The Deposit FranchiseWide moat

JPMorgan Chase (JPM) — moat facet

Two and a half trillion dollars at an average cost of 1.80 percent, of which 572 billion pays nothing at all -- the cheapest large pool of money in finance, and the one thing here that cannot be bought.

Everything else about a bank is downstream of what it pays for money.

Deposits and what they cost, 2025$2,559bnTotal deposits$1,493bnLoans1.80%Average rate paidA loans-to-deposits ratio of 58%: the bank lends barely more than half of what it holds.
Every 100 basis points of funding advantage on this base is worth about $25bn a year.

JPMorgan held $2,559.3 billion of deposits at the end of 2025, against $1,493.4 billion of loans — a loans-to-deposits ratio of 58%1. Deposits are 63% of total liabilities2. The average rate paid across all of it in 2025 was 1.80%, down from 2.08% the year before3, at a time when the Federal Reserve's policy rate was several points higher.

That gap is the moat, stated arithmetically. A bank that funds itself at 1.80% and lends at six can absorb a great deal of credit trouble before it has a problem. A challenger paying five to attract the same balances cannot.

The reason the rate is that low is behavioural rather than clever. $572 billion of the US balances are non-interest-bearing — operating accounts where companies and households keep working cash and do not shop the rate4. Another $875 billion sits in savings paying 1.41%5. People are slow to move money that is doing a job.

What makes it a franchise rather than a windfall is that it has to be won one account at a time and cannot be bought. JPMorgan opened 1.7 million net new checking accounts in 20256.

The number to watch is the non-interest-bearing balance, which has fallen three years running — $635.8 billion, then $611.7 billion, then $572.0 billion7. That is the free money shrinking, and it is the first place the moat would show wear.

Moat trajectory: Holding steady

Deposits grew 7% year on year and the loans-to-deposits ratio remains at 58%, so the funding base is expanding and under-deployed. What is not improving is the mix: non-interest-bearing US balances have fallen three years running, from $635.8bn to $572.0bn.

The number that tests this moat
Reported
Average rate paid on total deposits
1.80% on $2.56 trillion

Down from 2.08% in 2024, at a time when policy rates were several points higher. Every hundred basis points of funding advantage on that base is worth roughly $25bn a year of pre-tax income. Watch the average rate against the policy rate — the wider the gap, the more of this is a relationship rather than a price.

Source: JPMorgan Chase Form 10-K, FY2025 ↗
Aspects of the moat
DIG DEEPER 01
What a Deposit Actually Costs
Every hundred basis points of funding advantage on 2.56 trillion dollars is worth about 25 billion a year, which is why the deposit base rather than…
DIG DEEPER 02
Fifty-Eight Percent
Lending barely more than half of what you hold is not inefficiency; it is the freedom never to make a loan you do not want.
DIG DEEPER 03
Operating Accounts Versus Hot Money
The distinction that decides whether a deposit base is a franchise or a fuse is not insured versus uninsured -- it is whether the money is there to…
DIG DEEPER 04
Winning Them One at a Time
1.7 million net new checking accounts in a year is a rate no amount of capital can accelerate, which is exactly why the franchise is worth what it is.
⚠ Threats to the moat
⚠ THREAT 01
Sixty-One Percent of the Deposits Are Uninsured
1,558.6 billion dollars sits above the insurance limit, and in 2023 the industry learned how fast that can move from a phone.
⚠ THREAT 02
The Free Money Is Shrinking
Non-interest-bearing balances have fallen three years running -- the free funding leaking away one migration at a time, permanently.
References
  1. ReportedLoans of $1,493,429M against deposits of $2,559,320M — a loans-to-deposits ratio of 58%, from 56% and 55%.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  2. ReportedDeposits were 63% of total liabilities at the end of 2025.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  3. ReportedThe average rate paid on total deposits was 1.80% in 2025, against 2.08% in 2024 and 1.70% in 2023.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  4. ReportedUS non-interest-bearing average balances were $572,014M in 2025, from $611,734M in 2024 and $635,791M in 2023.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  5. ReportedUS savings average balances of $875,519M paid 1.41% and interest-bearing demand balances of $321,145M paid 3.26%.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  6. ReportedThe firm opened 1.7 million net new checking accounts in 2025.
    JPMorgan Chase & Co., fourth-quarter and full-year 2025 earnings release (Form 8-K, exhibit 99.1) — fourth-quarter net income $13.0bn ($4.63 per share), or $14.7bn ($5.23) excluding a significant item; full-year 2025 net income $57.0bn ($20.02 per share), 2025 ROE 17% and ROTCE 20%. Fourth-quarter reported revenue $45.8bn and managed revenue $46.8bn; net interest income $25.1bn, up 7%; expense $24.0bn; credit costs $4.7bn with $2.5bn of net charge-offs. CET1 Standardized 14.5% and Advanced 14.1%, total loss-absorbing capacity $564bn, Standardized RWA $2.0tn, cash and marketable securities $1.5tn; book value per share $126.99 up 9% and tangible book value per share $107.56 up 11%; Basel III CET1 capital $288bn; supplementary leverage ratio 5.8%; net payout over the last twelve months 82%. Segment returns: CCB 4Q ROE 25% and 2025 ROE 32% with a Card Services net charge-off rate of 3.14%, debit and credit card sales volume up 7% and active mobile customers up 7%; CIB 4Q ROE 19% and 2025 ROE 18%, investment banking fees down 5% year on year with a #1 ranking for global investment banking fees at 8.4% wallet share for the year, markets revenue up 17%; AWM 4Q ROE 44% and 2025 ROE 40%, AUM $4.8tn up 18%. Payments revenue reached a record $5.1bn. In 2025 the firm opened 1.7 million net new checking accounts and 10.4 million new credit card accounts and grew wealth management households to over 3 million. The significant item in 4Q25 was a $2.2bn credit reserve established for the forward purchase commitment of the Apple credit card portfolio, a $0.60 decrease in EPS. — Q4 and FY2025 · publ. 2026-01-13 · source ↗
  7. ReportedUS non-interest-bearing average balances were $572,014M in 2025, from $611,734M in 2024 and $635,791M in 2023.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
Sources
Generated September 23, 2026