Posted by MeridianLink | May 19, 2025

How To Increase Core Deposits in 2025

The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the core deposit growth content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc. 

Why Core Deposit Growth Is Especially Challenging Right Now (And What Your Financial Institution Can Do About It)

Wipfli’s 2024 State of the Banking Industry report saw core deposit growth emerge as one of financial institutions’ top barriers to achieving their annual goals. This came in just behind liquidity and net interest margin (NIM) compressions. In Wipfli’s 2025 report, core deposit growth remained within the top three challenges to overcome. 

But what’s truly interesting is that before 2024, core deposit growth didn’t even appear on the radar as an area for improvement. What’s going on, and what can be done about it? 

It’s no secret that inflation has been causing hardship for individuals across the nation. 2023-2024 saw some of the highest federal funds rates in over two decades, and while rates have since decreased, they’re still relatively high. 

A BAI survey found that 41% of Gen Xers, 36% of millennials, 31% of Baby Boomers, and 30% of Gen Zers faced lower deposits or negative cash flow. These respondents cited inflation as the number one cause of this issue. Followed by higher rent/housing costs and big-ticket purchases. After these increased costs, people simply didn’t have the leftover funds to deposit. 

Additionally, between June 30, 2023, and June 30, 2024, aggregate retail and small business deposits grew by just 0.4%, a sign of stabilizing deposits following significant growth from 2020 to 2023 and a decline from 2023 to 2024. While stabilization itself isn’t a bad thing, it’s compounded by sluggish deposit growth predictions and market uncertainty. 

What Current Challenges Are Making Deposit Growth Even Harder? 

This slow deposit growth is also complicated by, and causing complications within, additional issues: 

Liquidity Constraints 

According to the 2025 Wipfli report, tightening liquidity is still a problem for 89% of FIs in 2025. With liquidity challenges comes the need for carefully managed capital outflow. Translation: Limited lending capabilities due to less on-hand capital, hampering overall profitability. 

Net Interest Margin Compression 

Elevated rates have created a double-edged sword—the potential for more core deposits thanks to attractive returns and increased borrowing costs that squeeze revenue. 

Regulatory Pressures 

Maintaining compliance with key regulations can also impact deposit growth, making it imperative to stay ahead of evolving regulations so progress doesn’t get held up. In fact, just as many FIs (89%) cited the regulatory environment as a significant factor in achieving their goals as those who cited liquidity. 

How Can Your FI Tackle Slow Deposit Growth?

Staying competitive amidst lackluster core deposit growth is possible with a little strategizing. A few ways to ease the strain include: 

Improving Deposit Offerings 

Bundling deposit products can encourage revenue through greater cross-sell potential. Plus, offering consumers additional products relevant to their circumstances is a great way to deepen relationships and maintain long-term business. While it’s important to keep costs balanced, providing high-yield account products and limited-time incentives, like referral-based cash rewards, where possible can also boost deposits. 

Leveraging Data & Automation for Smarter Business 

Marketing automation and analytics tools—like MeridianLink® Engage and MeridianLink® Insight—help identify high-potential segments, driving smarter outreach and stronger conversions. But targeting the right audience is just the beginning. Pairing a refined strategy with automated digital account opening and onboarding creates a seamless experience from first click to funded account. By minimizing manual steps with intuitive workflows and autofill for existing accountholders, you can accelerate applications, reduce abandonment, and unlock greater growth potential.

Strengthening Accountholder Relationships 

Whether through relevant product offers, better experiences, or personalized outreach, consumer relationships is where your growth starts. Tailored incentives and services show accountholders you understand their needs, helping boost loyalty and retain core deposits. Put simply, showing up for consumers increases the odds of them showing up for you. 

More Strategies for Accelerating Deposit Acquisition  

In the past couple of years, deposit growth has evolved from a peripheral concern to a primary focus for FIs. Shrinking deposits are squeezing lending opportunities and profits, demanding a distinctive approach. 

The time to act is now. Get proven strategies to drive deposit growth and long-term profitability in our eBook Strategic Deposit Acquisition: A Blueprint for Banking Success in a High-Pressure, Competitive Market. 

Similar Posts