Cost of deposits: Cost of deposits is the rate a bank pays on its deposits alone, ignoring everything else it borrows.
How it is calculated
Annualized interest expense on deposits divided by average total deposits, with deposits that pay nothing left in the denominator.
Formula
Cost of deposits = annualized deposit interest expense / average total deposits
What banks reported in Q2 2026
Across every bank that filed for Q2 2026, the median cost of deposits was 1.76%, with the middle half between 1.37% and 2.19%. The right comparison is almost always the row for the bank’s own size rather than the industry line.
| Bank size (total assets) | Bottom quartile | Median | Top quartile |
|---|---|---|---|
| Under $100M | 1.07% | 1.51% | 1.99% |
| $100M - $300M | 1.31% | 1.69% | 2.11% |
| $300M - $1B | 1.42% | 1.80% | 2.20% |
| $1B - $3B | 1.57% | 1.94% | 2.32% |
| $3B - $10B | 1.53% | 1.97% | 2.33% |
| $10B - $100B | 1.43% | 1.85% | 2.34% |
| Over $100B | 1.52% | 1.86% | 2.47% |
Source: BankingLens, computed from FFIEC call reports for the quarter ending June 30, 2026. Quartiles are calculated across the full population of filing banks in each size band, not sampled. Non-insured non-deposit trust companies are left out of every statistic: they take no deposits and make no loans, so a margin or a funding cost computed for them has no meaning.
How to read it
Cost of funds includes borrowings and this does not, which makes cost of deposits the cleaner read on the deposit franchise itself. It runs below cost of funds at almost every bank, because noninterest bearing balances are in the denominator and contribute nothing to the numerator.
The common mistake. Comparing it across asset bands. Large banks pay materially more for deposits than small ones because they compete in markets that shop, so a community bank reading below a money center bank is ordinary rather than impressive.
Go deeper
- What is a good cost of funds for a bank?
- Deposit beta explained
- BankingLens pricing and what a subscription adds: percentile rank against the bank’s own FFIEC peer group, fourteen quarters of trend, and the flags an examiner reaches for first.
See also. Cost of funds, Deposit beta, Core deposits, Brokered deposits.
Every figure on this page is computed from FFIEC call reports for the quarter ending June 30, 2026 and is not modeled, estimated or sampled. This page is generated by _tools/seo/build_glossary.mjs and carries no figure that was typed in. See our methodology and disclaimer. Definitions are general guidance, not regulatory or investment advice.