Work out cost of deposits instantly with clear inputs, formula shown and shareable results.
Cost of deposits is interest paid over average deposits. Because current and savings balances pay little or nothing, a high share of them pulls the blended cost well below the rate the bank actually offers on term money.
Cost of deposits
Cost = interest paid / average deposits; implied term rate = cost / term deposit share
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
Because it sets the floor under lending rates. The bank with the cheapest deposits can price loans most keenly.
Ideally yes. Period-end deposits can be inflated by short-term inflows and distort the ratio.