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Deposit Account Holders Netted 5.25 Times More Interest in 2023 Than in 2022


Written by Maggie Davis | Published on 4/1/2024

 

The past couple of years have been good to depositors, with interest rates rising and fees falling. And 2023, in particular, was good to bank account holders. In fact, those with deposit accounts netted 5.25 times more in interest than in 2022.

Here’s what else we found.

On this page
 

Key findings

  • Banks paid out $315.4 billion to domestic deposit accounts in 2023, according to our analysis of quarterly Federal Deposit Insurance Corp. (FDIC) filings. This contrasts sharply with the $78.7 billion paid out in 2022. That equates to a year-over-year increase of 301.0%.
  • Banks collected $30.3 billion in fees on these same accounts in 2023, down 8.5% from $33.1 billion in 2022. Combined, this represented a net gain of $285.1 billion for depositors in 2023, compared to $45.6 billion in 2022. That’s a 525.7% difference, or 5.25 times more.
  • Each deposit account earned an average of $440.54 in 2023, 384.2% more than an average of $90.99 in 2022. These deposit accounts include demand deposit accounts (such as checking accounts), savings deposit accounts, time deposits (such as certificates of deposit) and certain retirement savings accounts.
  • Meanwhile, the typical account was charged $42.39 in bank fees in 2023, up 7.7% from $39.35 in 2022. Overall, this left depositors with a surplus of $398.15, compared with a profit of $51.64 a year earlier — a dramatic increase of 671.0%.
  • By quarter in 2023, accounts went from earning an average of $84.02 in interest in the first quarter to $132.59 in the fourth quarter. While interest payments rose dramatically throughout 2023, average charges per account stayed in the $10 range each quarter.

Banks paid out 301.0% more in interest in 2023 than in 2022

There’s no denying bank depositors are seeing their savings grow faster. In 2023, banks paid out $315.4 billion to domestic deposit accounts — a massive 301.0% increase from the $78.7 billion paid out in 2022.

That increase is part of a larger trend: In last year’s deposit account interest study, we found that banks paid out 223.1% more in interest in 2022 than in 2021.

Total amount earned and spent on deposit accounts ($ billions)
Earnings/charges Total amount in 2022 Total amount in 2023 Difference ($) Difference (%)
Total interest paid to deposit accounts $78.7 $315.4 $236.8 301.0%
Total charges from deposit accounts $33.1 $30.3 -$2.8 -8.5%
Total income from deposit accounts $45.6 $285.1 $239.6 525.7%
Source: DepositAccounts analysis of quarterly bulk call report data from the Federal Deposit Insurance Corp. (FDIC). Note: Differences are displayed with one decimal point, though unrounded numbers were used for calculations.

According to DepositAccounts founder Ken Tumin, interest rates play the largest role.

“The Fed raised its benchmark interest rate in 2022 by 425 basis points, the largest annual increase since 1980,” he says. “Most of the increases came in the second half of 2022, and banks took some time before they increased deposit rates based on Fed rate increases. Thus, most of the impact of the Fed interest rate increases on deposit rates came in 2023.”

And, like last year, fees are falling. In 2023, banks collected $30.3 billion in fees, down 8.5% from $33.1 billion in 2022. That’s a dramatic difference from the 2.6% decrease in fees between 2021 and 2022. Tumin says this decrease is an attempt to attract and retain customers.

“Overdraft and nonsufficient fund (NSF) fees make up a large portion of fees that depositors pay,” he says. “Due to more consumer-friendly fee policies that many banks have enacted in the last few years, overall fee revenue has been trending down.”

What’s more: In January 2024, the Consumer Financial Protection Bureau (CFPB) proposed a new rule aimed at limiting excessive overdraft fees at banks and credit unions with more than $10 billion in assets — another potential win for depositors.

All in all, depositors walked away with a net gain of $285.1 billion in 2023. That compares to $45.6 billion in 2022 — a difference of 525.7%, or 5.25 times more.

Consumers earned 384.2% more per account in 2023

Breaking that down by deposit account, the average interest earnings per account were $440.54 in 2023. That’s 384.2% more than an average of $90.99 in 2022 and an even further jump from the 179.1% increase between 2021 and 2022.

