Think all of the biggest banks are the same? Think again.

One of the least exciting parts about a bank is its deposits. Although the four biggest banks in America -- JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and Citigroup (NYSE:C) -- have more than $4.5 trillion in deposits at last count, few investors would suggest it's something they keep an eye on.

But it turns out the deposits arena is one more where Wells Fargo once again tops its peers, and it actually means billions to its bottom line.

Impressive growth
A quick glance at the growth in deposits of the biggest banks over the past year reveals that Wells Fargo has added more to its deposits ($84 billion) than Bank of America and Citigroup combined:


Q1 2013

Q1 2014


Growth (%)

Wells Fargo





JPMorgan Chase





Bank of America










Source: Company investor relations

This growth is undoubtedly a good thing, but it's critical to remember that deposits at banks are a liability and are the principal way they borrow money.

At their core, banks are used to safely hold money from consumers and in turn pool that money together to lend it back out. The banks charge interest on the loans, but they also have to pay interest themselves to the people and institutions they're borrowing from.

What banks pay to customers is minuscule, and it's a wildly inexpensive and effective way to borrow money. And it turns out it's here where Wells Fargo once more delivers an incredible lead.

The staggering lead
At its latest investor day, Wells Fargo revealed a chart showing how it funds itself relative to its peers: 

Source: Company investor relations.

Wells Fargo has an impressive lead in its ability to fund itself through the wildly cheap deposits. And as a result of having such an impressive amount of its funding from deposits, it saved itself billions in the first quarter alone:

Source: Company investor relations.

In the case of Bank of America, if 70% of its funding came from deposits (on which it paid just 0.16%) instead of other sources, a back-of-the-envelope calculation reveals that it would've saved an amazing $750 million in the first quarter alone.

Or if you'd like to think of it a little differently, if Wells Fargo paid 0.76% on its liabilities -- the average of JPMorgan Chase, Bank of America, and Citigroup -- it would've shelled out an addition $1.6 billion in interest payments through the first three months of the year.

Wells Fargo has a number of compelling ways in which it beats out its three biggest peers, and while it may not be the most exciting, its leadership in funding itself through wildly cheap deposits is one more to add to the list.


Patrick Morris owns shares of Bank of America. The Motley Fool recommends Bank of America and Wells Fargo; owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo, and has options on Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.