Liquidity & Balance Sheet
Core Deposits
Core deposits are a bank's stable, relationship-based funding — checking, savings, and smaller time deposits — excluding rate-sensitive jumbo CDs and brokered money. They are the cheapest and stickiest funding a bank has.
Formula
Derived from Schedule RC-E. The idea is to remove funding that chases rate and leaves quickly — large uninsured CDs and brokered deposits — leaving the relationship balances that stay through a rate cycle. Dividing by total funding gives the core-deposit ratio.
Why it matters
Core deposits are the foundation of a durable, low-cost funding base. A bank funded mostly by core deposits weathers rising rates and stress far better than one leaning on brokered or wholesale money, which reprices fast and runs in a panic.
How to interpret
Read core deposits as the core-deposit ratio (core ÷ total funding). A high ratio signals a stable franchise; a falling one means the bank is replacing departing relationship money with costlier, flightier funding — a classic pre-stress pattern.
Thresholds
| Range | Label | Interpretation |
|---|---|---|
| ≥ 85% of funding | Strong | Predominantly stable relationship funding. |
| 70-85% | Adequate | Solid core base with some wholesale reliance. |
| 50-70% | Watch | Meaningful dependence on rate-sensitive funding. |
| < 50% | Concern | Funding dominated by hot money; elevated liquidity risk. |
Worked example
Frequently asked
What is excluded from core deposits?
Large time deposits above the $250,000 insurance limit (jumbo CDs) and brokered deposits are excluded because they are rate-sensitive and prone to leave. What remains — checking, savings, and small CDs — is core.
Why are core deposits considered stable?
They come from ongoing customer relationships rather than rate-shopping, so they stay through rate cycles and stress events, giving the bank dependable, low-cost funding.
Sources
- FFIEC Call Report Schedule RC-E (Deposit Liabilities)
See Core Deposits across 4,335 US banks
BankRegReports ranks every FDIC-insured institution by Core Deposits, refreshed quarterly within 48 hours of FFIEC release.