While that’s good news, Tumin says deposit interest rates likely peaked in late 2023 and early 2024.

“Since December 2023, there have been signs that the Fed will cut its benchmark interest rate in 2024,” he says. “Banks responded to these signs in early 2024 with modest reductions to their deposit rates. That will likely continue until the Fed lowers its benchmark rate, and then more widespread deposit rate reductions should be expected.”

When it comes to bank fees, the average account was charged $42.39 in 2023. While that’s up 7.7% from $39.35 in 2022, that still left depositors with a surplus of $398.15. In comparison, depositors ended 2022 with a $51.64 profit — meaning the surplus increased by 671.0%. Notably, that surplus also increased 521.2% between 2021 and 2022.

Interest payments rose dramatically by quarter in 2023

By quarter, deposit accounts went from earning an average of $84.02 in the first quarter to $132.59 in the fourth quarter in interest — a dramatic rise.

The Fed steadily increased interest rates through the first half of 2023, with four 25-point increases from February to July. That means the federal funds rate went from a target of 4.25%-4.50% to 5.25%-5.50%. The Fed maintained that target through December.

Alongside these interest rate increases, the average charges per account stayed in the $10 range each quarter in 2023 — increasing profits per account. In the first quarter, the average account netted $73.46. That rose to $122.00 in the fourth quarter.

Capitalizing on current interest rates: Expert tips

While depositors are earning significantly more now via interest, Tumin believes those rates will fall soon, so he encourages consumers to take advantage of high rates and low fees now. He offers the following advice:

  • Open a high-yield savings account. “The easiest and quickest way to maximize interest on deposit accounts is to open a high-yield savings account,” he says. “In 2024, it’s easy to find online savings accounts that pay interest rates over 5.00%.”
  • When opening an online savings account, there’s no need to switch banks. “In most online savings account applications, an existing checking account can be used as the source of funding for the new online savings account,” he says. “Future deposits and withdrawals can be initiated from the online bank’s account platform that electronically transfers funds between the online savings account and checking account.”
  • Opening an online savings account may be worth the extra work. “Maintaining an extra bank account requires slightly more work, but that can mean more interest income than what could be earned with a brick-and-mortar savings account,” he says. “That’s especially the case in today’s high interest rate environment. With the average brick-and-mortar savings account paying only 0.52%, depositors may be able to earn 10 times more interest in an online savings account compared to an average savings account at a brick-and-mortar bank.”

Methodology

Researchers calculated the aggregate amount of interest paid by Federal Deposit Insurance Corp.-insured banks on domestic deposit accounts, fees charged to deposit accounts and the total number of deposit accounts using quarterly bulk call report data.

Annualized numbers represent the sum of interest and fees in each quarter.

Related Pages: banking tools and data
Previous Comments
RichReg
  |     |   Comment #1
"I'm RIIICH, BEEY-otch".
(honk-honk).

(Credit: The Dave Chappelle Show)
Ally6770
  |     |   Comment #2
Very interesting article. But I love numbers and statistics. I assume this article is just banks because finance writers do not include credit unions with the word banks in the article as many other people do. You also include FDIC and not NCUA.
When my husband was alive we were savers and chased rates and used
this site when we were able to get dial-up. Actually it was the first site I went to.
Even though all my money is in credit unions, I was able to get even more interest than I have received in the last few years. Again the last 4 years I have made more interest than my pensions, RMD and SS. In fact this past year and probably next year or two will not do a Roth conversions because of interest made and IRMAA. I am very fortunate that I am able to give the money outside my IRA's and interest away and leave interest to compound. We have to take advantage of what we are able by the sites we choose to read and use. This site will do it for us. The last 4 years have been very good!!!!! I did not get COVID, was able to stay healthy with vaccinations and take advantage of all the information on the medical sites to stay healthy and with this site for rates that Ken has provided us for so many years to make every penny we have make money for us. Love this article.
Because of this site I was able to get the information and many times in the past make 10 year CD's. Laddering LONG TERM CD's is what I have always done.
When we had the banking crisis I still for many of those years after I made as much interest as I did this last year because of the long term CD's. I hope this site always continues to educate all that want to be educated and be able to take advantage of the best rates no matter what they are. And yes even CD's can make you a multimillionaire and still give away a million in a life time and be able to sleep at night. Ken and this site has educated so many people that did not have an economics class in grade or high school or were taught from their parents or to manage money. My son years ago dated a MBA graduate from the best school in the nation who never balanced her check book and actually went bankrupt.
P_D
  |     |   Comment #3
"The past couple of years have been good to depositors, with interest rates rising and fees falling. And 2023, in particular, was good to bank account holders. In fact, those with deposit accounts netted over six times more in interest than in 2022."

