The market value of deposit insurance changes over time and across banks as the value of the underlying put option changes, but the premium banks pay for the insurance does not adjust to completely capture this variation. Consequently, their incentive to supply insured deposits changes with the change in subsidy they enjoy from deposit insurance. Factors that increase the subsidy, such as asset risk, move the supply curve outward. Consistent with this idea, we show that the supply of insured deposits increase when banks become riskier. Our findings uncover a novel channel of deposit supply, with implications for existing research on the monetary policy, deposits channel, and reaching-for-yield literature.