---
title: "Deposit Growth Rate: definition, formula, and thresholds"
description: "The deposit growth rate is the year-over-year percentage change in a bank's total deposits: a direct read on whether its funding base is growing, stable, or running off."
canonical_url: https://www.bankregreports.com/glossary/deposit-growth-rate/
source: BankRegReports
category: "Liquidity & Balance Sheet"
units: "%"
schedule: "Schedule RC-E"
---

# Deposit Growth Rate

> The deposit growth rate is the year-over-year percentage change in a bank's total deposits: a direct read on whether its funding base is growing, stable, or running off.

## Formula

```
Deposit Growth Rate = (Total Deposits − Total Deposits 4 Quarters Ago) / Total Deposits 4 Quarters Ago
```

Current-quarter total deposits minus total deposits four quarters earlier, divided by the prior-year figure.

## Why it matters

Deposits are a bank's cheapest, stickiest funding. Shrinking deposits force a bank toward costlier wholesale funding or asset sales, pressuring margins and liquidity. Deposit flight was the proximate trigger of the 2023 regional-bank failures.

## How to read it

Modest positive growth is healthy. A sharp decline (especially in a single quarter) can signal a confidence problem or aggressive runoff of high-cost deposits. Read alongside the uninsured-deposit ratio (which scales the run-risk) and the cost of funds (which shows what the bank is paying to keep deposits).

## Thresholds

| Range | Reading | What it means |
|---|---|---|
| > 5% | Growing | Healthy, expanding core funding base. |
| 0–5% | Stable | Flat funding; typical in competitive markets. |
| −5–0% | Runoff | Modest deposit loss; watch funding mix and cost. |
| < −5% | Flight | Material deposit loss, liquidity and confidence risk. |


## Worked example

A bank whose deposits fell from $5.4 billion to $5.0 billion over the year posted a −7.4% deposit growth rate. A meaningful runoff that would push it toward FHLB advances or brokered deposits to fund its assets.

## Questions

### Why does deposit growth matter more than asset growth for safety?

Deposits are the funding side of the balance sheet. A bank can usually find assets to buy, but losing low-cost, stable deposits forces it into expensive, flighty wholesale funding, exactly the squeeze that turned unrealized securities losses into failures in 2023.

### Is shrinking deposits always bad?

Not always. Some banks deliberately let high-cost, rate-chasing deposits run off to protect their margin. The concern is involuntary flight of core relationship deposits, which is best read together with the uninsured-deposit ratio and cost of funds.

## Sources

- [FFIEC Call Report Schedule RC-E (Deposits)](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF)
- [FFIEC UBPR Growth Rates](https://www.ffiec.gov/data/ubpr)

## Related metrics

- [Asset Growth Rate](https://www.bankregreports.com/glossary/asset-growth-rate/): The asset growth rate is the year-over-year percentage change in a bank's total assets. It captures how fast the balance sheet is expanding or contracting.
- [Uninsured Deposit Ratio](https://www.bankregreports.com/glossary/uninsured-deposit-ratio/): The Uninsured Deposit Ratio measures deposits above the $250K FDIC insurance threshold as a percentage of total deposits. Made infamous by the Silicon Valley Bank failure in 2023, it captures deposit base run-risk.
- [Cost of Funds](https://www.bankregreports.com/glossary/cost-of-funds/): Cost of funds is the interest rate a bank pays, on average, for the money it lends and invests: annualized interest expense divided by average funding from deposits and borrowings. It is the bank's own cost of money and the expense side of net interest margin.
- [Core Deposit Ratio](https://www.bankregreports.com/glossary/core-deposit-ratio/): The Core Deposit Ratio measures 'core' deposits (total deposits less time deposits over $250,000 and less brokered deposits of $250,000 or less) as a percentage of total deposits. Core deposits are the most stable, lowest-cost funding source available to a bank.

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