Once you factor in inflation and taxes (inflation causes taxes paid to increase too), real interest rates on deposits over the last 3 years were negative, and in fact Americans went from having record savings to being in record debt. So I think this assessment is a bit one dimensional and selectively rosy.
goldismoney
  |     |   Comment #5
I'm done with putting savings in banks, it's clear that the Fed will always steal from savers to insure stock losses AND profits like they are doing now by cutting rates. It wouldn't be a surprise if deposits are written down during the next crisis.
milty
  |     |   Comment #4
"The past couple of years have been good to depositors . . . " Absolutely, regardless of the nattering nabobs of negativism constantly complaining about inflation, which was a problem for a short while but is much lower now AND besides it may not have affected the depositors as much, because most depositors are Savers (i.e., frugal) and know how to shop around to defeat inflation. Personally, my monthly interest income is up by 1000s whereas inflation has cost me only a few hundred. That's a fact, and complaining about taxes due to increased interest is like telling your boss you don't want a raise because you don't want to pay more taxes. You may need to learn about marginal versus effective tax rates.
goldismoney
  |     |   Comment #6
Sounds like it's mostly your real estate investment that has kept your expenses stable, but your savings buys a lot less real estate than it used to. The interest is more like a withdrawal
milty
  |     |   Comment #7
real estate is higher than it used to be, when I bought my house . . . but so are wages.
LovinSomeCDs
  |     |   Comment #8
This is great news! The last 3 years have been bliss! Thanks Covid! Thanks Biden!

We all know that inflation hits different for EVERY individual, so some of us have really cleaned up the last 3 years!  Others who couldnt hold off on inflated purchases (cars,houses, furniture), not so much!

Inflation high>>CD rates high>>inflation comes down>>CD rates Still high (locked for 5-7 years)

What a time to be alive!!  Having 1099 income to all of you!
bma737
  |     |   Comment #39
This is my point also. Don't complain about the rates, invest with the rates. I've been buy long term CDs since Jun 23.
Robb
  |     |   Comment #9
Nice bump up in mid and longer term rates to start the week. Looks like the 10 Year is starting to build a base the past few months. Interesting to see how this resolves.

https://www.cnbc.com/bonds/
thumbsup
  |     |   Comment #10
Uncle Sam wants his share of my 5.25 more times on April 15th lol. I'll share the wealth.
P_D
  |     |   Comment #12
Godfather Sam always gets his vig.

If you value your kneecaps make sure you pay up!
jamesstewart
  |     |   Comment #11
I am way better off than 4 years ago and wish to keep it that way.
LovinSomeCDs
  |     |   Comment #13
Me too!

Admittedly, the main reason for this is because I was able to flee a corrupt deep blue state for the bright red state!
milty
  |     |   Comment #14
I'm still in one of those blue states versus moving to one of those backward red states and am doing just fine.
111
  |     |   Comment #15
Ya'know milty, I read several years ago that if one took New York and separated NYC from the rest of the state, the NY minus NYC remainder would be the economically poorest "state" in the U.S.! Poorer than WV, than MS, etc. Congratulations!
milty
  |     |   Comment #19
Ya'know 111, although I haven't read that, I don't doubt that it is true, because you see upstate NY is pretty rural and red, and therefore of course not very prosperous. However, try as one might, you just can't educate these right wingers to understand just how important NYC really is for them.  You see for them facts just don't matter.
LovinSomeCDs
  |     |   Comment #16
I will actually agree with you there milty, but the fact is that hundreds of thousands of people have moved South since 2020 BECAUSE of the so called "backwards-ness". So, we actually like it that way.

