Please ensure Javascript is enabled for purposes of website accessibility

Deposits Surge at Big Banks During Coronavirus Pandemic

By Bram Berkowitz – Updated Apr 1, 2020 at 11:38AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The 25 largest banks in the U.S. have brought in more than $420 billion in deposits in recent weeks. However, total borrowings have also been growing at a high clip.

Recent data from the Federal Reserve shows that people put more deposits in American banks between Feb. 26 and March 18 than in any single month of 2019.

Deposits at all domestically chartered commercial banks in the U.S. on a seasonally adjusted basis increased by almost half a trillion dollars in that three-week time frame. That's more than deposits rose between February and August of 2019. 

Bank of America

Image Source: Getty

Big banks carried most of the weight, as deposits at the 25 largest domestically chartered commercial banks in the U.S. increased by $422 billion on a seasonally adjusted basis between Feb. 26 and March 18.

"Goliath is winning when it comes to a potential crisis such as this because there's a flight to quality," Mike Mayo, a bank analyst at Wells Fargo, said in an interview with Bloomberg. "Whether you believe the label 'too big to fail' or not, it sure doesn't hurt to attract deposits in an environment like this."

Although the large banks turned in the best performance, small domestically chartered commercial banks also did extremely well, increasing deposits about $75 billion between Feb. 26 and March 18. In recent prior months, this same group would typically bring in about $25 billion to $35 billion in deposits per month.

While deposits are swelling, the 25 largest domestically chartered banks in the U.S. also increased borrowings, or debt, by more than $100 billion. That's after total debt had been consistently on the decline for each of the past seven months.

 

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wells Fargo & Company Stock Quote
Wells Fargo & Company
WFC
$40.03 (0.05%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.