NEW FED DATA: DIFFERENCES IN DEPOSITS AT LARGE VS SMALL US INSTITUTIONS

The following information was released by the Federal Reserve Bank of Atlanta:

A new data release from the Federal Reserve Payments Study (FRPS) puts payments activity in the context of the transaction deposit accounts that fund payments. The release reports differences between the largest depository institutions (Top 100 DIs) and all others. While the Top 100 comprise a small fraction (less than one percent) of the nearly 10,000 DIs in the United States as of 2021, they account for most of the transaction deposit account balances, 64 percent by number in 2021 and 68 percent by value.

Looking deeper into the account estimates, you can see that differences between the Top 100 and other institutions extend to customer mix and average balances. At Top 100 DIs in 2021, 11 percent of transaction accounts were business accounts, but these accounts represented 65 percent of the value of deposits at Top 100 DIs. Balances of business accounts at these largest institutions averaged $89,000.

Smaller institutions, in contrast, had a higher proportion of business accounts by number (13 percent) and a lower share by value (52 percent). The average business account balance at these institutions was $43,000 in 2021.

These differences imply that the largest institutions serve the largest businesses in the US, which is a factor in their large share of the payments market. The Top 100 accounted for at least two-thirds of volume for each payments type by number in 2021: 68 percent of checks and automated clearing house (ACH) debit transfers by number and more than 90 percent of ACH credit transfers and wires.

Although very large institutions are important, they do not tell the whole story of payments activity in the US. In my next post, I will detail how payments per account differ at large and small institutions. Meanwhile, you can see and download all the data yourself at Federal Reserve BoardFederal Reserve Payments Study.