But hey, thats why states should hold all the power, so they can run it how the people want it ran, blue or red. Everyone is different.
milty
  |     |   Comment #18
"... states should hold all the power, so they can run it how the people want it" I think that sort of changed in 1865. Have never been a real fan of the electoral college or states rights, since I prefer a united states.

“Can we forget for whom we are forming a Government? Is it for men, or for the imaginary beings called States?”
--James Wilson, Constitutional Convention, June 30, 1787

Anyway, I know folks have moved South for various reasons-- warmer weather, perhaps lower cost of living, etc, but hopefully not because of their desire to turn back the clock before 1865. I also know some of those folks are moving back.
111
  |     |   Comment #20
From Wikipedia, the free encyclopedia - 
Louis Brandeis praised federalism as allowing states to experiment and make the best laws.

Laboratories of democracy is a phrase popularized by U.S. Supreme Court Justice Louis Brandeis in New State Ice Co. v. Liebmann to describe how "a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."[1] Brandeis was an associate justice of the Supreme Court of the United States from 1916 to 1939.

One of milty's progressive Justices, if memory serves.
milty
  |     |   Comment #21
He also wrote,
“We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.” --Louis D. Brandeis

I would say his prediction appears to be coming true.
LovinSomeCDs
  |     |   Comment #22
"Anyway, I know folks have moved South for various reasons-- warmer weather, perhaps lower cost of living, etc, but hopefully not because of their desire to turn back the clock before 1865. I also know some of those folks are moving back."

Let be honest, it doesnt matter if you are "hopeful" about peoples reasons for moving. That is their business and their business only. A persons reason for moving can be taxes, weather, crime, or just plain old..."i dont to live next to democrats/republicans". This is the beauty of us living in the US, and not North Korea.
milty
  |     |   Comment #25
I never said people can't move for whatever reason, and hopefully they find their heart's desire wherever that may be. But I have the right to be hopeful regarding what those reasons are, since whether you're the new or old neighbor, we don't need more division. I want to be hopeful for the common good.

https://apnews.com/article/fbi-cross-burning-south-carolina-35c2f4acaf95b8d22aa7692ff04ecc4e
LovinSomeCDs
  |     |   Comment #26
Fastest growing states from 2020 - 2023
5. Montana
4. Texas
3. South Carolina
2. Florida
1. Idaho
Ally6770
  |     |   Comment #23
I sure hope it wasn't to the red states because they had the highest % of deaths from COVID vs population. In fact in FEB there were still 10,000 people hospitalized in the US with COVID and the top 4 states vs population were Alabama, Georgia, South Carolina and Florida.
LovinSomeCDs
  |     |   Comment #24
Not really sure Ally, I dont/never did follow those numbers. I was one of those "annoying" people who lived in a midwest blue state during Covid, and vacationed all over the South during the Summer of 2020, and through 2021 because the deals at these resorts were amazing! Me, my wife, and 2 kids were eating at restaurants, going to beaches, staying at resorts, roadtriping all over (gas was CHEAP). We had our masks handy if needed, but not many required it.

I had no problem with the people who stayed in the basement, no ill will towards them. Again, everyone thinks differently, and thats what makes us human. 2020-2021 were amazing travel years for our family...and we survived to tell about it! Win!
Ally6770
  |     |   Comment #43
I did not stay in the basement nor did I get COVID. Because of my age I do not have a lot of immunity left. Also once you hit 50 you start to lose immunity and your cataracts start to grow.
P_D
  |     |   Comment #27
The bad news for red staters is that the plan is to move all these foaming at the mouth Democrats to the red states and turn them blue.

They are like zombies... they have no idea that what ruined the states they came from was their own insistence on voting for the same far left city and state destroyers over and over and over again. What's that definition of insanity again?

As a matter of fact it is already happening in some places. They were solid red and are now not so solid anymore after being invaded by the out of state Democrat zombie apocalypse that is doing the exact same thing they did to the states they trashed. It metastasizes like a cancer.

