What are 'Core Deposits'

Core deposits are the deposits made in a bank's natural demographic market. Banks count on core deposits as a stable source of funds for their lending base. Core deposits offer many advantages to banks, such as predictable costs and a measurement of the degree of customer loyalty.

BREAKING DOWN 'Core Deposits'

In addition to the advantages mentioned above, core deposits are generally less vulnerable to changes in short-term interest rates than CDs or money market accounts. Core deposits also encompass small denomination time deposits, as well as checking accounts. Banks can increase their core deposits with local marketing and customer incentives.

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