The Death Of Core Deposits. 60% of the deposits moved out of banks and credit unions between 2020 and 2025 – CornerStone report.

“The concept of core deposits no longer holds. There are no core deposits. They’re all movable.”

an article by Ron Shevlin, Chief Research at CornerStone Advisors

Bankers treat core deposits—checking accounts, savings accounts, money market accounts held by “real” customers—as the bedrock of funding stability. Low-cost, sticky, and loyal.

The assumption is simple: Get someone to open a checking account with you and you’ve locked in a funding source that will sit there quietly, earning you a fat net interest margin.

About 10 years ago, I started calling checking accounts “paycheck motels:” temporary places for people to park their money before it moved on the bigger and better places.

Bankers ignored this because they assumed that fintechs—the not-so-bigger places where people were moving their money—were attracting young consumers who didn’t have much in the way of deposits.

A 2025 Cornerstone report titled Stemming the Deposit Outflow: The $2 Trillion Investing Opportunity for Banks and Credit Unions dispelled that notion, finding that 60% of the deposits moved out of banks and credit unions between 2020 and 2025 came from Gen Xers and Baby Boomers.

During the 2022-2023 rate cycle, deposit outflows hit community banks and credit unions hard. Money market funds crossed $6 trillion. Fintechs offering 4-5% APY on savings accounts added millions of accounts in months. Apple Card’s savings account gathered nearly $1 billion in deposits in its first four days.

Core Deposits Are a Myth
The behavioral assumption underneath “core” was always more wish than fact. Three things converged to dispel the wishes:

Visibility. Consumers can now see exactly what they’re earning—and what they could be earning—in seconds. The information asymmetry that made deposit inertia possible is gone. Every fintech with a high-yield savings account is running ads against it.

Friction evaporated. Moving money used to take effort. ACH transfers took days. Zelle, instant payments, and same-day ACH mean a consumer can shift $50,000 between institutions in minutes. The switching cost that “stickiness” was built on is approaching zero.

Relationships fragmented. The average consumer now holds accounts at 2.5+ institutions. The “primary” relationship—where payroll lands, bills autopay, and the checking account lives—is increasingly decoupled from where savings and investments sit. Consumers learned to unbundle. Bankers are fighting it.

Regulations Haven’t Caught Up
Believe it or not, regulators move slower than bankers do. The behavioral shift in deposits is running up against how regulators classify, price, and manage deposit risk.

The entire US bank regulatory framework for liquidity was built on the same inertia assumption bankers made. Core deposits—operationally defined as non-maturity deposits from retail customers—are treated as stable funding. The premise: retail depositors don’t run. Institutional money runs, but retail money stays.

Silicon Valley Bank blew that premise out of the water in 48 hours.

What happened at SVB wasn’t just a concentrated depositor base problem. It was a demonstration that digital banking infrastructure, social media, and a highly networked depositor community can produce a bank run at a velocity the regulatory framework never imagined.

The FDIC, the Fed, and the OCC were all operating on assumptions baked into rules written before mobile banking existed at meaningful scale. SVB lost $40 billion in deposits in a single day. Traditional bank run models didn’t take that number into account.

The regulatory response since then has been revealing in what it shows about the gap.

The FDIC assumed that uninsured depositors were more sophisticated and more mobile. But the SVB postmortem also showed that even insured depositors behaved differently than the models predicted when panic set in.

Brokered deposit rules are another problem: The FDIC tried to modernize a framework that hadn’t been updated since the 1980s when “brokering” meant a clearly identifiable third party physically moving deposits between institutions.

Today, fintech deposit marketplace platforms like Raisin, StoneCastle, ModernFI, Ampersand, and IntraFi blur the intermediary question. When a consumer opens an account through a fintech app and their deposits are swept to a network of partner banks via a middleware layer, is that brokered?

The regulatory answer has been inconsistent, and the ambiguity creates risks for community institutions competing against deposit products that aren’t being assessed and regulated the same way theirs are.

And yet another contributor to the regulatory mess: The Fed suspended the six-withdrawal-per-month limit on savings accounts in April 2020—a rule that had been in place since 1933—and never reinstated it.

The rationale was pandemic convenience, but the practical effect was removing a regulatory friction that had reinforced deposit inertia for nearly a century. Savings accounts are now functionally equivalent to checking accounts in terms of access.

So much for the theory of “deposit stability.”

Follow the link for the article in full: The Death Of Core Deposits (And The CLARITY Act Compromise That Isn’t)