I think the Democrat elite are intentionally making the blue cities and states uninhabitable to get the zombies to leave and take over the rest of the country. It's an expansion strategy. What else could possibly explain their hallucinogenic policies and behavior?
LovinSomeCDs
  |     |   Comment #28
Everything happens in cycles. Florida was once a solid purple state, and now its blood red! They say Texas will someday turn blue.

My wildcard prediction....California will someday turn red again. All it takes is enough people to move there and start voting accordingly, aling with enough people to move out because they simply cant afford it anymore.

Its all cycles. No biggie.
milty
  |     |   Comment #29
“Insanity is doing the same thing over and over and expecting different results.” A good example would be voting for Trump in 2024 and expecting a different result than in 2020.
LovinSomeCDs
  |     |   Comment #30
....and people are still going to gladly vote for him. The revenge tour begins in January. lol

Ive got my popcorn ready! This is going to get messy.
Bowman
  |     |   Comment #32
Here is ruby red OH, the red politicians tried to change our constitution to circumvent our election results. Even after certain laws were passed, those red politicians are trying to overturn the will of the people. It's pretty bad.
LovinSomeCDs
  |     |   Comment #33
Ohio (and maybe Indiana) is the last hold out in the midwest from turning blue and experiencing the MASS exodus that Michigan, Illinois, and Pennslyvania is experiencing. So be thankful! lol

I know Cleveland is no Disney land, but its a mecca compared to the bombed out ****hole cities of Chicago, Detroit, Gary, and Philadelphia.
Ally6770
  |     |   Comment #42
Doesn't seem that any of you check the taxes in the southern states and also the lower wages with most companies not having a company pension. Even though many do not have some taxes the taxes they do collect are higher in the end. There was a big report comparing all 50 states that came out in FEB.
Ally6770
  |     |   Comment #44
Southern states have very few companies that have pensions, offering only 401K's. If you ready the report of the sales, property and income taxes that was published in FEB it is the southern states that take the larger portion of income for taxes. They also have lower wages and few companies have great pensions. Even without the income tax they pay more the southern states in most cases take a bigger share of income for taxes. The latest report was published in Feb. My pension and my husband pension that he left to me is more than our wages when we retired.
Ally6770
  |     |   Comment #45
With lower wages, and higher taxes (according to the latest report out in Feb 2024). and not a lot of people have good pensions I would not live in the south. Here we have pensions and at 65 if the company goes bankrupt the pension at age 65 depending on your years and wages our pensions are guaranteed at age 65 up to $1,024,251. How many people have that much in a 401K. Up north, we have pensions, 401k's and IRA's.
Robb
  |     |   Comment #17
Fed’s Bostic caving some on the rate cut narrative. Seeing inflation pickup on a number of fronts of late:

https://www.cnbc.com/2024/04/03/atlanta-fed-president-bostic-sees-only-one-rate-cut-this-year-occurring-in-the-fourth-quarter.html
Carpline
  |     |   Comment #31
“The easiest and quickest way to maximize interest on deposit accounts is to open a high-yield savings account,” Gee, why didn't I think of that?
Ally6770
  |     |   Comment #41
I still like the longest term and highest rate for CD's. I understand that most CD's you can get to the interest if you need it but I never have. Let it compound and get the most for your money. Compounding makes you an even a higher return. Make every penny work for you. Saving account % of interest can change at any time. Having been doing this from the late 70's with my first CD at Industrial State Bank which is now Comerica. 5 yr CD at 8%. Eventually the Cd's went to 10 and 15 years in the 80's that everyone could purchase at least the 10 years ones we could.
enduser
  |     |   Comment #37
My interest earnings in 2023 doubled as compared to 2022. Lets see what 2024 looks like at the end of the year, but so far it is tracking 2023.
bma737
  |     |   Comment #40
When do you Jerome will cut rates? My first thought was June, but that idea started to changed in January. Now I'm thinking summer employment, extra cash for travel, then back to school shopping, summer jobs layoff and Oct 2024 a 25 basis point cut.
spentcattle
  |     |   Comment #46
Can you someone explain to me why I can’t get updated cd rates from credit unions or banks everything says mid march

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