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Spread Between Lending And Deposit Calculator

Work out spread between lending and deposit instantly with clear inputs, formula shown and shareable results.

About Spread Between Lending And Deposit Calculator

A bank's real spread depends on its deposit mix, not just its term deposit rate. Low-cost current and savings balances pay a fraction of the term rate, so a high share of them lifts the spread materially.

Formula

Blended spread

Blended cost = term rate × (1 - CASA share) + low-cost rate × CASA share; spread = lending rate - blended cost

Worked example

With the default values below, Spread Between Lending And Deposit Calculator returns Spread On Blended Funding of 6.1210%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Average Lending Rateaccepts 0–100 %
10.5 %
Average Deposit Rateaccepts 0–100 %
5.8 %
Loan Book Sizeminimum 0
800,000,000
Share Of Low-Cost Depositsaccepts 0–100 %
35 %

Results

Spread On Blended Funding
6.1210%
Spread On Term Deposit Rate Alone
4.7000%
Blended Cost Of Deposits
4.3790%
Annual Spread Income
$48,968,000.00

Step by step

  1. 1Values used
  2. 2Blended spread
  3. 3Spread On Blended Funding= 6.1210
  4. 4Spread On Term Deposit Rate Alone= 4.7000
  5. 5Blended Cost Of Deposits= 4.3790
  6. 6Annual Spread Income= 48,968,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • 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.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

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.

Frequently Asked Questions

Why is a high share of low-cost deposits so valuable?

It permanently reduces funding cost, which is why banks compete hard for salary and operating accounts.

Does the spread equal the net interest margin?

Not exactly. Margin is measured on earning assets and includes investments, not just the loan book.

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