Has your funding-cost rank moved since 2022?
Through the largest rate cycle in forty years, most banks and credit unions kept the same place against their peers. Half of the banks that paid the most for their money in early 2022 were still in the most expensive quarter in mid-2026. For credit unions it was nearly two in three. Chance alone would put it at one in four.
We read the quarterly filings every bank and credit union makes to its regulator: 2,727 banks from $300 million to $10 billion in assets, over 19 quarters from the end of 2021 to mid-2026, and 1,828 credit unions above $100 million. Bank figures are as of the second quarter of 2026; credit union figures as of the first. We will update them as new filings arrive.
Did anyone's position change?
Very little. Line institutions up by what they paid for their money in early 2022, then again in 2026, and the order barely moves. Over shorter windows it is close to frozen.
Half were still there. Of every 100 that paid the most in early 2022, this many still did four years later.
What this suggests. Most institutions appear to pick a spot relative to the market and hold it. Rates went from near zero to five and a half percent and back. The habit didn't move.
Is the gap to the institution down the road about geography?
No. Inside a single metro area, the 10% of banks that pay least for their money and the 10% that pay most sit about 1.4 percentage points apart. Across the whole country the gap is 1.45. Credit unions show the same within a state. Institutions competing for the same depositors, in the same city, pay more than a point apart for their money.
What this suggests. The gap to the institution down the road is mostly a pricing choice. You can make a different one.
Does size buy cheaper funding?
No. The smallest banks we read funded most cheaply, and the median bank at $2 billion to $5 billion paid about a quarter of a point more. Inside every size band, the 10% that pay least and the 10% that pay most sit about a point and a half apart. The difference between an institution and its own peers is about six times the difference between size bands.
Peers of the same size sit about six times further apart than size bands do.
What this suggests. Compare yourself with peers your size, in your market. There is room to price better at $500 million and at $5 billion alike.
Is it the deposits you have, or the rate you pay?
Mostly the rate. For banks paying more than their peers, about three quarters of the difference is the rate paid on interest-bearing money. About a quarter is the mix of deposits they hold. Mix changes slowly. The rate is a decision made every month.
Most of the difference is the rate, not the deposits.
What this suggests. Mix takes years to change. The rate takes one committee meeting. Most of the difference sits in the part you can change this month.
Does rate position move deposits at all?
Yes, modestly and consistently. Institutions that paid more than the median grew deposits faster over the following year, in every period we measured, and most when rates rose fastest. It explains a small share of growth; branches, relationships and service explain the rest. Credit unions gave the same answer as banks, from a different regulator's data.
What this suggests. Price is one lever among many, and not the biggest. It's the one you can pull this month and measure next quarter.
Why does this matter now?
The gap between the cheapest and dearest funders follows the rate cycle. When rates sat near zero, the whole industry was bunched together. As rates rose, the gap roughly quadrupled. Credit unions widened the same way. The Fed raised its target again in September 2026.
The gap grew as rates rose. Distance between the 10% that pay least for their money and the 10% that pay most, in percentage points.
See the numbers
| Quarter | Three-month Treasury | Banks | Credit unions |
|---|---|---|---|
| End of 2021 | 0.05% | 0.46 | 0.48 |
| End of 2022 | 4.19% | 0.61 | |
| Third quarter 2023 | 5.54% | 1.62 | 1.23 |
| Third quarter 2024 | 5.23% | 1.84 | 1.58 |
| First quarter 2026 | 3.69% | 1.39 | |
| Second quarter 2026 | 3.73% | 1.45 |
When rates move, the cost of a fixed habit grows.
What should your committee ask?
- Where did we rank against our peers in 2022, and where do we rank now?
- Is our gap to the institutions down the road a market condition, or a choice?
- How much of what we pay is the rate, and how much is the mix?
- When we last held our position, was that a decision?
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