What a Deposit Actually CostsWide moat
JPMorgan Chase (JPM) — moat facet
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 the loan book is what a large bank is worth.
The cost of funding is the one number that separates banks that earn their cost of capital from banks that do not.
JPMorgan paid an average of 1.80% on total deposits in 2025, against 2.08% in 2024 and 1.70% in 20231. Inside that average the spread is wide: US non-interest-bearing balances averaged $572.0 billion and paid nothing, savings balances of $875.5 billion paid 1.41%, and interest-bearing demand accounts of $321.1 billion paid 3.26%2.
The mix is the franchise. A bank that funds itself mostly from time deposits and brokered money pays close to the market rate and has no advantage over anyone; a bank that funds itself from operating accounts pays far less and keeps the difference.
That difference compounds against $2.56 trillion. Every hundred basis points of funding advantage on that base is worth roughly $25 billion a year of pre-tax income — which is why the deposit franchise, not the loan book, is what a large bank is actually worth.
It is also why the migration matters more than the level. Deposits do not leave; they move within the bank, from accounts paying nothing to accounts paying something, and each migration is permanent.
The measure is the average rate paid against the policy rate. The wider that gap, the more of this business is a relationship rather than a price.
The average rate paid fell from 2.08% to 1.80% as policy rates came down, which flatters the year and says nothing about the franchise. The structural cost of funding is set by the mix, and the mix is drifting the wrong way.
Alongside $875.5bn of savings at 1.41% and $321.1bn of interest-bearing demand at 3.26%. The mix is the franchise: a bank funded from operating accounts pays far less than one funded from time deposits, and keeps the difference. The balance has fallen three years running.
Source: JPMorgan Chase Form 10-K, FY2025 ↗- 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 ↗
- 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 ↗