Deposit gathering is not getting easier. In April’s ProSight Executive Report, “Deposit Optimization Strategies,” Katie Kuehner-Hebert’s article “The Quest for Deposits in Uncertain Times” makes clear that banks and credit unions are operating in a market shaped by inflation pressure, an unclear path for rates, and sharper competition for customer dollars.
The good news is that deposits did grow in 2025. The harder part is understanding where that growth is coming from—and where it is not.
Here are a few key takeaways:
Affluent households and small businesses are doing much of the heavy lifting. Near-year-end deposit balances in 2025 were higher than they were in 2024, with affluent customers and small businesses driving much of the increase. Tom Hoscheidt, managing director of research at ProSight, said small-business deposits grew more than expected, helped by a positive economy and new stimulus in last year’s Big Beautiful Bill. He also noted that business customers often carry larger balances because borrowed funds sit in checking accounts as operating capital.
Mass-market consumers are under more pressure. Inflation and higher everyday costs cut into disposable income for many households in 2025, and Hoscheidt said an uptick in unemployment “isn’t helping things either,” with many still living paycheck to paycheck. That matters because “mass market” households—those with under $100,000 in investable assets—account for half of U.S. households but just 11% of deposit balances, according to ProSight Banking Outlook: 2026 Trends. Wealthy households, defined as those with over $500,000 in investable assets, hold 61% of deposits.
Rate competition is still intense, even in an easing cycle. Hoscheidt said, “Banks are hesitant to lower the rates they pay because there is so much competition now for deposits.” That is a notable change from the 2018-19 easing cycle, when there were fewer alternatives for depositors. If the Fed resumes easing, he expects deposit growth to pick up again, especially as the incentive to move funds into alternatives weakens.
Different banks are pulling different deposit levers. Larger banks often compete on convenience and primacy more than rates. Direct and online banks can be more aggressive on pricing. Community banks, meanwhile, are often less focused on rate competition and more focused on business customers and customized service. Pinnacle Financial Partners is one example, using more than 10 specialty deposit programs and pairing industry expertise with “trained experts putting the right products before our customers,” said Rick Arthur, Pinnacle’s executive vice president of consumer, small business, and specialty deposits.
The bigger opportunity may be deepening existing relationships. The article suggests that adding large numbers of new checking households will remain difficult. Deposit growth is more likely to come from broadening and deepening relationships with existing customers, especially as consumers continue to keep a large share of balances at their primary institution.
The message: deposit strategy is becoming more segmented. Banks are not just competing for dollars—they are competing for the right customers, the right relationships, and the kind of primacy that holds when conditions stay uncertain.
