Deposit Costs Decline as Deposit Growth Accelerates, Credit Signals Mixed

Interest-bearing deposit costs fell 23 bps to 2.5% in the fourth quarter of 2025, and savings deposit costs fell 10 bps to 1.75%, contributing to a 13-basis-point decline in overall funding costs, S&P Global Market Intelligence reported. Meanwhile, deposit growth accelerated to 1.8% quarter over quarter.

Another S&P post discussed how banks’ net charge-off ratio declined year over year to 0.63%, though nonaccrual loans rose 5.3% and early-stage delinquencies increased 2.4%.