Forty-Eight Basis Points on $957 BillionWide moat

Bank of America (BAC) — moat facet

Bank of America pays its consumer depositors less than half a percent, and the rate went down in the past year.

The clearest proof that Bank of America's consumer deposits are a moat is the price it pays for them. In the second quarter of 2026 Consumer Banking paid 0.48% on its deposits, down from 0.58% a year earlier1, on average balances of $957.0 billion2. Including the cost of branches, staff and systems, the bank puts the all-in cost of those deposits at 1.50%3.

Consumer Banking deposit spread (%)2.77%20242.92%2025Bank of America Form 10-K FY2025, Consumer Banking key statistics
The margin on holding a household's money.

The spread is the business. Consumer Banking's deposit spread, before noninterest costs, was 2.92% in 2025 against 2.77% in 20244. That is the margin the bank earns simply by holding a household's money and lending or investing it. Consumer Banking's net interest income was $35,309 million in 2025, about 81% of the segment's revenue56.

The rate paid fell even though the bank's interest-bearing deposits as a whole cost 2.35% in 20257. A bank whose depositors were shopping would have to raise rates to keep the money; this one lowered them. The segment returned 29% on its allocated capital in the second quarter of 20268, the highest of the four businesses.

None of this is guaranteed by contract. A depositor can move money in minutes, and the bank's own risk factors say so. What holds the money is habit, convenience and the sheer number of accounts that would have to be changed.

The all-in cost is still low. Including noninterest costs, Consumer Banking's cost of deposits was 1.46% a year earlier and 1.50% in the second quarter of 20269, so running the branches and systems costs about a point a year on the money they gather. The consumer bank ran at a 51% efficiency ratio in the quarter10.

The rate paid is published every quarter. A rise of several tenths of a point while market rates were unchanged would be the first sign that households had begun to ask for more, and the 29% return on allocated capital would follow it down.

Moat trajectory: Widening

Rate paid 0.58% to 0.48% in a year; deposit spread 2.77% to 2.92%.

The number that tests this moat
Reported
Consumer rate paid on deposits, latest quarter
0.48% (Q2 2026) vs 0.58% a year earlier

The price of the moat's raw material; a rise toward market rates would mean depositors have started to shop.

