A few years ago, a couple in Louisiana discovered a big surprise in their checking account: a deposit of $50B. The unexpected deposit was the result of a glitch that had impacted just a handful of customers. The couple didn’t spend even a dime of the sudden windfall. The bank had resolved the error the next day, but for a number of hours, the bank and the customer had realized a large — if artificial — surge in deposits. A one-off error is one way to swell deposits; building sustainable growth is much harder. The good news is that 2026 is shaping up as a year of genuine deposit-growth opportunity. According to a new survey by ProSight, 82% of banks expect to grow deposits next year, compared to 61% last year. ProSight estimates deposit growth for 2025 of 2%-2.5%, and if the Fed cuts rates again in 2026, deposit growth could rise to 3% in the first half and 3.5% in the second. In line with bankers’ expectations, consumers expect to increase deposits and savings in the first half, despite declining confidence in personal finances. While those results point to a better year for deposit growth, they don’t suggest all financial institutions will necessarily share equally in the upturn. The competition for deposits promises to be fierce, as financial institutions, both banks and non-banks, battle for market share at a time of myriad incentives and promotions. Deposit growth went through decades of consistent growth until reaching a peak in 2021. From there, they plummeted, and there has been a slow recovery since then. Yet, 2026 has the potential to be the year that total deposits eclipse the 2021 peak. A disproportionate share of that growth will depend on where younger generations invest and save their money.Why Gen Z and Millennials Matter Most for 2026 Deposit GrowthThe survey results point to one distinct pocket of opportunity: younger generations, who expressed the most confidence in their likelihood to increase deposits.Among those who said they expected to increase deposits, Gen Z topped the list at 55%, followed by Millennials with 38%. Gen X and Boomers were more sanguine, expecting little change in their deposits and savings.For community financial institutions (CFIs), that means most incremental deposit growth in 2026 is likely to come from younger households, not from traditional core depositors.What Young Depositors Look for in Financial InstitutionsYounger depositors represent the biggest growth opportunity for 2026, but they also bring higher churn risk and different expectations than legacy customers. Here are a few key strategies to help draw them to your CFI, based on what matters to them most in a banking relationship.
- High response to promotions, high risk of switching. Promotional money market accounts opened over the past six months tripled for Millennials and doubled for Gen X, showing that well-structured offers can attract younger balances. At the same time, 35% of Gen Z and 32% of Millennials say they are definitely or probably going to change banks within the next six months, so any promotion needs a built-in retention plan.
- Community banks are under-indexed with Gen Z. Big banks remain the preferred provider for younger generations, and community banks are losing ground. Only 9% of Gen Z named a community bank as their primary institution in 2025, down from 12% the prior year, suggesting that without a targeted strategy, CFIs risk becoming marginal players in the segments that will drive future deposit growth.
- They want compelling incentives and clear fee protections. One-third of Gen Z account openings in 2025 came with a cash incentive, double the rate of the previous year, and Millennials were not far behind. Gen Z and Gen X are also more likely to incur overdraft fees and credit card delinquencies, which means transparent pricing, overdraft protection options, and simple safeguards are especially important.
- They expect strong digital tools and guidance. Younger customers are keen on digital banking. They want robust online and mobile tools to open and track accounts, along with accessible, digital-first advice on saving and money management — delivered where they already manage their finances.
- Personalization is now a baseline expectation. Younger generations not only respond to personalization; they expect it. Nearly three-fourths of Gen Z and about half of Millennials say they expect banking that is tailored to them personally, from offers and messaging to the way advice and tools are presented.
CFIs that can craft banking experiences around what these generations want, and then use sophisticated tracking and behavioral analytics to monitor and respond to individual needs and wants, will be the ones that prevail in the deposit competition.Deposit growth is rising, and the potential for additional Fed rate cuts provides a window for even more. The youngest generations of depositors will be central players. CFIs that can respond to their needs with incentives and personalized, digitally robust solutions will be well-positioned to cash in.
