Why Is It So Important to Hold On to Low-Cost Deposits

When everyone is competing for a scarce item, it becomes difficult unless you improve at it.

This is exactly what we need to do with low-cost deposits. Let’s face it, there is no end in sight to the competition for low-cost deposits. Even when your bank is flush with deposits, you should be actively increasing your non-interest-bearing deposits as a percentage of total deposits. It’s like Christmas every day—each month you wake up and know that each dollar used for loans is pure profit. This is good. Yet most banks lack a process and the skilled people to consistently bring in low-cost deposits. 

Instead, they put up billboards, run advertisements, open CD accounts, and offer ridiculous interest rates. They don’t understand that many customers aren’t that 
rate sensitive. What these customers want is someone who can make a meaningful difference in their lives and their businesses. This value far outweighs what they would gain from an interest-bearing account. But does your team have the skill set to deliver this? 

Does your team have confidence? One thing I know for sure, from decades of working with many Top Five Percenters™, is that those who achieve and maintain top 5% performance are masters at bringing in low- or no-cost deposits. It is a system and a skill set. It’s hard, but once people know how to do it, they can bring in one account after another. 

I recently called a bank CEO because I heard one of our recent graduates from the Accredited Banking Professional Program brought in a $14 million checking account from a local business. For a bank with less than $100 million in assets, this was significant. Not only did they bring in that account, but they also brought in the entire relationship, with 14 cross-sells. I called to congratulate the CEO, who said, “That’s nothing; my people bring in a $2-3 million checking account every week.” 

Don’t tell me it can’t be done because there are people doing it. They aren’t doing it by pushing brochures or using outdated sales tactics. Those methods won’t get you invited back to the table. To be a Top Five Percenter, your team must elevate their skill sets so that your bank can become a top 5% performer. Competing for deposits won’t get easier, but you can get a lot better quickly. You must act because your competitors are coming after your depositors swiftly.   

To your continued success, 

Roxanne Emmerich 

Please watch the video above and share it with your exec team and board.