Source: Bank of America Q2 2026 presentation ↗
⚠ Threats to the moat
⚠ THREAT 01
The Rate Is Set by the Next Bank's Offer
The low deposit rate lasts only as long as no competitor chooses to pay much more, and the bank says so in its risk factors.
References
  1. ReportedIn the second quarter of 2026 Consumer Banking paid 0.48% on its deposits, down from 0.58% a year earlier, on average balances of $957.0 billion.
    Bank of America second-quarter 2026 earnings presentation, Form 8-K exhibit 99.2 - Consumer Banking rate paid and cost of deposits. — Q2 2026 · publ. 14 July 2026 · source ↗
  2. ReportedIn the second quarter of 2026 Consumer Banking paid 0.48% on its deposits, down from 0.58% a year earlier, on average balances of $957.0 billion.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - segment results, returns on allocated capital and business highlights. — Q2 2026 · publ. 14 July 2026 · source ↗
  3. ReportedIncluding the cost of branches, staff and systems, the bank puts the all-in cost of those deposits at 1.50%.
    Bank of America second-quarter 2026 earnings presentation, Form 8-K exhibit 99.2 - Consumer Banking rate paid and cost of deposits. — Q2 2026 · publ. 14 July 2026 · source ↗
  4. ReportedConsumer Banking's deposit spread, before noninterest costs, was 2.92% in 2025 against 2.77% in 2024.
    Bank of America Form 10-K for fiscal 2025 - business segment note and segment key statistics. — FY2025 · publ. 25 February 2026 · source ↗
  5. ReportedConsumer Banking's net interest income was $35,309 million in 2025, about 81% of the segment's revenue.
    Bank of America Form 10-K for fiscal 2025 - business segment note and segment key statistics. — FY2025 · publ. 25 February 2026 · source ↗
  6. Moat Explorer calcConsumer Banking's net interest income was $35,309 million in 2025, about 81% of the segment's revenue.
    Moat Explorer calculation from Bank of America's reported figures ($ millions unless stated). Deposits: cost of total deposits = interest on interest-bearing deposits / (average interest-bearing + average noninterest-bearing deposits): 2019 7,188 / 1,380,326 = 0.52%; 2021 537 / 1,914,286 = 0.03%; 2022 4,718 / 1,986,158 = 0.24%; 2023 26,163 / 1,887,541 = 1.39%; 2024 38,442 / 1,924,106 = 2.00%; 2025 34,513 / 1,984,182 = 1.74% (1,469,705 + 514,477 = 1,984,182, about $1.98 trillion). Average total deposits 2015 1,155,860; 2021 1,914,286; 2022 1,986,158 (about $1.99 trillion); 2015 to 2025 1,984,182 / 1,155,860 - 1 = 72%. Noninterest-bearing share 744,035 / 1,914,286 = 38.9% (2021); 514,477 / 1,984,182 = 25.9% (2025). Noninterest-bearing decline 751,470 - 514,477 = 236,993 (about $237 billion). JPMorgan comparison: deposit cost gap 1.80% - 1.74% = 0.06 points; 0.0006 x 1,984,182 = about 1,190 (about $1.2 billion). JPMorgan revenue per dollar of average deposits 182,447 / 2,506,565 = 7.3 cents; Bank of America 113,097 / 1,984,182 = 5.7 cents. JPMorgan year-end deposits 2,559,320 / 2,018,729 - 1 = 27%; revenue 182,447 / 113,097 - 1 = 61%; market value 935.79 / 391.80 = 2.4 times. Net income margin JPMorgan 57,048 / 182,447 = 31.3%; Bank of America 30,509 / 113,097 = 27.0%. Efficiency gap 61.65% - 52% = 9.65 points x 113,097 = about 10,914 (about $10.9 billion). Loans to deposits 1,185,700 / 2,018,729 = 58.7%. Uninsured deposits 723.0 + 134.9 = 857.9 billion; 857.9 / 2,018.7 = 42.5%; insured and other 2,018.7 - 857.9 = 1,160.8 billion. Consumer deposits per checking account 957.0 billion / 38.7 million = about $24,700. Securities: held-to-maturity unrealised loss as a share of common equity 108,596 / 244,800 = 44% (2022); 82,094 / 276,100 = 30% (June 2026). Held-to-maturity amortised cost 2021 674,591 - 2025 522,685 = 151,906 (about $152 billion); 2020 438,279 to 2021 674,591 = +236,312 (about $236 billion); 2021 fair value 665,890 - cost 674,591 = -8,701. Runoff time 505,828 / 34,794 = 14.5 years. Agency MBS share of loss 67,309 / 80,257 = 84%. Net interest income H1 31,742 / 29,113 - 1 = 9.0%. Capital: CET1 headroom (11.2% - 10.0%) x 1,792 billion = about 