage your deposit base.
To learn more about how DCG's Cross-Institution Analytics can help drive strategic decision-making, click here.
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