US Banks: How Willing Is Your Bank to Pay Up for Deposits? July 2026

Research evidence excerpt

M

Update

August 5, 2026 01:12 AM GMT

US Banks | North America

Morgan Stanley & Co. LLC

Manan Gosalia

Equity Analyst

How Willing Is Your Bank to Pay

Up for Deposits? July 2026

Jeffrey Adelson, CFA

Equity Analyst

Brian Wilczynski, CFA

Equity Analyst

Alexander L Ward

Research Associate

Average CD rates moved higher in July...

• The highest average CD rate increased 4 bps in July to 3.78%, with rates on

1–12 month CDs rising 4 bps to 3.75% and rates on 13–36 month CDs

increasing 4 bps to 2.90%

• Of the 35 banks we track, 14 changed their highest offered CD rate during

July, with 12 banks raising rates and only 2 lowering them. Cumulatively 22 of

the 35 banks have raised their CD rates since May.

...Driven by cyclical factors

Large Cap Banks

North America

Industry View

Consumer Finance

North America

Industry View

Midcap Banks

North America

Industry View

Attractive

In-Line

Attractive

Exhibit 1 :

8.0

• We were not surprised to see many banks increase their CD rates given the

° Accelerating Loan Growth: Industry loan growth is accelerating, with

median bank in our coverage delivering 12% y/y median C&I loan growth

Effective Fed Funds rate

4.0

3.0

2.0

1.0

° Less certainty around Fed policy: As the Fed provides less forward

guidance, we expect greater volatility in rate expectations, increasing the

value of retaining and attracting deposits.

Highest Rate CD

5.0

Jul-26

Jul-25

Jul-24

Jul-23

Jul-22

Jul-21

Jul-20

Jul-19

Jul-18

Jul-16

(0.1)

Jul-17

° Forward curve repricing: The forward curve is now pricing in a full rate

hike by 4Q26

13-36 month

6.0

Average CD Rates (%)

following cyclical trends:

1-12 month

7.0

Source: Company data, Federal Reserve, Morgan Stanley Research

Note: We use the CD rates offered in each bank's headquarters' region

Exhibit 2 :

in 2Q26.

1-12 month 13-36 month

Highest Rate

CD Rate

≤ 36 months

AXP

4.25

3.75

4.25

SYF

4.00

4.15

• Over the past several editions of this note, we have argued that CD rates

GS

4.10

3.80

4.10

would continue to move higher, supported by the cyclical factors outlined

OZK

4.10

4.00

4.10

CBSH

3.40

3.50

MBIN

3.50

2.70

3.50

TFC

3.25

2.50

3.25

USB

3.25

3.00

3.25

FITB

3.10

3.15

Bank

Highest Rates

…