Conference Agenda

This paper examines deposit stickiness using account-level data from over 10 million accounts across 152 U.S. credit unions. We find significant skewness in deposit distributions, with 10% of depositors controlling 70% of total deposits. Aggregate deposit stickiness is driven by high-balance depositors. Using unexpected changes in Fed Funds rates as exogenous variation in the opportunity cost of holding deposits, we show that low-balance depositors are sensitive to changes in interest rates, but high-balance depositors are not. High-balance depositors are also relatively insensitive to discontinuous interest rate jumps at specific balance thresholds and are more likely to experience periods of prolonged inactivity followed by large reductions in account balances. Our evidence suggests that deposit stickiness is driven by relatively few high-balance accounts that are used as liquidity pools rather than for long-term savings.