21.5 billion; 2027 minimum 4.5% + 3.5% + 2.5% = 10.5%. Capital returned 2025 (8.1 + 21.433) / 29.055 = 101% of net income to common. Average diluted shares 7,680.9 / 11,236.2 - 1 = -31.6%. EPS growth (3.81 / 1.31)^(1/10) - 1 = 11.3% a year. Price to tangible book 56.03 / 29.37 = 1.91. Revenue 2023 102,769 to 2025 113,097 = +10%. Compensation 42,346 / 69,727 = 61% of noninterest expense. Financial centers 3,530 / 3,664 - 1 = -3.7%. Noninterest expense Q2 2026 18,627 / 17,183 - 1 = 8.4%. Berkshire holding 483,394,015 / 1,032,852,006 - 1 = -53%. Investment banking fees Q2 2025 implied 2.1 / 1.5 = 1.4 billion. Segments (FTE, 2025): segment revenue 43,673 + 24,883 + 24,108 + 24,096 = 116,760; less All Other 3,054 = 113,706; less FTE adjustment 609 = 113,097. Shares of total FTE revenue: Consumer 43,673 / 113,706 = 38.4%; GWIM 24,883 / 113,706 = 21.9%. Shares of net income 30,509: Consumer 12,245 = 40.1%; Global Banking 7,793 = 25.5%; Global Markets 6,111 = 20.0%; GWIM 4,670 = 15.3%. Net income margins: Consumer 12,245 / 43,673 = 28.0%; GWIM 4,670 / 24,883 = 18.8% (2024 4,263 / 22,929 = 18.6%; 2023 3,947 / 21,105 = 18.7%); Global Banking 7,793 / 24,108 = 32.3%; Global Markets 6,111 / 24,096 = 25.4%. Consumer net interest income 35,309 / 43,673 = 81%; Consumer provision 4,649 / 5,675 = 82%. Growth 2023-2025: Consumer 43,673 / 42,031 - 1 = 3.9%; GWIM 24,883 / 21,105 - 1 = 17.9%; Global Markets 24,096 / 19,533 - 1 = 23.4%; Global Banking net income 7,793 / 10,072 - 1 = -23%. Consumer H1 2026 revenue 11,336 + 11,049 = 22,385. GWIM net interest income 7,197 / 24,883 = 29%. Revenue per dollar of year-end assets: Global Markets 24,096 / 1,032,858 = 2.3 cents; Consumer 43,673 / 1,039,346 = 4.2 cents. GWIM client balances 4,751,394 / 4,252,106 - 1 = 11.7%, increase 499,288; net flows 81,997 / 4,252,106 = 1.9%; consumer investment assets 639.5 / 599.1 - 1 = 6.7%. Revenue per dollar of balances: Private Bank 4,167 / 759,082 = 0.55%; Merrill 20,716 / 3,992,312 = 0.52%; Private Bank share of GWIM balances 759,082 / 4,751,394 = 16% and revenue 4,167 / 24,883 = 17%. Investment and brokerage services 19,956 / 17,766 - 1 = 12.3%. Common equity 277,251 / total assets 3,411,738 = 8.1%. AUM net flows 81,997 / 2,177,708 = 3.8%. Held-to-maturity loss 2023 97,994 / 263,249 = 37%. Share price 56.03 / 52-week high 65.23 - 1 = -14%. First half 2026 (Q1 + Q2): Consumer Banking revenue 11,049 + 11,336 = 22,385 and net income 3,060 + 3,281 = 6,341; Global Banking net income 2,087 + 2,046 = 4,133; Global Markets revenue 7,109 + 8,022 = 15,131 - segment shares, margins and growth. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Bank of America's Forms 10-K and 10-Q, earnings releases, JPMorgan's 10-K, Berkshire 13F tables and market data; operands shown in the source line.
  7. ReportedThe rate paid fell even though the bank's interest-bearing deposits as a whole cost 2.35% in 2025.
    Bank of America Form 10-K for fiscal 2025 - average balance sheet, deposits, net interest income and rate sensitivity. — FY2025 · publ. 25 February 2026 · source ↗
  8. ReportedThe segment returned 29% on its allocated capital in the second quarter of 2026, the highest of the four businesses.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - segment results, returns on allocated capital and business highlights. — Q2 2026 · publ. 14 July 2026 · source ↗
  9. ReportedIncluding noninterest costs, Consumer Banking's cost of deposits was 1.46% a year earlier and 1.50% in the second quarter of 2026, so running the branches and systems costs about a point a year on the money they gather.
    Bank of America second-quarter 2026 earnings presentation, Form 8-K exhibit 99.2 - Consumer Banking rate paid and cost of deposits. — Q2 2026 · publ. 14 July 2026 · source ↗
  10. ReportedThe consumer bank ran at a 51% efficiency ratio in the quarter.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consolidated results, credit quality, capital and forward-looking risks. — Q2 2026 · publ. 14 July 2026 · source ↗
Sources
Generated September 25, 2026